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Exam 11: Proprietorships,partnerships,and Corporations

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Question 81

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The term "double taxation" refers to which of the following?

A) Corporations must pay income taxes on their net income,and their stockholders must pay income taxes on their dividends.
B) In a partnership,both partners are required to claim their share of net income on their tax returns.
C) A sole proprietorship must pay income taxes on its net income and the owner is also required to pay income taxes on withdrawals.
D) A sole proprietorship must pay income taxes to both the state government and the federal government.

E) All of the above
F) B) and D)

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Question 82

Multiple Choice

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

A) Number of shares issued
B) Number of shares authorized
C) Par value
D) Number of shares outstanding

E) A) and D)
F) A) and C)

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Question 83

Multiple Choice

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On June 10,2016,Burton Builders,Inc. ,a publicly traded company,announced that it had been awarded a contract to build a football stadium at a contract price of $500 million.This contract would increase its projected revenues by 20% over the next three years.Which of the following statements is correct with regard to this announcement?

In accordance with restrictive debt covenants,Maynard Company appropriated $20,000 of retained earnings.Which of the following entries would be required to recognize this appropriation? No entry would be required.

Green Corporation has the following stock outstanding: In 2016,Green paid $100,000 in dividends.No dividends were paid in 2014 or 2015. Required: a)Compute the total amount of dividends that was paid to each class of stock in 2016. b)Compute the amount of dividends per share for each class of stock

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

A reason often given for a corporate stock split is:

Kellogg,Inc.purchased 200 shares of its own $20 par value stock for $30 cash per share.Which of the following answers reflects how this purchase of treasury stock would affect Kellogg's financial statements?

Ogilvie Corp.issued 12,000 shares of no-par stock for $40 per share.Ogilvie was authorized to issue 35,000 shares.What effect will this event have on the company's financial statements?

Helena Corporation declared a 2-for-1 stock split on 8,000 shares of $6 par value common stock.If the market price of the stock had been $25 a share before the split,the par value,number of shares,and approximate market value after the split would be:

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.Use only one letter for each element.You do not need to enter amounts. -Cooper Co.purchased 500 shares of its own stock as treasury stock for $35 per share.The no-par stock had originally been issued at $26 per share.Show the effects of the purchase.

Van Buren Corporation issued 5,000 shares of $6 par common stock for $24 per share.For this transaction,Common Stock should be credited (increased)for $120,000.

Which of the following would not be a reason for the market price of Carlyle Corporation to increase?

The Bristol-Fuller partnership was formed on January 1,2016,when Bristol and Fuller invested $40,000 and $30,000 cash in the partnership,respectively.During 2016,the partnership earned $75,000 in cash revenues and paid $52,000 in cash expenses.Bristol withdrew $5,000 cash from the business during the year,and Fuller withdrew $4,000.The partnership agreement specified that net income should be allocated equally to the partners' capital accounts. Required: Indicate how each of the transactions and events for the Bristol partnership affects the financial statements model,below.Indicate dollar amounts of increases and decreases.For cash flows,indicate whether each is an operating activity (OA),investing activity (IA),or financing activity (FA).Indicate NA if an element is not affected by a transaction.