Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
6th Edition
ISBN: 9780134486840
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Question
Chapter 13, Problem 13.19E
To determine
Corporation
A corporation is a form of business entity that is incorporated through the state charter and having a legal identity separate from its owners or the shareholders. Corporation forms of business entities dominate the business activities of Country U. The big businesses in the country are carried through corporations including the multinational business.
There are various advantages and disadvantages of corporation form of business as compared to other form of business.
a, b, c, d, e, f, and g.
To Identify: The advantages and disadvantages of corporate form of business from the given statements.
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Identifying advantages and disadvantages of a corporation
Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage.
a. Ownership and management are separated.
b. Entity has continuous life.
c. Transfer of ownership is easy.
d. Stockholders’ liability is limited.
e. Exposure to double taxation is evident.
f. Entity can raise more money than a partnership or sole proprietorship.
g. Government regulation is expensive.
Identifying advantages and disadvantages of a corporation
Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage.
Ownership and management are separated.
The entity has a continuous life.
Transfer of ownership is easy.
Stockholders’ liability is limited.
Exposure to double taxation is evident.
The entity can raise more money than a partnership or sole proprietorship.
Government regulation is expensive.
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Chapter 13 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Ch. 13 - Prob. 1QCCh. 13 - Prob. 2QCCh. 13 - Suppose Value Home and Garden Imports issued...Ch. 13 - Prob. 4QCCh. 13 - Prob. 5QCCh. 13 - Assume that a company paid 6 per share to purchase...Ch. 13 - Prob. 7QCCh. 13 - A small stock dividend a. decreases common stock....Ch. 13 - Prob. 9QCCh. 13 - Jackson Health Foods has 8,000 shares of 2 par...
Ch. 13 - Prob. 11QCCh. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - How does authorized stock differ from outstanding...Ch. 13 - What are the four basic rights of stockholders?Ch. 13 - How does preferred stock differ from common stock?Ch. 13 - Prob. 6RQCh. 13 - What are the two basic sources of stockholders'...Ch. 13 - Prob. 8RQCh. 13 - If stock is issued for assets other than cash,...Ch. 13 - Prob. 10RQCh. 13 - Where and how is treasury stock reported on the...Ch. 13 - What is the effect on the accounting equation when...Ch. 13 - What are the three relevant dates involving cash...Ch. 13 - How does cumulative preferred stock differ from...Ch. 13 - What is a stock dividend?Ch. 13 - Prob. 16RQCh. 13 - What are some reasons corporations issue stock...Ch. 13 - Prob. 18RQCh. 13 - Prob. 19RQCh. 13 - What does the statement of retained earnings...Ch. 13 - What is a prior-period adjustment?Ch. 13 - Prob. 22RQCh. 13 - What does earnings per share report, and how is it...Ch. 13 - What is the price/earnings ratio, and how is it...Ch. 13 - What does the rate of return on common stock show,...Ch. 13 - Prob. 13.1SECh. 13 - Prob. 13.2SECh. 13 - Prob. 13.3SECh. 13 - Prob. 13.4SECh. 13 - Prob. 13.5SECh. 13 - Prob. 13.6SECh. 13 - Prob. 13.7SECh. 13 - S13-8 Dividing cash dividends between preferred...Ch. 13 - Prob. 13.9SECh. 13 - Prob. 13.10SECh. 13 - Prob. 13.11SECh. 13 - Prob. 13.12SECh. 13 - Prob. 13.13SECh. 13 - Prob. 13.14SECh. 13 - Prob. 13.15SECh. 13 - Prob. 13.16SECh. 13 - Prob. 13.17SECh. 13 - Prob. 13.18SECh. 13 - Prob. 13.19ECh. 13 - Prob. 13.20ECh. 13 - Prob. 13.21ECh. 13 - Prob. 13.22ECh. 13 - Prob. 13.23ECh. 13 - Prob. 13.24ECh. 13 - Prob. 13.25ECh. 13 - Prob. 13.26ECh. 13 - Prob. 13.27ECh. 13 - Prob. 13.28ECh. 13 - Prob. 13.29ECh. 13 - Prob. 13.30ECh. 13 - Prob. 13.31ECh. 13 - Determining the effects of cash dividends, stock...Ch. 13 - Prob. 13.33ECh. 13 - Prob. 13.34ECh. 13 - Prob. 13.35ECh. 13 - Prob. 13.36ECh. 13 - Prob. 13.37ECh. 13 - Prob. 13.38ECh. 13 - P13-39A Organizing a corporation and issuing...Ch. 13 - Prob. 13.40APCh. 13 - Prob. 13.41APCh. 13 - Prob. 13.42APCh. 13 - P13-43A Preparing an income statement
The...Ch. 13 - Prob. 13.44APCh. 13 - Prob. 13.45APCh. 13 - Prob. 13.46BPCh. 13 - Prob. 13.47BPCh. 13 - Prob. 13.48BPCh. 13 - Prob. 13.49BPCh. 13 - Prob. 13.50BPCh. 13 - Prob. 13.51BPCh. 13 - Prob. 13.52BPCh. 13 - Prob. 54CPCh. 13 - Prob. 13.1COPCh. 13 - Prob. 13.1TICh. 13 - Prob. 13.1FSCCh. 13 - Prob. 13.1CA
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- Decide which of the following statements are true. I. In most circumstances, the owners of corporations enjoy reduced liability, increased liquidity and greater growth potential than owners of other forms of business. II. The term "LLC" or "Limited Liability Company", is a corporation that elects to limit liability for its shareholders through the use of off-shore and special purpose entities. II. The corporate form of business can help shield its owners from the liabilities of the corporation. Select one: O a. One is true. O b. Two are true. O C. All are true. O d. All are false.arrow_forwardIdentify each of the following characteristics as being an advantage, a disadvantage, or not applicable to the corporate form of business organization. 1. Separate legal entity 2. Taxable entity resulting in additional taxes 3. Continuous life 4. Unlimited liability of owners 5. Government regulation 6. Separation of ownership and management 7. Ability to acquire capital 8. Ease of transfer of ownershiparrow_forwardThe disadvantages are: (Select all the choices that apply.) A. Income to a corporation is subject to double taxation, once at the corporate level and again when received by the owners in the form of a dividend. B. The life of the business usually ends with the death of any of the owners. C. The corporation is more complicated and more expensive to set up than other business entities. D. Corporate liabilities can be passed on to the shareholders, thus making stock ownership primarily the realm of wealthy investors.arrow_forward
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- Andrea has prepared the following list of statements about corporations.Identify each statement as true or false. 1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership. TrueFalse 2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation. TrueFalse 3. When a corporation is formed, organization costs are recorded as an asset. TrueFalse 4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation. TrueFalse 5. The number of issued shares is always greater than or equal to the number of authorized shares. TrueFalse 6. A journal entry is required for the authorization of capital stock. TrueFalse 7.…arrow_forwardWhich of the following characteristics distinguish a corporation from other forms of businesses? I. Centralization of management II. Continuity of life III. Free transferability of ownership interests IV. Limited liability V. Profit motive Oa. Statements I, II, IV, and V are correct. Ob. Statements IV and V are correct. Oc. Statements I, II, III, and IV are correct., Od. All are distinguishing characteristics. Oe. Only statement III is correct.arrow_forwardWhat are some reasons why the value of a business other than a small one is generallymaximized when it is organized as a corporation?arrow_forward
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