ACC291 Week 4 Do it 11-1 E11-15 E11-16 P11-6A P11-8A

Do It!11-1 Indicate whether each of the following statements is true or false.
_____ 1. The corporation is an entity separate and distinct from its owners.
_____ 2. The liability of stockholders is normally limited to their investment in the corporation.
_____ 3. The relative lack of government regulation is an advantage of the corporate form of
business.
_____ 4. There is no journal entry to record the authorization of capital stock.
_____ 5. No-par value stock is quite rare today

E11-15 On October 31, the stockholders’ equity section of Omar Company consists of common
stock $600,000 and retained earnings $900,000. Omar is considering the following two
courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding,
or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current
market price is $14 per share.

so on ...

E11-6 AI Corporation issued 100,000 shares of $20 par value, cumulative, 8% preferred stock
on January 1, 2009, for $2,100,000. In December 2011, AI declared its first dividend of $500,000.

P11-6A Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%,
noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation
assigned a $5 stated value to the common stock. At December 31, 2011, the ledger contained the
following balances pertaining to stockholders’ equity

*P11-8A The following stockholders’ equity accounts arranged alphabetically are in the ledger
of McGrath Corporation at December 31, 2011.

and so on ...

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