1. A corporation sold 10,000 shares of its $2 par value common stock at a cash p
ID: 2381764 • Letter: 1
Question
1. A corporation sold 10,000 shares of its $2 par value common stock at a cash price of $7 per share. The entry to record this transaction would include:
A. A debit to Paid-in Capital in Excess of Par Value for $42,000.
B. A debit to Cash for $140,000.
C. A credit to Common Stock for $20,000.
D. A credit to Common Stock for $100,000.
E. A credit to Paid-in Capital in Excess of Par Value, Common Stock for $182,000.
2. A corporation declared and issued a 30% stock dividend on November 1. The following information was available immediately prior to the dividend:
Retained earnings........................$750,000 Shares issued and outstanding...............60,000 Market value per share......................$15 Par value per share.........................$5
The amount that the common stock account will increase (decrease) as a result of recording this stock dividend is:
A. $45,000.
B. $135,000.
C. $(45,000).
D. $90,000.
E. $0.
3. A company has 1,000 shares of $10 par value, 15% cumulative preferred stock and 10,000 shares of $10 par value common stock outstanding. The company paid no dividends in its first two years of operation. The cash dividend that must be paid to preferred stockholders in the third year before any dividend is paid to common stockholders is:
A. $1,000.
B. $1,250.
C. $2,250.
D. $3,500.
E. $4,500.
4. Prior to June 1, a company has never had any treasury stock transactions. A company repurchased 10 shares of its common stock on June 1 for $50 per share. On July 1, it reissued 4 of these shares at $54 per share. On August 1, it reissued the remaining treasury shares at $48 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2?
A. $4 credit.
B. $0.
C. $100 debit.
D. $50 debit.
E. $6 debit.
5. Calculate the bond issue price of a $10,000 face value, 8% stated rate, 4 year bond that pays interest semi-annually. The market rate of interest on the issue date is 10%. Use the PV tables.
A. $9,353
B. $10,852
C. $9,148
D. $8,000
Explanation / Answer
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