Identify the two conditions that must be met for a stock dividend to be nontaxable. OA) O B) C) The corporation must issue the stock dividend to holders of all classes of stock. The corporation must issue the stock dividend to only holders of common stock. The corporation must issue the stock dividend in proportion to the percentage of stock owned. O D) The corporation must give the holder the option to receive cash in lieu of stock.

The excess of issue price over par of common stock is termed a(n) a. income O b. premium C. discount O d. deficit

7. These are distributions of the earnings of the corporation in the form of the corporation's own shares. 8. It is the procedure of restating assets, liabilities and share capital balances at its fair value for the purpose of eliminating deficit. 9. Share option is the best example of this kind of share-based compensation plan.  10. The date the liability for dividends must be recognized

S1: The trust fund doctrine holds that share capital of a corporation is considered a trust fund for the protection of the shareholders. S2: A no par share is one without any value appearing on the face of the stock certificate, thus, it is issued for free.  A.Both statements are true B. Both statements are false C. Only S1 is true D. Only S2 is true

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…

Generally, once declared, a cash dividend ordinary shares becomes a liability of the corporation. * O True O False

i. Explain the corporate characteristic termed “no mutual agency” ii. Explain the corporate characteristic termed limited liability. iii. Explain the term outstanding stock. iv. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? v. Is it true or false that all forms and classes of stock carry voting rights?   vii. Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the income statement?

1. The pre-emptive right of a common stockholder is the right to   Choices; share proportionately in corporate assets upon liquidation. share proportionately in any new issues of stock of the same class. receive cash dividends before they are distributed to preferred stockholders. exclude preferred stockholders from voting rights.     2. In computing diluted earnings per share, interest expense on convertible bond payable should be   Choices   ignored Added back to net income net of tax Added back to net income at gross Deducted from net income net of tax   Clear selection

Which of the following statements correctly relate to ordinary shares? i) They represent an ownership interest.ii) Ordinary equity holders are the first to have their claims met in the event of the company going into administration.iii) As dividends are the return to the shareholders, they are paid out of operating profits before tax.iv) Control rights often differ between ordinary and other classes of share.

If a company chooses to purchase its own shares and then either (1) retires the repurchased shares and issues additional shares, or (2) resells the repurchased shares, can a gain or loss be recognized by the company? Why or why not?