The charier of a corporation provides lor the issuance of 100.000 shares of comm

Question

The charier of a corporation provides lor the issuance of 100.000 shares of common stock. Assume that 45.000 shares were originally issued and 5.000 were subsequently reacquired What is the number of shares outstanding? 5.000 45.000 40.000 50.000 Dividends to stockholders Office salaries, depreciation of office equipment and office supplies arc examples of what type of expense? Which of the items below is not a legal business entity? Which of the following is not a right possessed by common stockholders of a corporation? A corporal ion has 40.000 shares of S25 par value stock outstanding. If the corporation issues a 3-for-l stock split, the number of shares outstanding after the split will be 120.000 shares 40.000 shares 80.000 shares 13.333 shares

Explanation / Answer

1) 45,000 shares were issued and out of them, 5,000 were reacquired. So, Number of shares outstanding

= 45,000 - 5,000 = 40,000 shares.

So, option C is the correct option.

2) Dividend is paid out of profits in general. Profits are part of stockholder's equity. So, paying dividend reduces profits and consequently stockholder's equity. So, option D is the correct option.

3) Office salaries , depreciation of office equipment and office supplies are all administrative expenses. So, option C is the correct option.

4) Entrepreneurship is an act of setting up a business which can be a sole proprietorship, partnership or a corporation. So, entrepreneurship in itself is not a legal business entity. So, option A is the correct option.

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