1. A company issues 1 million shares of common stock with a par value of $0.14 for $16.20 a share. The entry to record this transaction includes a debit to Cash for:
A) $140,000 and a credit to Common Stock for $140,000.
B) $16,200,000 and a credit to Common Stock for $16,200,000.
C) $16,200,000, a credit to Common Stock for $140,000, and a credit to Additional Paid-in Capital for $16,060,000.
D) $140,000, a debit to Capital Receivable for $16,060,000, a credit to Common Stock for $140,000, and a credit to Additional Paid-in Capital for $16,060,000.
2) A company sells 1 million shares of common stock with no par value for $16.00 a share. In recording the transaction, it would debit:
A) Cash and credit Additional Paid-in Capital for $16.00 million.
B) Common Stock and credit Additional Paid-in Capital for $16.00 million.
C) Common Stock and credit Cash for $16.00 million.
D) Cash and credit Common Stock for $16.00 million.
3) Anthem Inc. issues 200,000 shares of stock with a par value of $0.09 for $158 per share. Three years later, it repurchases these shares for $88 per share. Anthem records the repurchase in which of the following ways?
A) Debit Stockholders' Equity for $31.60 million, credit Additional Paid-in Capital for $17.60 million and credit Cash for $17.60 million.
B) Debit Common Stock for $18,000, debit Additional Paid-in Capital for $17,582,000 and credit Cash for $17.60 million.
C) Debit Treasury Stock for $17.60 million and credit Cash for $17.60 million.
D) Debit Common Stock for $18,000, debit Additional Paid-in Capital for $31,582,000 and credit Cash for $31.60 million.
4) GE buys back 307,000 shares of its stock from investors at $52 a share. Two years later it reissues this stock for $72 a share. The stock reissue would be recorded with a debit to Cash for:
A) a debit to Cash of $15.96 million, a debit to Additional Paid-in Capital of $6.14 million, a credit to Treasury Stock of $15.96 million, and a credit to Stockholders' Equity of $6.14 million.
B) a debit to Cash of $22.10 million and a credit to Treasury Stock of $22.10 million.
C) a debit to Cash of $22.10 million, a credit to Treasury Stock of $15.96 million, and a credit to Additional Paid-in Capital of $6.14 million.
D) a debit to Cash of $22.10 million, a credit to Treasury Stock of $15.96 million, and a credit to Gain on Sale of Treasury Stock for $6.14 million.
| 1. A company issues 1 million shares of common stock with a par value of $0.14 for $16.20 a share. The entry to record this transaction includes a debit to Cash for: |
| A) $140,000 and a credit to Common Stock for $140,000. |
| B) $16,200,000 and a credit to Common Stock for $16,200,000. |
| C) $16,200,000, a credit to Common Stock for $140,000, and a credit to Additional Paid-in Capital for $16,060,000. |
| D) $140,000, a debit to Capital Receivable for $16,060,000, a credit to Common Stock for $140,000, and a credit to Additional Paid-in Capital for $16,060,000.
A) Cash and credit Additional Paid-in Capital for $16.00 million. B) Common Stock and credit Additional Paid-in Capital for $16.00 million. C) Common Stock and credit Cash for $16.00 million. D) Cash and credit Common Stock for $16.00 million.
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Related questions
1. A company purchases 1,000 shares of its $10 par value common stock when the market price per share is $25. The entry to record the treasury stock purchase is:
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2. Tri-City Corporation reports on its balance sheet 1,000 shares of $100 par value, 5%, cumulative, preferred stock; 6,000 shares issued, 5,000 outstanding, of $10 par value common stock; Additional Paid-in Capital, Common of $40,000; 1,000 shares of Treasury Stock, Common at $10,000; and Retained Earnings of $80,000. The preferred shares are callable at $110, and no dividends are in arrears.
The book value per share of Tri-City's common stock is
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3.Johanna Corporation issues 1,000 shares of $20 par value stock for $50,000. The entry to record the stock issue is:
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1. A company issued 165 shares of $100 par value common stock for $17,500 cash. The total amount of paid-in capital is:
Multiple Choice
$100.
$1,000.
$1,650.
$17,500.
$16,500.
2.
A corporation issued 6,200 shares of $10 par value common stock in exchange for some land with a market value of $94,000. The entry to record this exchange is:
Multiple Choice
Debit Land $94,000; credit Common Stock $62,000; credit Paid-In Capital in Excess of Par Value, Common Stock $32,000.
Debit Land $94,000; credit Common Stock $94,000.
Debit Land $62,000; credit Common Stock $62,000.
Debit Common Stock $62,000; debit Paid-In Capital in Excess of Par Value, Common Stock $32,000; credit Land $94,000.
Debit Common Stock $94,000; credit Land $94,000.
3.
Fargo Company's outstanding stock consists of 600 shares of noncumulative 5% preferred stock with a $10 par value and 3,200 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.
| Dividend Declared | ||
| year 1 | $ | 22,000 |
| year 2 | $ | 5,000 |
| year 3 | $ | 31,000 |
The amount of dividends paid to preferred and common shareholders in year 1 is:
Multiple Choice
$300 preferred; $21,700 common.
$6,000 preferred; $16,000 common.
$19,0000 preferred; $3,000 common.
$11,000 preferred; $11,000 common.
$22,000 preferred; $0 common.
