Question

increased by the Yes No No Yes Module 15: Stockholders' Equity 603 13. At December 31. year 1. Rama Corp. had 20,000 shares are exercised, Blue's total stockholders' equity is Si par value treasury stock that had been acquired in e at $12 per share. In May year 2, Rama issued 15,000 of these Cash received upon Carrying amount treasury shares at SIO per share. The cost method is used to of warrants exercise of the warrants record treasury stock transactions. Rama is located in a se Yes where laws relating to acquisition of treasury stock restrict the availability of retained camings for declaration of dividends At December 31, year 2, what amount should Rama show in protes to financial statements as a restriction of retained No earnings as a result of its treasury stock transactions? a. $5,000 Stock Subscriptions b. $10,000 c. $60,000 10. When collectibility is reasonably assured the excess d. $90,000 the subscription price over the stated value of the no par 14. United, Inc.'s unadjusted current assets section and Cemon stock subscribed should be recorded as stockholders' equity section of its December 31. year! No par common stock balance sheet are as follows: h Additional paid-in capital when the subscription is recorded Current asset c. Additional paid in capital when the subscription is Cash $ 60,000 to collected. d. Additional paid-in capital when the common stock is Investments in trading securities issued. (including $300,000 of United, Inc. 400.000 IL On December 1 year I shares of authorized common common stock) Block were issued on a subscription basis at a price in excess Trade accounts receivable of par value. A total of 20% of the subscription price of each 148,000 Inventories Sare was collected as a down payment on December 1 year with the remaining 80% of the subscription price of cach Total $948.000 are due in year 2. Collectibility was reasonably assured. At December 31, year I, the stockholders' equity section of the lihce theet would report additional paid-in capital for the $2,234.000 Common stock cess of the subscription price over the par value of the shares of common stock subscnbed and Retained earnings (deficit) 224.000 2. Common stock issued for 20% of the par value of the Total $2.000.000 shares of common stock subscribed b. Common stock issued for the par value of the shares 'The investments and inventories are reported at their costs. of common stock subscribed which approximate market values. In its year 1 statement c. Common stock subscribed for 80 of the par value of of stockholders' equity, United's total amount of equity at the shares of common stock subscribed. December 31. year 1, is d. Comenon stock subscribed for the par value of the a $2.224.000 shares of common stock subscribed b $2.000,00 c. $1,924,000 D. Treasury Stock Transactions d. $1.700.000 12. In year 1. Seda Corp. acquired 6000 shares of its $1 par 1 5. Cyan Corp.issued 20,000 shares of $5 par common value common stock a $36 per share. During year 2. Seda stock at $10 per share On December 31. year 1. Cyan's issued 3,000 of these shares at S50 per share. Seda uses the retained earnings were $300,000. In March year 2, Cyan cost method to account for its treasury stock transactions reacquired 5.000 shares of its common stock at S20 per share. What accounts and amounts should Seda credit in year 2 to In June year 2, Cyan sold 1,000 of these shares to its corporate rocord the issuance of the 3,000 shares? officers for $25 per share. Cyan uses the cost method to record Treasury Additional treasury stock. Net income for the year ended December 31. Retained Common stock pald-in capital year 2, was $60,000. At December 31, year 2, what amount earning stock should Cyan report as retained earnings? $102,000 $12.000 $6.000 a $360,000 $164 $6.000 bS165.00 C SION e $375,00 ) 542.000 d. S380.000 STOK 000 $42.000 Stockholderyewitt holders

10,11,12

Answer 1

10. b) Additional paid-in capital when subscription is recorded

11. a) Common stock issued for 20% of the par value of the shares of common stock subscribed.

12. c) Treasury stock $108,000; Additional paid-in capital $42,000

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