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Chapter 7

Corporate Form of Business Organization

Multiple Choice Questions

1. D 6. C

2. B 7. C

3. A 8. A

4. D 9. C

5. B 10. A

Test Material

Test Material 7-1

Canada Corporation

Shareholders E!it"

#!ne 30$ 2007

Contri%!ted Capital

&re'eren(e shares ) &100 par *al!e$ 8+

(!,!lati*e (on*erti%le$ 2$000 share

a!thori-ed and o!tstandin &200$000

&aid/in (apital in e(ess o' par *al!e 10$000 &210$000

rdinar" shares ) &10 stated *al!e$ 50$000

shares a!thori-ed$ 30$000 shares

o!tstandin &300$000

rdinar" shares s!%s(ri%ed 100$000&aid/in (apital in e(ess o' stated *al!e 50$000 450$000

otal (ontri%!ted (apital &660$000

etained earnins de'i(it 20$000

otal shareholders e!it" &640$000

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2 Chapter 7

Test Material 7-2

ran(is(o Corporation

Shareholders E!it"

De(e,%er 31$ 2007

Contri%!ted Capital

&re'eren(e shares ) &100 par *al!e$ 9+

(!,!lati*e$ 20$000 shares a!thori-ed

ss!ed and o!tstandin$ 5$000 shares &500$000

S!%s(ri%ed %!t not iss!ed$ 1$000 shares 100$000

&aid/in (apital in e(ess o' par *al!e )

pre'eren(e 18$000 & 618$000

rdinar" shares ) &10 par *al!e$ 100$000shares a!thori-ed$ 70$000 shares

o!tstandin &700$000

&aid/in (apital in e(ess o' par *al!e 560$000 1$260$000

otal (ontri%!ted (apital &1$878$000etained earnins de'i(it 122$000

otal shareholders e!it" &1$756$000

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