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.
g. Government regulation is expensive
Government regulation for corporate is considered expensive and it is a disadvantage of a corporate.
Government regulation of the U.S. economy has expanded enormously throughout the most recent century, prompting business complaints that interventions hinder growth and productivity.
Corporations and their representatives often revile government rules as irrational impediments to profits, job creation and economic efficiency. Government has passed several law for corporation regarding welfare of public in large also.
Question: Accounting for the purchase and sale of treasury stock
Discount Furniture, Inc. completed the following treasury stock transactions in 2018:
Dec. 1 Purchased 1,900 shares of the company’s $1 par value common stock as treasury stock, paying cash of $5 per share.
15 Sold 200 shares of the treasury stock for cash of $8 per share.
20 Sold 1,000 shares of the treasury stock for cash of $1 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on December 20 is $2,400.)
2. How will Discount Furniture, Inc. report treasury stock on its balance sheet as of December 31, 2018?
Question: Accounting for cash dividends
Java Company earned net income of $85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value, $120,000) and a $0.25 per share cash dividend on its common stock (50,000 shares). Java then paid the dividends on January 4, 2019.
1. Journalize for Java the entry declaring the cash dividends on December 15, 2018.
Journalizing issuance of stock
Steller Systems completed the following stock issuance transactions:
May 19 Issued 1,700 shares of $3 par value common stock for cash of $10.50 per share.
Jun. 3 Issued 300 shares of $9, no-par preferred stock for $15,000 cash.
11 Received equipment with a market value of $68,000 in exchange for 5,000 shares of the $3 par value common stock.
1. Journalize the transactions. Explanations are not required.
Question: Journalizing a large stock dividend
Nelly, Inc. had 320,000 shares of $2 par value common stock issued and outstanding as of December 15, 2018. The company is authorized to issue 1,300,000 common shares. On December 15, 2018, Nelly declared a 40% stock dividend when the market value for Nelly’s common stock was $7 per share. The stock was issued on Dec. 30.
2. How many shares of common stock are outstanding after the dividend?
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