Deck 11: Stockholders Equity

Question 1

If a company issues 10,000 shares of $6 par value common stock at a market price of $90 per share, which of the following is the correct balance sheet entry?

A) Increase cash by $900,000 and increase paid-in capital by $900,000
B) Increase cash by $900,000 and increase retained earnings by $900,000
C) Increase revenues by $900,000
D) Increase common stock and cash by $60,000

Answer 1

Increase cash by $900,000 and increase paid-in capital by $900,000

Question 2

If a company issues 10,000 shares of $8 par value common stock at a market price of $120 per share, which of the following is the correct balance sheet entry?

A) Increase cash by $1,200,000 and increase paid-in capital by $1,200,000
B) Increase cash by $1,200,000 and increase retained earnings by $1,200,000
C) Increase revenues by $1,200,000
D) Increase common stock and cash by $80,000

Answer 2

Increase cash by $1,200,000 and increase paid-in capital by $1,200,000

Question 3

During May 2019, Mathew Outdoor Corporation announced a 3-for-1 forward stock split. This brought the number of shares outstanding from 25,792,000 shares to ___________ shares, and its $1.80 par value to _______ per share.

A) 8,597,334; $5.40
B) 8,897,334; $0.60
C) 77,376,000; $5.40
D) 77,376,000; $0.60

Answer 3

77,376,000; $0.60

Question 4

During May 2019, Brian Outdoor Corporation announced a 4-for-1 stock split. This brought the number of shares outstanding from 14,681,000 shares to ___________ shares, and its $5.40 par value to _____ per share.

A) 3,670,250; $21.60
B) 3,670,250; $ 1.35
C) 58,724,000; $21.60
D) 58,724,000; $ 1.35

Question 5

Ponce Company has 50,000 shares of $100 par value, 8% cumulative preferred stock and 160,000 shares of $60 par value common stock. Ponce declares and pays cash dividends amounting to $440,000.
If no arrearage on the preferred stock exits, how much in total dividends is paid to each class of stock?

A)

B)

C)
D)

Question 6

Nunez Company has 50,000 shares of $300 par value, 8% cumulative preferred stock and 160,000 shares of $180 par value common stock. Nunez declares and pays cash dividends amounting to $1,320,000.
If no arrearage on the preferred stock exits, how much in total dividends is paid to each class of stock?

A)
B)
C)
D)

Question 7

Use the following information to answer. On September 1, 2019, Nichole Company's balance sheet indicates there are 1,800,000 shares of $60 par value common shares in the Common Stock account and $1,350,000 in the Additional Paid-in Capital account. There are 3,000,000 shares authorized. On September 2, Nichole splits its stock 2 for 1.

-How many shares of Nichole common stock are issued and outstanding immediately after the stock split?

A) 900,000
B) 3,600,000
C) 4,200,000
D) 12,000,000

Question 8

Use the following information to answer. On September 1, 2019, Nichole Company's balance sheet indicates there are 1,800,000 shares of $60 par value common shares in the Common Stock account and $1,350,000 in the Additional Paid-in Capital account. There are 3,000,000 shares authorized. On September 2, Nichole splits its stock 2 for 1.

-What is the dollar balance of Nichole's common stock account immediately after the stock split?

A) $ 54,000,000
B) $108,000,000
C) $ 27,000,000
D) $216,000,000

Question 9

Use the following information to answer. On September 1, 2019, CNN Company's balance sheet indicates there are 1,800,000 shares of $120 par value common shares in the Common Stock account and $18,000,000 in the Additional Paid-in Capital account. There are 4,000,000 shares authorized. On September 2, CNN splits its stock 2 for 1.

-How many shares of CNN common stock are issued and outstanding immediately after the stock split?

A) 1,200,000
B) 4,800,000
C) 3,600,000
D) 16,000,000

Question 10

Use the following information to answer. On September 1, 2019, CNN Company's balance sheet indicates there are 1,800,000 shares of $120 par value common shares in the Common Stock account and $18,000,000 in the Additional Paid-in Capital account. There are 4,000,000 shares authorized. On September 2, CNN splits its stock 2 for 1.

-What is the dollar balance of CNN's common stock account immediately after the stock split?

A) $ 36,000,000
B) $216,000,000
C) $ 18,000,000
D) $144,000,000

Question 11

Jessie Company has 40,000 shares of $240 par value, 5% cumulative preferred stock and 140,000 shares of $60 par value common stock. Jessie declares and pays cash dividends amounting to $675,000.
If no arrearage on the preferred stock exists, how much in dividends per share (use two decimal places) is paid to the common stockholders?

A) $ 1.39
B) $11.92
C) $ 2.98
D) $ 4.80

Question 12

Alicia Company has 40,000 shares of $320 par value, 5% cumulative preferred stock and 140,000 shares of $80 par value common stock. Alicia declares and pays cash dividends amounting to $900,000.
If no arrearage on the preferred stock exists, how much in dividends per share (use two decimal places) is paid to the common stockholders?

A) $ 1.86
B) $16.00
C) $ 4.00
D) $ 6.44

Question 13

Altgeld, Inc., has outstanding 10,000 shares of $150 par value, 7% nonparticipating, cumulative preferred stock and 10,000 shares of $30 par value common stock.
If the dividend on preferred stock is one year in arrears, and the total cash dividend declared this year is $216,000, then the total amounts distributed to preferred and common stockholders, respectively, are:

A) $ 63,000 and $153,000
B) $210,000 and $ 6,000
C) $105,000 and $111,000
D) $180,000 and $ 36,000

Question 14

Belmont, Inc., has outstanding 10,000 shares of $200 par value, 7% nonparticipating, cumulative preferred stock and 10,000 shares of $40 par value common stock.
If the dividend on preferred stock is one year in arrears, and the total cash dividend declared this year is $288,000, then the total amounts distributed to preferred and common stockholders, respectively, are:

A) $ 84,000 and $204,000
B) $280,000 and $ 8,000
C) $108,000 and $180,000
D) $240,000 and $ 48,000

Question 15

Kimball, Inc., has outstanding 10,000 shares of $75 par value, 6% nonparticipating, cumulative preferred stock and 16,000 shares of $15 par value common stock.
If the dividend on preferred stock is two years in arrears, and the total cash dividend declared this year is $255,000, then the total amounts distributed to preferred and common stockholders, respectively, are:

A) $135,000 and $120,000
B) $ 40,500 and $214,500
C) $ 90,000 and $165,000
D) $ 81,000 and $174,000

Question 16

Hinman, Inc., has outstanding 10,000 shares of $100 par value, 6% nonparticipating, cumulative preferred stock and 16,000 shares of $20 par value common stock.
If the dividend on preferred stock is two years in arrears, and the total cash dividend declared this year is $340,000, then the total amounts distributed to preferred and common stockholders, respectively, are:

A) $180,000 and $160,000
B) $ 54,000 and $286,000
C) $127,500 and $212,500
D) $108,000 and $232,000

Question 17

Annabeth, Inc. has outstanding 8,000 shares of $150 par value, 8% nonparticipating, cumulative preferred stock, and 20,000 shares of $45 par value common stock.
If the dividend on preferred stock is one year in arrears, and the total cash dividend declared this year is $420,000, the total amounts distributed to preferred and common stockholders are, respectively:

A) $192,000 and $228,000
B) $ 96,000 and $324,000
C) $120,000 and $300,000
D) $180,000 and $240,000

Question 18

Wilson, Inc. has outstanding 20,000 shares of $80 par value, 6% nonparticipating, cumulative preferred stock, and 30,000 shares of $20 par value common stock.
If the dividend on preferred stock is two years in arrears, and the total cash dividend declared this year is $414,000, the total amounts distributed to preferred and common stockholders are, respectively:

A) $ 96,000 and $318,000
B) $192,000 and $222,000
C) $ 48,000 and $366,000
D) $288,000 and $126,000

Question 19

Bandit, Inc. issued, for $57 per share, 5,000 shares of $30 par value common stock. The journal entry to record this transaction is:

A) Cash 285,000
$\quad$ $\quad$ $\quad$ $\quad$ Common Stock 285,000
B) Cash 285,000
$\quad$ $\quad$ $\quad$ Common Stock 150,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 135,000
C) Cash 285,000
$\quad$ $\quad$ $\quad$ Common Stock 150,000
$\quad$ $\quad$ $\quad$ Retained Earnings 135,000
D) Cash 285,000
$\quad$ $\quad$ $\quad$ Common Stock 150,000
$\quad$ $\quad$ $\quad$ Gain on Sale of Stock 135,000

Question 20

Minerva, Inc. issued, for $76 per share, 5,000 shares of $40 par value common stock. The journal entry to record this transaction is:

A) Cash 380,000
$\quad$ $\quad$ $\quad$ Common Stock 380,000
B) Cash 380,000
$\quad$ $\quad$ $\quad$ Common Stock 200,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 180,000
C) Cash 380,000
$\quad$ $\quad$ $\quad$ Common Stock 200,000
$\quad$ $\quad$ $\quad$ Retained Earnings 180,000
D) Cash 380,000
$\quad$ $\quad$ $\quad$ Common Stock 200,000
$\quad$ $\quad$ $\quad$ Gain on Sale of Stock 180,000

Question 21

Tatro, Inc. issued, for $60 per share, 4,000 shares of $45 par value common stock. The journal entry to record this transaction is:

A) Cash 240,000
$\quad$ $\quad$ $\quad$ Common Stock 240,000
B) Cash 240,000
$\quad$ $\quad$ $\quad$ Common Stock 180,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 60,000
C) Cash 240,000
$\quad$ $\quad$ $\quad$ Common Stock 180,000
$\quad$ $\quad$ $\quad$ Retained Earnings 60,000
D) Cash 240,000
$\quad$ $\quad$ $\quad$ Common Stock 180,000
$\quad$ $\quad$ $\quad$ Gain on Sale of Stock 60,000

Question 22

Kailey, Inc. issued 20,000 shares of no-par common stock, stated value $20, at $32 cash per share. The journal entry to record this transaction is:

A) Cash 640,000
$\quad$ $\quad$ $\quad$ Common Stock 640,000
B) Cash 640,000
$\quad$ $\quad$ $\quad$ Common Stock 400,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 240,000
C) Cash 640,000
$\quad$ $\quad$ $\quad$ Common Stock 400,000
$\quad$ $\quad$ $\quad$ Retained Earnings 240,000
D) Cash 640,000
$\quad$ $\quad$ $\quad$ Common Stock 400,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Stated Value 240,000

Question 23

Elijah, Inc. issued 20,000 shares of no-par common stock, stated value $60, at $96 cash per share. The journal entry to record this transaction is:

A) Cash 1,920,000
$\quad$ $\quad$ $\quad$ Common Stock 1,920,000
B) Cash 1,920,000
$\quad$ $\quad$ $\quad$ Common Stock 1,200,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 720,000
C) Cash 1,920,000
$\quad$ $\quad$ $\quad$ Common Stock 1,200,000
$\quad$ $\quad$ $\quad$ Retained Earnings 720,000
D) Cash 1,920,000
Common Stock 1,200,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Stated Value 720,000

Question 24

Necessities, Inc. issued 750 shares of no-par common stock, with no stated value, for $60 cash per share. The journal entry to record this transaction is:

A) Cash 45,000
$\quad$ $\quad$ $\quad$ Common Stock 45,000
B) Cash 45,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 45,000
C) Cash 45,000
$\quad$ $\quad$ $\quad$ Common Stock 15,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 30,000
D) Cash 45,000
$\quad$ $\quad$ $\quad$ Common Stock 750
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 44,250

Question 25

Finest, Inc. issued 750 shares of no-par common stock, with no stated value, for $180 cash per share. The journal entry to record this transaction is:

A) Cash 135,000
$\quad$ $\quad$ $\quad$ Common Stock 135,000
B) Cash 135,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 135,000
C) Cash 135,000
$\quad$ $\quad$ $\quad$ Common Stock 45,000
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 90,000
D) Cash 135,000
$\quad$ $\quad$ $\quad$ Common Stock 1,800
$\quad$ $\quad$ $\quad$ Paid-in Capital in Excess of Par Value 133,200

Question 26

On June 1, 2019, 4,000 shares of $20 par value common stock are issued in exchange for new equipment. Comparable equipment sells for $116,000 cash. Other shares of this class of common stock originally sold for $13 per share in 2019.
The journal entry to record this exchange should debit the Equipment account for what amount?

A) $116,000
B) $ 80,000
C) $104,000
D) $-0-

Question 27

On June 1, 2019, 4,000 shares of $60 par value common stock are issued in exchange for new equipment. Comparable equipment sells for $348,000 cash. Other shares of this class of common stock originally sold for $39 per share in 2019.
The journal entry to record this exchange should debit the Equipment account for what amount?

A) $348,000
B) $240,000
C) $312,000
D) $-0-

Question 28

Circe Corporation was organized on January 1, 2019, with an authorization of 2,000,000 shares of $10 par value common stock. During 2019, Circe had the following common stock transactions:
Jan) 4: Issued 100,000 shares @ $12 per share.
Apr) 8: Issued 200,000 shares @ $14 per share.
June 9: Issued 60,000 shares @ $20 per share.
July 29: Purchased 40,000 shares (treasury) @ $20 per share.
Dec) 31: Sold 40,000 shares held in treasury @ $24 per share.
Circe had no other transactions affecting paid-in capital.
At December 31, 2019, what is the total amount of paid-in capital?

A) $5,360,000
B) $3,600,000
C) $1,840,000
D) $1,600,000

Question 29

Ioanna Corporation was organized on January 1, 2019, with an authorization of 2,000,000 shares of $30 par value common stock. During 2019, Ioanna had the following common stock transactions:
Jan) 4: Issued 100,000 shares @ $36 per share.
Apr) 8: Issued 200,000 shares @ $42 per share.
June 9: Issued 60,000 shares @ $60 per share.
July 29: Purchased 40,000 shares (treasury) @ $60 per share.
Dec) 31: Sold 40,000 shares held in treasury @ $72 per share.
Ioanna had no other transactions affecting paid-in capital.
At December 31, 2019, what is the total amount of paid-in capital?

A) $16,080,000
B) $ 10,080,000
C) $ 5,520,000
D) $ 4,800,000

Question 30

Kedzie Corporation was organized on January 1, 2019, with an authorization of 5,000,000 shares of $2 par value common stock. During 2019, Kedzie had the following common stock transactions:
Jan) 4: Issued 300,000 shares @ $16 per share.
Apr) 8: Issued 100,000 shares @ $12 per share.
July 29: Purchased 90,000 shares (treasury) @ $14 per share.
Oct) 18: Sold 60,000 shares held in treasury @ $18 per share.
Dec) 31: Sold 30,000 shares held in treasury @ $12 per share.
Kedzie had no other transactions affecting paid-in capital.
At December 31, 2019, what is the total amount of paid-in capital?

A) $6,240,000
B) $6,180,000
C) $5,320,000
D) $5,440,000

Question 31

Sava Corporation was organized on January 1, 2019, with an authorization of 5,000,000 shares of $4 par value common stock. During 2019, Sava had the following common stock transactions:
Jan) 4: Issued 300,000 shares @ $48 per share.
Apr) 8: Issued 100,000 shares @ $36 per share.
July 29: Purchased 90,000 shares (treasury) @ $42 per share.
Oct) 18: Sold 60,000 shares held in treasury @ $54 per share.
Dec) 31: Sold 30,000 shares held in treasury @ $36 per share.
Sava had no other transactions affecting paid-in capital.
At December 31, 2019, what is the total amount of paid-in capital?

A) $18,720,000
B) $18,540,000
C) $15,960,000
D) $16,320,000

Question 32

At December 31, 2019, North Corporation had 40,000 shares outstanding of $30 par value common stock. The shares were originally issued for $84 per share. On January 1, 2020, Western split its common stock 3 for 1 with a corresponding reduction in the stock's par value. The market price of the stock just before the split was $150 per share.
After the split, the balance in the common stock account is:

A) $1,200,000
B) $6,000,000
C) $3,600,000
D) $3,360,000

Question 33

At December 31, 2019, Northwest Corporation had 40,000 shares outstanding of $90 par value common stock. The shares were originally issued for $252 per share. On January 1, 2020, Northwest split its common stock 3 for 1 with a corresponding reduction in the stock's par value. The market price of the stock just before the split was $450 per share.
After the split, the balance in the common stock account is:

A) $ 3.600,000
B) $18,000,000
C) $10,800,000
D) $10,080,000

Question 34

At December 31, 2019, Bentley Corporation had 30,000 shares outstanding of $20 par value common stock. The shares were originally issued for $52 per share. On January 1, 2020, Western split its common stock 4 for 1 with a corresponding reduction in the stock's par value. The market price of the stock just before the split was $120 per share.
After the split, the balance of the common stock account is:

A) $3,600,000
B) $ 600,000
C) $1,560,000
D) $1,800,000

Question 35

At December 31, 2019, Western Corporation had 30,000 shares outstanding of $60 par value common stock. The shares were originally issued for $156 per share. On January 1, 2020, Western split its common stock 4 for 1 with a corresponding reduction in the stock's par value. The market price of the stock just before the split was $360 per share.
After the split, the balance of the common stock account is:

A) $10,800,000
B) $ 1,800,000
C) $ 4,680,000
D) $ 5,400,000

Question 36

San Antonio Corporation purchased 300 shares of its own $20 par value common stock for $15,000. Later, these shares are sold for $16,000 cash. The journal entry to record the sale includes a:

A) $ 1,000 credit to Paid-in Capital from Treasury Stock
B) $ 9,600 credit to Paid-in Capital from Treasury Stock
C) $1,000 credit to Gain on Sale of Treasury Stock
D) $16,000 credit to Treasury Stock

Question 37

Austin Corporation purchased 300 shares of its own $60 par value common stock for $45,000. Later, these shares are sold for $48,000 cash.
The journal entry to record the sale includes a:

A) $ 3,000 credit to Paid-in Capital from Treasury Stock
B) $28,800 credit to Paid-in Capital from Treasury Stock
C) $ 3,000 credit to Gain on Sale of Treasury Stock
D) $48,000 credit to Treasury Stock

Question 38

During 2019, Leon, Inc.'s net income was $700,000. Its common stockholders' equity was $1,080,000 at January 1, 2019 and $1,720,000 at December 31, 2019. During 2019, Leon had 10,000 outstanding shares of 6%, $100 par value cumulative preferred stock. During December 2019, Leon's board of directors declared the annual preferred stock dividend and a $120,000 common stock dividend.
What is Leon's 2019 return on common stockholders' equity?

A) 50.0%
B) 37.1%
C) 17.0%
D) 45.7%

Question 39

During 2019 Carol, Inc.'s net income was $2,450,000. Its common stockholders' equity was $3,240,000 at January 1, 2019 and $5,160,000 at December 31, 2019. During 2019, Carol had 10,000 outstanding shares of 6%, $450 par value cumulative preferred stock. During December 2019, Carol's board of directors declared the annual preferred stock dividend and a $360,000 common stock dividend.
What is Carol's 2019 return on common stockholders' equity?

A) 50.7%
B) 51.9%
C) 41.7%
D) 59.5%

Question 40

During 2019, Serina, Inc.'s net income was $400,000. Its common stockholders' equity was $1,400,000 at January 1, 2019 and $1,800,000 at December 31, 2019. During December 2019, Serina's board of directors declared a $50,000 preferred stock dividend and a $120,000 common stock dividend.
What is Serina's 2019 return on common stockholders' equity?

A) 14.4%
B) 25.0%
C) 21.9%
D) 15.9%

Question 41

During 2019, Troy, Inc.'s net income was $1,400,000. Its common stockholders' equity was $4,200,000 at January 1, 2019 and $5,400,000 at December 31, 2019. During December 2019, Troy's board of directors declared a $450,000 preferred stock dividend and a $360,000 common stock dividend.
What is Troy's 2019 return on common stockholders' equity?

A) 10.2%
B) 31.5%
C) 27.6%
D) 19.8%

Question 42

How would the declaration of a 10% stock dividend affect each of the following amounts (after the accounts are closed at period-end)?

A)
B)
C)
D)
E)

Question 43

Bryn Mar Company is authorized to issue 1,000,000 shares of $10 par value common stock. By March 15, 2019, the company had issued 200,000 shares at $34 per share. On March 15, 2019, the company declared a 10% stock dividend when the market price was $40 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $ 600,000
B) $ 200,000
C) $ 800,000
D) $2,400,000

Question 44

M. Majors Sporting Goods Company is authorized to issue 1,000,000 shares of $30 par value common stock. By March 15, 2019, the company had issued 200,000 shares at $102 per share. On March 15, 2019, the company declared a 10% stock dividend when the market price was $120 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $1,800,000
B) $ 600,000
C) $2,400,000
D) $7,200,000

Question 45

Linden Tree Company is authorized to issue 500,000 shares of $20 par value common stock. By March 15, 2019, the company had issued 120,000 shares at $32 per share. On March 15, 2019, the company declared a 5% stock dividend when the market price was $30 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $120,000
B) $300,000
C) $180,000
D) $450,000

Question 46

Oak Company is authorized to issue 500,000 shares of $60 par value common stock. By March 15, 2019, the company had issued 120,000 shares at $96 per share. On March 15, 2019, the company declared a 5% stock dividend when the market price was $90 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $ 360,000
B) $ 900,000
C) $ 540,000
D) $1,350,000

Question 47

Berwyn Company is authorized to issue 1,000,000 shares of $40 par value common stock. By November 15, 2019, the company had issued 50,000 shares at $50 per share. On November 15, 2019, the company declared a 30% stock dividend when the market price was $52 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $ 600,000
B) $ 780,000
C) $2,400,000
D) $3,120,000

Question 48

Mandarin Company is authorized to issue 1,250,000 shares of $15 par value common stock. By November 15, 2019, the company had issued 60,000 shares at $36 per share. On November 15, 2019, the company declared a 50% stock dividend when the market price was $45 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $1,875,000
B) $ 450,000
C) $ 900,000
D) $1,350,000

Question 49

Chive Company is authorized to issue 1,250,000 shares of $20 par value common stock. By November 15, 2019, the company had issued 60,000 shares at $48 per share. On November 15, 2019, the company declared a 50% stock dividend when the market price was $60 per share.
What amount is transferred from retained earnings to paid-in capital as a result of the stock dividend?

A) $2,500,000
B) $ 600,000
C) $1,800,000
D) $1,500,000

Question 50

Weiss Corporation reported the following information at December 31, 2019:
The total paid-in capital is:

A) $225,000
B) $300,000
C) $525,000
D) $675,000

Question 51

Krueg Corporation reported the following information at December 31, 2019:
The total paid-in capital is:

A) $300,000
B) $800,000
C) $700,000
D) $900,000

Question 52

The following selected list of accounts with their normal balances was taken from the general ledger of Robbie Company as of December 31, 2019:
Given above information, at the end of 2019:

A) Total Paid-in Capital is $2,140,000, and Total Stockholders' equity is $2,402,000
B) Total Paid-in Capital is $1,480,000, and Total Stockholders' equity is $1,218,000
C) Total Paid-in Capital is $1,810,000, and Total Stockholders' equity is $1,742,000
D) Total Paid-in Capital is $1,480,000, and Total Stockholders' equity is $1,742,000

Question 53

The following selected list of accounts with their normal balances was taken from the general ledger of Hoover Company as of December 31, 2019:
Given above information, at the end of 2019:

A) Total Paid-in Capital is $6,420,000, and Total Stockholders' equity is $7,206,000
B) Total Paid-in Capital is $4,440,000, and Total Stockholders' equity is $3,654,000
C) Total Paid-in Capital is $5,430,000, and Total Stockholders' equity is $5,226,000
D) Total Paid-in Capital is $4,440,000, and Total Stockholders' equity is $5,226,000

Question 54

A corporation received land valued at $510,000 and a building valued at $615,000 in exchange for 5,000 shares of $120 par value common stock and $300,000 cash.
The entry to record this transaction includes a credit to:

A) Paid-in capital in excess of par-common for $225,000
B) Common stock for $1,125,000
C) Retained earnings for $225,000
D) Paid-in-capital in excess of par, common stock for $525,000

Question 55

Karloff Corporation issued 25,000 shares of $10 par value common stock at $30 per share. As a result of this transaction, Karloff Corporation's:

A) Paid-in Capital in Excess of Par Value increased by $750,000
B) Paid-in Capital in Excess of Par Value increased by $250,000
C) Common Stock increased by $750,000
D) Common Stock increased by $250,000

Question 56

Bullwinkle Corporation issued 25,000 shares of $30 par value common stock at $90 per share. As a result of this transaction, Bullwinkle Corporation's:

A) Paid-in Capital in Excess of Par Value increased by $2,250,000
B) Paid-in Capital in Excess of Par Value increased by $750,000
C) Common Stock increased by $2,250,000
D) Common Stock increased by $750,000

Question 57

Westview Company has 130,000 shares authorized and 10,000 shares issued of $10 par value common stock. On January 1, 2019, the company issues an additional 2,000 shares of common stock in exchange for a building, which has a market value of $300,000.
The journal entry to record the exchange will cause Total Paid-In Capital to:

A) Increase by $ 20,000
B) Increase by $100,000
C) Increase by $180,000
D) Increase by $300,000

Question 58

Maercker Company has 130,000 shares authorized and 10,000 shares issued of $30 par value common stock. On January 1, 2019, the company issues an additional 2,000 shares of common stock in exchange for a building, which has a market value of $900,000.
The journal entry to record the exchange will cause Total Paid-in Capital to:

A) Increase by $ 60,000
B) Increase by $300,000
C) Increase by $540,000
D) Increase by $900,000

Question 59

Use the following information for .
January 1, 2019: Atlantic Corporation reacquires 2,000 shares of its $15 par common stock for $66 per share.
March 5, 2019: Atlantic reissues 1,000 of the above mentioned shares for $75 per share.

-The journal entry to record the January 1, 2019 transaction will be:

A) Investment in Treasury Stock 132,000
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash 132,000
B) Cash 132,000
$\quad$ $\quad$ $\quad$ Treasury Stock 132,000
C) Treasury Stock 132,000
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash 132,000
D) Treasury Stock 30,000
Paid-in-capital, Treasury Stock 102,000
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash 132,000

Question 60

Use the following information for .
January 1, 2019: Atlantic Corporation reacquires 2,000 shares of its $15 par common stock for $66 per share.
March 5, 2019: Atlantic reissues 1,000 of the above mentioned shares for $75 per share.

-The journal entry to record the March 5, 2019 transaction will be:

A) Cash 75,000
$\quad$ $\quad$ $\quad$ Treasury Stock 66,000
$\quad$ $\quad$ $\quad$ Paid-in capital, treasury stock 9,000
B) Cash 75,000
$\quad$ $\quad$ $\quad$ Treasury Stock 66,000
$\quad$ $\quad$ $\quad$ Gain on sale of treasury stock 9,000
C) Cash 75,000
$\quad$ $\quad$ $\quad$ Treasury Stock 15,000
$\quad$ $\quad$ $\quad$ Paid-in capital, treasury stock 60,000
D) Cash 75,000
$\quad$ $\quad$ $\quad$ Treasury Stock 66,000
$\quad$ $\quad$ $\quad$ Investment income on treasury stock 9,000

Question 61

Use the following information for .
January 1, 2019: Pacific Corporation reacquires 2,000 shares of its $20 par common stock for $88 per share.
March 5, 2019: Pacific reissues 1,000 of the above mentioned shares for $100 per share.

-The journal entry to record the January 1, 2019 transaction will be:

A) Investment in Treasury Stock 176,000
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash 176,000
B) Cash 176,000
$\quad$ $\quad$ $\quad$ Treasury Stock 176,000
C) Treasury Stock 176,000
$\quad$ $\quad$ $\quad$ $\quad$ Cash 176,000
D) Treasury Stock 40,000
Paid-in-capital, Treasury Stock 136,000
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash 176,000

Question 62

Use the following information for .
January 1, 2019: Pacific Corporation reacquires 2,000 shares of its $20 par common stock for $88 per share.
March 5, 2019: Pacific reissues 1,000 of the above mentioned shares for $100 per share.

-The journal entry to record the March 5, 2019 transaction will be:

A) Cash 100,000
$\quad$ $\quad$ $\quad$ Treasury Stock 88,000
$\quad$ $\quad$ $\quad$ Paid-in capital, treasury stock 12,000
B) Cash 100,000
$\quad$ $\quad$ $\quad$ Treasury Stock 88,000
$\quad$ $\quad$ $\quad$ Gain on sale of treasury stock 12,000
C) Cash 100,000
$\quad$ $\quad$ $\quad$ Treasury Stock 20,000
$\quad$ $\quad$ $\quad$ Paid-in capital, treasury stock 80,000
D) Cash 100,000
$\quad$ $\quad$ $\quad$ Treasury Stock 88,000
$\quad$ $\quad$ $\quad$ Investment income on treasury stock 12,000

Question 63

Terri Company has never had any treasury stock transactions. On June 1 of the current year, they purchased 100 shares of its common stock (which has a par value of $30) for $15,000. On July 1, they reissued 50 of these shares at $156 per share.
What is the balance in the Paid-in- Capital, Treasury Stock account on July 1?

A) $ 450
B) $ 600
C) $ 300
D) $4,050

Question 64

Finance Company has never had any treasury stock transactions. On June 1 of the current year, they purchased 100 shares of its common stock (which has a par value of $40) for $20,000. On July 1, they reissued 50 of these shares at $208 per share.
What is the balance in the Paid-in- Capital, Treasury Stock account on July 1?

A) $ 600
B) $ 800
C) $ 400
D) $5,400

Question 65

On January 1, 2019, Van Lines Company had 100,000 shares of $12 par-value common stock outstanding. On March 1, 2019, they purchased 2,000 of its outstanding shares for $54 per share. On May 1, 2019, it reissued 1,000 shares at $66 per share.
The journal entry to record the reissuance of the stock on May 1, 2019 would include:

A) Credit Treasury Stock for $108,000
B) Credit Paid-in-Capital, Treasury Stock for $12,000
C) Debit Paid-In Capital, Treasury Stock for $54,000
D) Credit Cash for $66,000

Question 66

On January 1, 2019, Mayflower Company had 100,000 shares of $16 par-value common stock outstanding. On March 1, 2019, they purchased 2,000 of its outstanding shares for $72 per share. On May 1, 2019, it reissued 1,000 shares at $88 per share.
The journal entry to record the reissuance of the stock on May 1, 2019 would include:

A) Credit Treasury Stock for $144,000
B) Credit Paid-in-Capital, Treasury Stock for $16,000
C) Debit Paid-In Capital, Treasury Stock for $72,000
D) Credit Cash for $88,000

Question 67

Island Company purchased 10,000 shares of own its no par value common stock for $21 per share on January 1. On April 1, 2019, they reissued 5,000 of these shares for $27 a share.
The journal entry on April 1, will include a:

A) Debit to Retained Earnings for $135,000
B) Debit to Paid-in-Capital, Treasury Stock for $12,000
C) Credit to Treasury Stock for $105,000
D) Debit to Retained Earnings for $30,000

Question 68

Rhode Island Company purchased 10,000 shares of own its no par value common stock for $28 per share on January 1. On April 1, 2019, they reissued 5,000 of these shares for $36 a share.
The journal entry on April 1, will include a:

A) Debit to Retained Earnings for $180,000
B) Debit to Paid-in-Capital, Treasury Stock for $16,000
C) Credit to Treasury Stock for $140,000
D) Debit to Retained Earnings for $40,000

Question 69

On April 1, 2019, Ruby Corporation reacquired 1,000 shares of its own $30 par stock for a total of $195,000 cash. On October 15, 300 of the treasury shares were reissued at a price of $210 per share.
The journal entry to record the reissuance of the 300 shares of stock on October 15 includes a:

A) Credit to Additional-Paid-In Capital: Treasury Stock of $4,500
B) Credit to Common Stock of $9,000
C) Credit to Gain on Treasury Stock of $4,500
D) Credit to Treasury Stock of $63,000

Question 70

On April 1, 2019, Crystal Corporation reacquired 1,000 shares of its own $40 par stock for a total of $260,000 cash. On October 15, 300 of the treasury shares were reissued at a price of $280 per share.
The journal entry to record the reissuance of the 300 shares of stock on October 15 includes a:

A) Credit to Additional-Paid-In Capital: Treasury Stock of $6,000
B) Credit to Common Stock of $12,000
C) Credit to Gain on Treasury Stock of $6,000
D) Credit to Treasury Stock of $84,000

Question 71

Twin Company has 200,000 shares authorized, 150,000 shares issued, and 25,000 shares of Treasury stock on January 1, 2019. On March 1, they declared a 15% stock dividend. The company then declared a $0.70 per share cash dividend.
What is the amount of dividends payable?

A) $100,625
B) $120,750
C) $105,000
D) $ 87,500

Question 72

Navarro Company has 200,000 shares authorized, 150,000 shares issued, and 25,000 shares of Treasury stock on January 1, 2019. On March 1, they declared a 15% stock dividend. The company then declared a $2.10 per share cash dividend.
What is the amount of dividends payable?

A) $301,875
B) $362,250
C) $262,500
D) $315,000

Question 73

McGrath Company has 1,000 shares of $100 par value, 5% cumulative preferred stock and 50,000 shares of $20 par value common stock outstanding. The company paid total cash dividends of $2,000 in its first year of operation, and declared total cash dividends of $10,000 in its second year of operation.
The cash dividend paid to common stockholders in the second year will be:

A) $7,000
B) $2,000
C) $4,500
D) $4,300

Question 74

Lauer Company has 1,000 shares of $300 par value, 5% cumulative preferred stock and 50,000 shares of $60 par value common stock outstanding. The company paid total cash dividends of $6,000 in its first year of operation, and declared total cash dividends of $30,000 in its second year of operation.
The cash dividend paid to common stockholders in the second year will be:

A) $21,000
B) $ 6,000
C) $13,500
D) $13,950

Question 75

Amin Company has 200,000 shares of $20 par value common stock outstanding. On April 15, 2019 the company declared a 40% stock dividend. The current market value of the stock was $30 per common share.
The journal entry on April 15 will include:

A) A credit to Stock Dividends Distributable for $2,400,000
B) A debit to Retained Earnings for $2,400,000
C) A credit to Stock Dividend Distributable for $1,600,000
D) A credit to Paid-in Capital in excess of par value, Common Stock for $800,000

Question 76

Sayali Company has 200,000 shares of $60 par value common stock outstanding. On April 15, 2019 the company declared a 40% stock dividend. The current market value of the stock was $90 per common share.
The journal entry on April 15 will include:

A) A credit to Stock Dividends Distributable for $7,200,000
B) A debit to Retained Earnings for $7,200,000
C) A credit to Stock Dividend Distributable for $4,800,000
D) A credit to Paid-in Capital in excess of par value, Common Stock for $2,400,000

Question 77

John, Inc. has 5,000 shares of 6%, $200 par value, cumulative preferred stock and 100,000 shares of $2 par value common stock outstanding. There were no dividends declared in 2018. The board of directors declared and paid dividends of $100,000 each in 2019 and 2020.
What is the amount of dividends received by the common stockholders in 2020?

A) $20,000
B) $40,000
C) $60,000
D) $80,000

Question 78

Karin, Inc. has 5,000 shares of 6%, $600 par value, cumulative preferred stock and 100,000 shares of $6 par value common stock outstanding. There were no dividends declared in 2018. The board of directors declared and paid dividends of $300,000 each in 2019 and 2020.
What is the amount of dividends received by the common stockholders in 2020?

A) $ 60,000
B) $120,000
C) $180,000
D) $240,000

Question 79

Superior Company had 50,000 shares of $50 par value common stock outstanding on June 30, 2019. On July 1, the board of directors declared a 10% stock dividend when the market value of each share was $54
The journal entry on July 1 will include:

A) A credit to Stock Dividend Distributable for $250,000
B) A debit to Retained Earnings for $250,000
C) A credit to Stock Dividend Distributable for $270,000
D) A credit to Paid-in capital in excess of par value $270,000

Question 80

Balenberg Company had 50,000 shares of $150 par value common stock outstanding on June 30, 2019. On July 1, the board of directors declared a 10% stock dividend when the market value of each share was $162.
The journal entry on July 1 will include:

A) A credit to Stock Dividend Distributable for $750,000
B) A debit to Retained Earnings for $750,000
C) A credit to Stock Dividend Distributable for $810,000
D) A credit to Paid-in capital in excess of par value $810,000.