Unicoi Co. formed Jan 2, Yr 1. The Co. sold 10,000 shares of $2 par value stock
ID: 2370983 • Letter: U
Question
Unicoi Co. formed Jan 2, Yr 1. The Co. sold 10,000 shares of $2 par value stock for $5 per share. On Jul 1, Yr 1, Unicoi bought back 2,000 shares of stock for $6 per share. The treasury stock was resold on Sep 1, Yr 1, for $8 per share.1A) Which one of the following is the entry to record the original sale of stock?
a. DR Cash 50,000; CR Common Stock 20,000; CR Paid-in Capital in excess par 30,000
b. DR Cash 50,000; CR Common Stock 30,000; CR Paid-in Capital in excess par 20,000
c. DR Common Stock 30,000; CR Paid-in Capital in excess par 20,000; CR Cash 50,000
d. DR Common Stock 20,000; CR Paid-in Capital in excess par 30,000; CR Cash 50,000
1B) Which one of the following is the correct entry to record the purchase of Treasury Stock?
a. DR Treasury stock 12,000; CR Cash 12,000
b. DR Cash 12,000; CR Treasury stock 12,000
c. DR Common stock 12,000; CR cash 12,000
d. DR cash 12,000; CR Common stock 12,000
1C) Which one of the following is the correct entry to record the sale of Treasury Stock?
a. DR Treasury stock 16,000; CR Common stock 16,000
b. DR cash 16,000; CR Treasury stock 12,000; CR Paid in capital in excess par 4,000
c. DR cash 16,000; CR Treasury stock 4,000; CR Paid in capital in excess par 12,000
d. DR Common stock 16,000; CR Treasury stock 16,000
2) When a dividend is not declared on preferred stock, and the common shareholders cannot receive a dividend until past and current dividends are paid to the preferred shareholders, the preferred stock is:
a. cumulative b. noncumulative c. nonparticipating d. participating
3) Over the vesting period for employee stock options, SFAS No. 123 requires that the entire compensation expense be recognized:
a. equally in each Yr of the vesting period
b. in the first Yr of the vesting period
c. in the last Yr of the vesting period
d. Only if the options are exercised
Explanation / Answer
1A. A 1B. A 1C. B 2. A 3. A
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