Which of the following is true of a share exchange?
A) The subsidiary corporation ceases to exist after the share exchange.
B) The legal existence of both corporations is retained after the exchange.
C) The shares of both parent and subsidiary corporations are divided equally between themselves.
D) The subsidiary corporation can have a maximum of three shareholders in the exchange.
B
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Tiger Woods' endorsement deals were terminated by a host of sponsors, including Accenture, Gillette, AT&T, and General Motors. What are the reasons for these companies dropping Woods from their promotional efforts?
What will be an ideal response?
On January 1, a corporation had 25,000 shares of common stock outstanding. An additional 10,000 shares were issued on July 1, and on November 1, the company declared a 2-for-1 stock split. What is the denominator in the earnings per share calculation?
A) 35,000 B) 56,000 C) 60,000 D) 50,000
The term "public relations advertising" is synonymous with all of the following EXCEPT ________
A) institutional advertising B) integrated advertising C) public service advertising D) issues advertising
On July 1, Ferguson Company sold merchandise in the amount of $5,800 to Tracey Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Ferguson uses the perpetual inventory system and the gross method. On July 5, Tracey returns some of the merchandise, which is not defective. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Ferguson must make on July 5 is:
A.
| Accounts receivable | 500 | |
| Sales returns and allowances | 500 |
B.
| Accounts receivable | 500 | |
| Sales returns and allowances | 500 | |
| Cost of goods sold | 350 | |
| Merchandise inventory | 350 |
C.
| Sales returns and allowances | 500 | |
| Accounts receivable | 500 | |
| Merchandise inventory | 350 | |
| Cost of goods sold | 350 |
D.
| Sales returns and allowances | 500 | |
| Accounts receivable | 500 |
E.
| Sales returns and allowances | 350 | |
| Accounts receivable | 350 |