Question

work is not needed

Question 37 2 pts Osbourne, Inc. issued 60,000 shares of common stock in exchange for manufacturing equipment. The equipment has a fair value of $1,420,000. The stock has a par value of $0.05 per share. The journal entry to record this transaction includes a O credit to Gain on Sale of Common Stock for $1,480,000 O credit to Common Stock-$0.05 Par Value for $1,420,000 O credit to Paid-In Capital in Excess of Par-Common for $1,417,000 O debit to Cash for $14,170,000

Answer 1

Solution 37:

The journal entry to record purchase of equipment would include "Credit to paid in capital in excess of par - common for $1,417,000"

Hence 3rd option is correct.

Solution 38:

Computation of cumulative cash flows
Year	Cash Flows	Cumulative cash flows
1	$204,000.00	$204,000.00
2	$204,000.00	$408,000.00
3	$266,000.00	$674,000.00
4	$266,000.00	$940,000.00
5	$150,000.00	$1,090,000.00

Payback period = 3 years + ($730,000 - $674,000) / $266,000 = 3.21 years

Hence 3rd option is correct.

Solution 39:

Cost incurred and expensed during the accounting period are period costs.

Hence last option is correct.

Solution 41:

Cash collection budget for june = Cash sale for june + Collection of credit sale of may

= ($180,000*50%) + ($225,000*50%) = $202,500

Hence first option is correct.