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Match (by letter) the following terms with their definitions. Each letter is used only once.

Terms_____ 1. Publicly held corporation._____ 2. Organization chart._____ 3. Articles of incorporation._____ 4. Limited liability._____ 5. Initial public offering. _____ 6. Double taxation._____ 7. S corporation._____ 8. Limited liability company.\begin{matrix} \text{Terms}\\ \hline \text{\_\_\_\_\_ 1. Publicly held corporation.}\\ \text{\_\_\_\_\_ 2. Organization chart.}\\ \text{\_\_\_\_\_ 3. Articles of incorporation.}\\ \text{\_\_\_\_\_ 4. Limited liability.}\\ \text{\_\_\_\_\_ 5. Initial public offering. }\\ \text{\_\_\_\_\_ 6. Double taxation.}\\ \text{\_\_\_\_\_ 7. S corporation.}\\ \text{\_\_\_\_\_ 8. Limited liability company.}\\ \end{matrix}

Definitionsa. Shareholders can lose no more than the amount they invest in the company.b. Corporate earnings are taxed twice-at the corporate level and individual shareholder level.c. Like an S corporation, but there are no limitations on the number of owners as in an S corporation.d. Traces the line of authority within the corporation.e. Allows for legal treatment as a corporation, but tax treatment as a partnership.f. Has stock traded on a stock exchange such as the New York Stock Exchange (NYSE).g. The first time a corporation issues stock to the public.h. Describes (a) the nature of the firm’s business activities, (b) the shares to be issued, and (c) the composition of the initial board of directors.\begin{matrix} \text{Definitions}\\ \hline \text{a. Shareholders can lose no more than the amount they invest in the company.}\\ \text{b. Corporate earnings are taxed twice-at the corporate level and individual shareholder level.}\\ \text{c. Like an S corporation, but there are no limitations on the number of owners as in an S corporation.}\\ \text{d. Traces the line of authority within the corporation.}\\ \text{e. Allows for legal treatment as a corporation, but tax treatment as a partnership.}\\ \text{f. Has stock traded on a stock exchange such as the New York Stock Exchange (NYSE).}\\ \text{g. The first time a corporation issues stock to the public.}\\ \text{h. Describes (a) the nature of the firm's business activities, (b) the shares to be issued, and (c) the composition of the initial board of directors.}\\ \end{matrix}


DAE Parts Shop began business on January 1, 2019. The corporate charter authorized issuance of 20,000 shares of $5 par value common stock and 5,000 shares of$10 par value, 5% cumulative preferred stock. DAE issued 12,000 shares of common stock at $25 per share on January 2, 2019. What effect does the entry to record the issuance of stock have on total stockholders’ equity?

a. increase of$340,000

b. increase of $300,000

c. increase of$150,000

d. increase of $120,000


Answered 1 year ago
Answered 1 year ago
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In this problem, we are asked about the effects of the issuance of stock on the stockholders’ equity.

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