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Exam 11: Proprietorships,partnerships,and Corporations

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Question 21

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The most commonly reported measure of a company's value is earnings per share.

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Question 22

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A separate capital account is maintained for each partner in a partnership.

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Question 23

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Blair Scott started a sole proprietorship by depositing $75,000 cash in a business checking account.During the accounting period,the business borrowed $30,000 from a bank,earned $18,000 of net income,and Scott withdrew $12,000 cash from the business.Based on this information,what is the balance in Scott's capital account at the end of the accounting period?

Which of the following entities would report income tax expense on its income statement?

A purchase of treasury stock is an asset use transaction.

Which of the following is not considered an advantage of the corporate form of business organization?

The earnings of sole proprietorships are taxable to the owners rather than the company itself.

Which of the following terms designates the maximum number of shares of stock that a corporation may issue?

The stock market crash in 1929 led to the beginning of the extensive regulation of trading stock on stock exchanges.

The class or type of stock that every corporation must have is preferred stock.

Voiles Company reissued 200 shares of its treasury stock.The treasury stock originally cost $25 per share and was reissued for $35 per share.Select the answer that accurately reflects how the reissue of the treasury stock would affect the elements of Voiles' financial statements.

In a closely held corporation,exchanges of stock are limited to transactions between individuals.

Which of the following statements about par value is true?

At the end of the accounting period,Houston Company had $12,000 of common stock,paid-in capital in excess of par value-common of $11,000,retained earnings of $12,000,and $4,000 of treasury stock.What is the total amount of stockholders' equity?

Which of the following statements about types of business entities is true?

What is the expected impact of a 2-for-1 stock split?

At the time that Kirby Company issued a 2-for-1 stock split,the company had 5,000 shares of $6 par value common stock outstanding.Stockholders' equity also included $15,000 of paid in capital in excess of par value-common and $22,000 of retained earnings.Which of the following statements regarding the impact of the stock split is true?

Chadwick Associates retained $850,000 of net income in the business in Year 1.If $75,000 was appropriated to satisfy the restrictive covenant of a loan agreement,what are the effects of the appropriation on the elements of the financial statements?

Flagler Corporation shows a total of $660,000 in its Common Stock account and $1,600,000 in its Paid-in Capital Excess account.The par value of Flagler's common stock is $8.How many shares of Flagler stock have been issued?

On February 2,Year 1,Farmer Corporation issued 9,000 shares of no-par stock for $17 per share.Within two hours of the issue,the stock's price jumped on the New York Stock Exchange to $21 per share.Which of the following answers describes the effect of the February 2 transaction on the elements of the financial statements?