80.2K

Verified Solution

Link Copied!

D Question 1 1 pts The corporate form of business has major advantages for shareholders. Among these is/are the following: O A corporate form of business affords a shareholder the right to limit his/her liability to creditors of the corporation. Acorporate form of business affords a shareholder the right of double taxation on dividends paid to him/her Both A and B are major advantages of the corp form of business. O Neither A nor B are major advantages of the corporate form of business 1 pts Question 2 When ABC Corporation is formed, 100,000 shares of common stock and 10,000 shares of preferred stock are sold to various shareholders. Par value of the common shares is $5, and the total paid for these 100,000 shares is $3,000,000. Paar value of the preferred shares is $100, and the total paid for these 10,000 shares is $1,000,000. ABC should make the following journal entry to reflect these sales: Debit retained earnings $4,000.000, credit common stock $3,000.,000, credit preferred stock $1000.000 MacBook Air $ % & 5 6 7 R T Y tA4 C Both A and B are major advantages of the corporate form of business Neither A nor B are major advantages of the corporate form of business. D Question 2 1 pts When ABC Corporation is formed, 100,000 shares of common stock and 10,000 shares of preferred stock are sold to various shareholders. Par value of the common shares is $5, and the total paid for these 100,000 shares is $3,000,000. Paar value of the preferred shares is $100, and the total paid for these 10,000 shares is $1,000,000. ABC should make the following journal entry to reflect these sales: Debit retained earnings $4,000,000, credit common stock $3,000,000, credit preferred stock $1,000,000 Debit retained earnings $4,000,000, credit common stock $500,000, credit paid-in capital common stock $2.500,000, credit preferred stock $1,000,000 O Debit cash $4,000,000, credit common stock$3,000,000, credit preferred stock $1.000,000 O Debit cash $4,000,000, credit common stock $500,000, credit paid-in capital-common stock $2,500,000, credit preferred stock $1,000,000 1 pts Question 3 MacBook Air Fa $ % & 3 6 8 R T U Y 5 Debit cash $4,000,000, credit common stock $500,000, credit paid-in capital-common stock $2,500,000, credit preferred stock $1,000,000 1 pts Question 3 The term, "cumulative," as that terminology is applied to shares of stock sold to investors by a corporation, means Oany "dividends in arrears" from the corporation on the preferred shares must be paid to the preferred shareholders in fll, including the current year's dividend, before any dividends are available to common shareholders in the current year. any "dividends in arrears" from the corporation on the common shares must be paid to the common shareholders in full, including the current year's dividend, before any dividends are available to the preferred shareholders in the current year. all purchases of preferred stock miust be paid for in full before the corporation is allowed to pay any dividends to preferred shareholders. all purchases of preferred stock must be paid for in full before the corporation is allowed to pay any dividends to the common shareholders. Question 4 1 pts MacBook Air FA FS F6

Answer & Explanation Solved by verified expert

See Answer