Acct 212 week 7 quiz 100 solutions v1 devry university
1. The advantages of a corporation compared to a sole proprietorship or partnership include: Lower total taxes. The ability of stockholders to make operating decisions for their company. Limited liability. Less paper work. 2. Preferred stock is called preferred because it usually has two preferences over common stock. These preferences relate to: Dividends and voting rights. Par value and dividends. The preemptive right and voting rights. Dividends and distribution of assets if the corporation is dissolved. 3. When a company issues 38,000 shares of $4 par value common stock for $40 per share, the journal entry for this issuance would include: A credit to Additional Paid-in Capital for $1,368,000. A debit to Additional Paid-in Capital for $152,000. A credit to Common Stock for $1,520,000. A debit to Cash for $152,000. ((40-4)*38000)
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