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Louisiana State University, Shreveport ACCT 701 Assessment 6 1)Which of the following is not an advantage of the corporate form of organization? a

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Louisiana State University, Shreveport

ACCT 701

Assessment 6

1)Which of the following is not an advantage of the corporate form of organization?

a.            Continuous existence of the entity b.     Double taxation

c.             Easy transfer of ownership

d.            Limited liability of stockholders

2.            An arbitrary amount assigned by the board of directors to each share of a given class of non-par stock is… a.                Stated value

b.            Quasi par value

c.             Redemption value

d.            Liquidation value

3.            Preferred stock that has dividends in arrears is?

a.            Noncumulative and callable preferred stock

b.            Noncumulative and convertible preferred stock c.           Cumulative preferred stock

d.            Noncumulative preferred stock

4.            Quinn corporation issued 10,000 shares of $20 par value common stock at $50 per share. How much would be considered to be paid in capital in excess of par value from common stock?

a.            $300,000 b.         $700,000

c.             $500,000

d.            None of these

e.            $200,000

5.            You are given the following information:

Common Stock $80,000 ($80 par)

Paid in Capital in Excess of Par Value-Common Stock       $200,000 Retained Earnings         $400,000

Assuming that the company only has ONE class of stock, what is the book value per share?

 

a.            $80 b.    $680

c.             None of the above

d.            $400

e.            $280

6.            The advantages of incorporation include: (mark all that apply) a.               Continuous existence of the entity

b.            Double taxation

c.             Minimal accounting requirements

d.            Very few government regulations to follow e.   Easy transfer of ownership

f.             Limited liability

g.            Separation of owners and entity

 

7.            Bevins Company issued 10,000 shares of $20 par value common stock at $24 per share. Two years later, the company had $35,000 in Retained Earnings. At the time the company reacquired 1,000 shares of its own stock at a cost of $30 per share. What is the balance in Total Stockholders Equity?

a.            $275,000

b.            $210,000

c.             $240,000 d.         $245,000

 

8.            On January 1, a shareholder purchased 20 shares of stock in ABC Company for $14 per share. On June 30, the company paid $1.50 dividend per share. On December 31, the shareholder sold all of the shares for

$16 per share. What is the overall Economic Rate of Return for this investment? a.           10.71%

b.            25%

c.             21.87%

d.            17.85%

9.            ABC issued 12,000 shares and subsequently reacquired 2,000 shares as treasury stock. The following year, ABC corp. declared a regular dividend of $2 per share. What would be the total amount of the dividend expense?

a.            $24,000

 

b. $28,000 c. $20,000 d. $4,000