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Chapter 13: Stockholders’ Equity

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Horngren'S Financial And Managerial Accounting
Pages: 671 - 731

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133 Questions for Chapter 13: Stockholders’ Equity

  1. What is treasury stock? What type of account is Treasury Stock, and what is the account’s normal balance?

    Found on Page 707
  2. Lena Kay and Kathy Lauder have a patent on a new line of cosmetics. They need additional capital to market the products, and they plan to incorporate the business. They are considering the capital structure for the corporation. Their primary goal is to raise as much capital as possible without giving up control of the business. Kay and Lauder plan to invest the patent (an intangible asset, which will be transferred to the company’s ownership in lieu of cash) in the company and receive 100,000 shares of the corporation’s common stock. They have been offered $100,000 for the patent, which provides an indication of the fair market value of the patent. The corporation’s plans for a charter include an authorization to issue 5,000 shares of preferred stock and 500,000 shares of $1 par common stock. Kay and Lauder are uncertain about the most desirable features for the preferred stock. Prior to incorporating, they are discussing their plans with two investment groups. The corporation can obtain capital from outside investors under either of the following plans:

    Found on Page 729
  3. What is a corporation?

    Found on Page 707
  4. List three characteristics of a corporation.

    Found on Page 707
  5. Determining the effect of stock dividends, stock splits, and treasury stock transactions

    Found on Page 716
  6. Determining the effect of stock dividends, stock splits, and treasury stock transactions

    Found on Page 716
  7. Preparing a multi-step income statement

    Found on Page 716
  8. Computing earnings per share

    Found on Page 716
  9. Preparing a statement of retained earnings

    Found on Page 717
  10. Computing rate of return on common stockholders’ equity

    Found on Page 717

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