I. True or False. 1. The fixed assets are recorded in the corporation books at their gross book values. 2. 3. 4. 5. 6. 7. 8. 9. 10. - - The accounts receivable is recorded at net amount together with the allowance for doubtful accounts. The amount per share which a corporation agrees to pay, if it elects to redeem the stock, is called redemption price. If a corporation issues only one class of stock, this is the Preferred Stock. A corporation issuing preferred stock may at times reserve the right to redeem it later under specified conditions. Such stock is known as callable or redeemable preferred stock. There is always the possibility that a subscriber will pay part of the subscription price, and fails to pay the balance on the call date specified. In this case, the stockholder is considered to have defaulted, and the unpaid amount is called delinquent subscription. A subscriber is considered a stockholder and he possess all the rights of a stockholder. A corporation may reacquire some of its own outstanding stock by purchase or by donation from its stockholders, or by accepting its own stock in payment of a debt owned by a stockholder. A business enterprise originally set up and operated as a sole proprietorship or a partnership may incorporate, for reasons such as: (a) to raise additional capital; (b) to take advantage of the limited liability of corporate stockholders; (c) to acquire better management expertise; and others. As the donated shares are sold, the proceeds are credited to a paid-in capital account, donated capital, which is shown in the income statement. A Corporation may also reacquire some of its own outstanding stock by way of donation from the stockholders. The shares of stock received are called donated treasury stocks.
I. True or False. 1. The fixed assets are recorded in the corporation books at their gross book values. 2. 3. 4. 5. 6. 7. 8. 9. 10. - - The accounts receivable is recorded at net amount together with the allowance for doubtful accounts. The amount per share which a corporation agrees to pay, if it elects to redeem the stock, is called redemption price. If a corporation issues only one class of stock, this is the Preferred Stock. A corporation issuing preferred stock may at times reserve the right to redeem it later under specified conditions. Such stock is known as callable or redeemable preferred stock. There is always the possibility that a subscriber will pay part of the subscription price, and fails to pay the balance on the call date specified. In this case, the stockholder is considered to have defaulted, and the unpaid amount is called delinquent subscription. A subscriber is considered a stockholder and he possess all the rights of a stockholder. A corporation may reacquire some of its own outstanding stock by purchase or by donation from its stockholders, or by accepting its own stock in payment of a debt owned by a stockholder. A business enterprise originally set up and operated as a sole proprietorship or a partnership may incorporate, for reasons such as: (a) to raise additional capital; (b) to take advantage of the limited liability of corporate stockholders; (c) to acquire better management expertise; and others. As the donated shares are sold, the proceeds are credited to a paid-in capital account, donated capital, which is shown in the income statement. A Corporation may also reacquire some of its own outstanding stock by way of donation from the stockholders. The shares of stock received are called donated treasury stocks.
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 8MC: The total amount of cash and other assets received by a corporation from the stockholders in...
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Transcribed Image Text:True or False.
1.
The fixed assets are recorded in the corporation books at their gross book
values.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The accounts receivable is recorded at net amount together with the
allowance for doubtful accounts.
The amount per share which a corporation agrees to pay, if it elects to
redeem the stock, is called redemption price.
If a corporation issues only one class of stock, this is the Preferred Stock.
A corporation issuing preferred stock may at times reserve the right to
redeem it later under specified conditions. Such stock is known as callable
or redeemable preferred stock.
There is always the possibility that a subscriber will pay part of the
subscription price, and fails to pay the balance on the call date specified.
In this case, the stockholder is considered to have defaulted, and the
unpaid amount is called delinquent subscription.
A subscriber is considered a stockholder and he possess all the rights of a
stockholder.
A corporation may reacquire some of its own outstanding stock by
purchase or by donation from its stockholders, or by accepting its own
stock in payment of a debt owned by a stockholder.
A business enterprise originally set up and operated as a sole
proprietorship or a partnership may incorporate, for reasons such as: (a)
to raise additional capital; (b) to take advantage of the limited liability of
corporate stockholders; (c) to acquire better management expertise; and
others.
As the donated shares are sold, the proceeds are credited to a paid-in
capital account, donated capital, which is shown in the income statement.
A Corporation may also reacquire some of its own outstanding stock by
way of donation from the stockholders. The shares of stock received are
called donated treasury stocks.
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