What is the number of shares outstanding

Question

Question 1.  Characteristics of a corporation include

• Shareholders who are mutual agents
• Direct management by the shareholders (owners)
• Its inability to own property
• Shareholders who have limited liability

Question 2.  Under the corporate form of business organization

• Ownership rights are easily transferred.
• A stockholder is personally liable for the debts of the corporation.
• Stockholders' acts can bind the corporation even though the stockholders have not 
• been appointed as agents of the corporation.
• Stockholders wishing to sell their corporation shares must get the approval of 
• other stockholders.

Question 3.  The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

• Treasury stock
• Issued stock
• Outstanding stock
• Authorized stock

Question 4. The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

• 5,000
• 45,000
• 40,000
• 50,000

Question 5.  A corporation issues 1,500 shares of common stock for $ 32,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

• $15,000
• $32,000
• $17,000
• $2,000

Question 6.  If Everly Company issues 1,000 shares of $5 par value common stock for $75,000, the account

• Common Stock will be credited for $75,000.
• Paid-in Capital in excess of Par Value will be credited for $5,000.
• Paid-in Capital in excess of Par Value will be credited for $70,000.
• Cash will be debited for $70,000.

Question 7. The journal entry to issue 1,000,000 shares of $6 par common stock for $8.00 per share on January 2nd would be: 

a. Jan 2 Cash                               8,000,000
      Common stock                                6,000,000
      pai-In Capital in Excess of Par-C/S
b. Jan 2 Cash                               6,000,000
      Common stock                                6,000,000
c. jan 2 Cash                               6,000,000
      pai-In Capital in Excess of Par-C/S         2,000,000
      Common stock                                8,000,000
d. Jan 2 Cash                               1,000,000
      Common Stock                                1,000,000
     
Question 8. When Bayou Corporation was formed on January 1, 20xx, the corporate charter provided for 100,000 share of $10 par value common stock. The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 9,000 shares of stock at a price of $23.00 per share.

The entry to record the above transaction would include a:

• Debit to Cash for $90,000
• Credit to Common Stock for $207,000
• Credit to Paid in Capital in Excess of Par- for $117,000
• Debit to Common Stock for $90,000

Question 9.  On January 1, 20xx, Swenson Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Swenson purchased 3,000 shares of treasury stock for $21 per share and later sold the treasury shares for $24 per share on March 1, 20xx.

The journal entry to record the purchase of the treasury shares on February 1, 20xx, would include a

• Credit to Treasury Stock for $63,000.
• Debit to Treasury Stock for $63,000.
• Debit to a loss account for $9,000
• Credit to a gain account for $9,000.

Question 10.  The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 60,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $1 per share dividend is declared?

• $60,000
• $5,000
• $100,000
• $55,000

Question 11.  The date on which a cash dividend becomes a binding legal obligation is on the

• Declaration date.
• Date of record.
• Payment date.
• Last day of the fiscal year end.

Question 12. What is the total stockholders' equity based on the following account balances? 

Common Stock                            $450,000
Paid-In Capital in Excess of Par         90,000
Retained Earnings                           190,000
Treasury Stock                                10,000

• $740,000
• $730,000
• $720,000
• $640,000

Question 13. A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

• Increase, $100,000
• Increase, $350,000
• Decrease, $100,000
• Decrease, $350,000

Question 14. Which of the following is not classified as paid-in capital on the balance sheet?

• Common stock
• Common stock distributable
• Donated capital
• Treasury stock

Question 15.  Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

• The number of shares of common stock outstanding
• The number of shares of common stock issued
• The number of shares of common stock authorized
• All of the above

Question 16. A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be

120,000 shares
40,000 shares
80,000 shares
13,333 shares


Question 17: Based on the following data, what is the acid-test ratio, rounded to one decimal point? (Data attached in the attached file now):

Accounts payable           $30,000
Accounts receivable         60,000
Accured liabilities              5,000
Cash                              30,000
Intangible assets             50,000
inventory                        69,000
Long term investments     80,000
Long term liabilities        100,000
Marketable securities       30,000
Fixed assets                  670,000
Prepaid expenses              1,000

• 3.4
• 3.0
• 2.2
• 1.8