Of two corporations organized at approximately the same time and engaged in competing businesses,one issued $80 par common stock and the other issued $1 par common stock. Do the par designations provide any indication as to which stock is preferable as an investment? Explain.

Of two corporations organized at approximately the same time and engaged in competing businesses,one issued $80 par common stock and the other issued $1 par common stock. Do the par designations provide any indication as to which stock is preferable as an investment? Explain.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 1MC

See similar textbooks

Related questions

Q: Of two corporations organized at approximately the same time and engaged in competing businesses,…

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: On September 1, a corporation had 100,000 shares of $2 par value common stock, and $1,000,000 of…

A: When an organization increases the number of its stocks to enhance the stock's liquidity is known as…

Q: The charter of a corporation provides for the issuance of 91,724 shares of common stock. Assume that…

A: When shares are reacquired, the dividends are not required to be paid on such stocks.

Q: on 10 e par value per share of common stock represents: a. an arbitrary amount established in the…

A: A par value of share is also called as Face value.

Q: Which of the following represents a liability? The obligation to pay for goods that an entity…

A: The assets and liabilities are the main aspects of the business which are recorded in the balance…

Q: How would I journalize the following transaction? Mar. 2 Issued 6,100 shares of $5 par value…

A: Services performed in helping the company to incorporate is the organization cost that is incurred…

Q: The following note related to equity was reported in Jinpain International's (CHN) annual report. On…

A: a). The record date decided by the board of directors of a company is the date by which the names of…

Q: Jacobson Company is considering an investment in the common stock of Biltrite Company. What are the…

A: a. 15% of Biltrite’s outstanding shares: Jacobson can take this opportunity. Jacobson has a passive…

Q: For accounting purposes, the method used to account for investments in common stock is determined…

A: If a firm invests in common stock (Equity) then, Required, For the purpose of its Accounting, the…

Q: ‘An associate is an entity over which the investor has significant influence’ (para 3). Which of…

A: AN ASSOCIATE IS AN ENTITY OVER WHICH AN INVESTOR HAS SIGNIFICANT INFLUENCE , BEING ABLE TO…

Q: The charter of a corporation provides for the issuance of 95,735 shares of common stock. Assume that…

A: Formulas: Cash dividend = Out standing shares * Dividend per share Cash dividend =(Shares issued -…

Q: The charter of a corporation provides for the issuance of 114,615 shares of common stock. Assume…

A: Note: Dividend is paid on the number of shares issued and outstanding. Number of shares issued and…

Q: On the date of incorporation, the condensed balance sheet of Alom Partnership showed the following:…

A: Authorised capital is maximum amount of capital that can be issued by a corporation. A corporation…

Q: Prepare the journal entries with narrations to record the following: The issuances of stock. Close…

A: Journal entries refers to the official book of a firm/company which is used to record the day to day…

Q: When comparing common and preferred stock, indicate whether each of the following statements is true…

A: 1. False the preferred shareholders get guaranteed dividend but not higher than common stockholders…

Q: condensed balance sheet of Alom Partnership showed the following: Cash P 28,000 Other…

A: Paid in capital is total amount received from issuance of ordinary shared and preference shares.…

Q: The owners are desirous of comparing serval financial transactions and possible outcomes to assist…

A: Here provide the details of preparation of journal entry for the issuance of shares and transfer the…

Q: This comment appeared in the annual report of MacCloud Inc.: “The Company could pay cash or property…

Q: The charter of a corporation provides for the issuance of 94,546 shares of common stock. Assume that…

A: Dividend is paid on the shares outstanding. Shares outstanding = 41,432 - 3,112 = 38,320 shares

Q: Analyze the following: I – The cumulative feature of preference shares requires that dividends not…

A: Shares can be of various types. The most commonly traded shares are preference shares an equity…

Q: Discuss the accounting treatment, if any, that should be given to each of the following items in…

A: Earnings per share EPS is an essential financial metric, which aims to evaluate the profitability of…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: Stock Splits: It is a method of increasing the total number of outstanding shares thereby, reducing…

Q: When a corporation has only one class of share capital, book value per share is computed as * O…

A: 1. Book Value per Share - Book value per share is the value of the firm that the shareholder's would…

Q: A corporation is authorized to issue both ordinary and cumulative, non- participating preference…

A: Cumulative preference shareholders are those shareholders who receive the dividends for the years in…

Q: shares were originally issued and 13,800 were subsequently reacquired. What is the number of shares…

A: Common stock is the most common type of stock that is issued by the stockholders. It qualifies…

Q: In each of the following independent situations, determine if the redemption of shares will be…

A: After redemption, if the shareholder will still own shares of the corporation, the considerably…

Q: Rogers & Hart formed a corporation and had the following organization costs and stock transactions…

A: 1. Pre- preliminary Expense = Preliminary expense are incurred before commencement of the…

Q: The charter of a corporation provides for the issuance of 106,898 shares of common stock. Assume…

A: No. of shares issued ansd outstanding = No. of shares originally issued - No. of shares reacquired =…

Q: An entity owned 100% of another entity’s preference shares and 20% of ordinary shares. The…

A: Investment income is the return earned by the company by making the investment. It is calculated by…

Q: The par value of ordinary shares is equal to? a. The amount received by the corporation when the…

A: A larger amount of money can be received if the shares are issued at a higher price than par. The…

Q: Discuss the accounting treatment, if any, that should be given to each of the following items in…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: On the date of incorporation, the condensed balance sheet of Alom Partnership showed the following:…

A: Partnership means where two or more person comes together to do some common business activity and…

Q: Which statement is incorrect? * A. EPS disclosures are required for entities whose ordinary shares…

A: EPS = Earning Per Share It refers to company's net profit Divided by No of common share…

Q: A controlling financial interest traditionally has been defined as the investor corporation's…

A: Controlling interest refers to the interest in the company that gives the power to control the…

Q: The par value per share of common stock represents the O a. minimum selling price of the stock…

A: Common Stock:-It is a security that represents the ownership in the corporation. It is the shares…

Q: he charter of a corporation provides for the issuance of 99,542 shares of common stock. Assume that…

A: Given that: Total authorised shares = 99,542 shares Original issued shares = 39624 shares Reacquired…

Q: The charter of a corporation provides for the issuance of 95,662 shares of common stock. Assume that…

A: Dividend:-It is a form of profit which shareholder received in return of their investment made in…

Q: Walton decided to issue additional new common stock. Mr. Adib Rahman, an individual investor…

A: Mr. Adib Rahman an investor buy (100 shares) of this stock, from Munawar associates which is the…

Q: Requirement A Prepare the journal entries with narrations to record the following: The issuances…

A: A company is being formed on 1st January 2021, the company's charter has authorized share capital…

Q: Refer to Alom, How much are the total assets of the new corporation?

A: Companies sometimes provides the holder of a shares of another company an option to sell those…

Q: On the date of incorporation, the condensed balance sheet of Alom Partnership showed the following:…

A: Share Subscription In the share subscription which are involved with the preference shares and…

Q: Part A - A corporation reacquires 60,000 shares of its own $10 par common stock for $3,000,000,…

A: Reacquired shares are also known as treasury stock and it shown under shareholder's equity as a…

Q: The owners are desirous of comparing serval financial transactions and possible outcomes to assist…

A: In the context of the given question, we are required to prepare the statement of stockholders'…

Q: At December 31, year 1, Charter Holding Co. owned the following marketable securities in capital…

A: Solution A journal is a company's official book in which all business transaction are recorded in…

Q: Equity securities acquired by a corporation which are accounted for by recognizing unrealized…

A: When some investments are made in some other company or corporation, then it depends on the quantum…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following measures the portion of a corporations profit allocated to each outstanding share of common stock? A. retained earnings B. EPS C. EBITDA D. NOPAT
Par value of a stock refers to the ________. A. issue price of a stock B. value assigned by the incorporation documents C. maximum selling price of a stock D. dividend to be paid by the corporation
For accounting purposes, the method used to account for investments in common stock is determined by: a. the amount paid for the stock by the investor b. whether the acquisition of the stock by the investor was "friendly" or "hostile" c. the extent of an investor's influence over the operating and financial affairs of the investee d. whether the stock has paid dividends in past years
.What account should be debited when stock issuance costs are associated with the initial issuance of stock at incorporation? Group of answer choices a. Organization Expense b. Additional Paid-in Capital c. Organization Costs d. Common stock
When using the equity method of accounting, when is revenue recorded on the books of the investor company?a. When the fair value of the affiliate stock increases.b. When a dividend is received from the affiliate.c. When the affiliate company reports net income.d. Both b and c above.
When a corporation has outstanding both common and preferred stock Select one: a. Earnings per share is computed without regard to the amount of dividends declared on common stock. b. Basic and diluted earnings per share are reported only if the preferred stock is cumulative c. Earnings per share is reported for each type of stock outstanding d. Earnings per share is computed without regard to the amount of the annual preferred dividends.
Subject: Financial Accounting and Reporting Required: Determine the followinga. Issue price of preference sharesb. Ordinary shares issuedc. Ordinary shares outstandingd. Issue price of ordinary sharese. Legal capital of the corporationf. Contributed capital of the corporationg. Total shareholders’ equityh. Cost per treasury share
The par value of ordinary share capital represents a. The amount received by the corporation when the share was originally issued. b. The book value of the share capital c. The liquidation value of the share capital d. The legal nominal value assigned to the share capital
The total amount of cash and other assets received by a corporation from the stockholders in exchange for the shares is __________Required to answer. Single choice. a. referred to as paid-in capital b. always below its stated value c. referred to as retained earnings d. always equal to par value
Which of the following is entitled to dividends? Total outstanding liability Total authorized shares Total shares issued Total shares issued, net of treasury shares What is the date on which the fair value of the equity instrument granted is measured? Grant date Report date Measurement date Exercise date
Match each of the following terms with the appropriate definition. A document that gives a designated agent the right to vote a stockholder's shares of stock. The date specified by corporation directors for identifying stockholders to receive dividends. The date on which the directors vote to pay a cash dividend. The ratio of a company's current market value per share to its net income per share. Occurs when a corporation calls in its stock and replaces cach 1. Dividend Yield share with more than one 2. Reverse Stock Split new share; decreases both the market value per share and the par or stated value per share. 3. Convertible Preferred Stock 4. Price-Earnings Ratio Net income less preferred dividends divided by weighted-average 5. Date of Record common shares 6. Proxy outstanding. 7. Stock Split Stock that gives its holders the option to exchange their shares for common shares at a specified rate. 8. Basic Earnings per Share 9. Cumulative Preferred Stock Stock that has a right to be…
If a corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? 2. Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer.