1- The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10...
1-
The following data has been collected about Keller Company's stockholders' equity accounts:
| Common stock $10 par
value 20,000 shares authorized and 10,000 shares issued, 9,000 shares outstanding |
$100,000 |
| Paid-in capital in excess of par value, common stock | 50,000 |
| Retained earnings | 25,000 |
| Treasury stock | 11,500 |
Assuming the treasury shares were all purchased at the same price,
the cost per share of the treasury stock is:
Multiple Choice
$1.15.
$1.28.
$11.50.
$10.50.
$10.00.
2- Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be:
Multiple Choice
Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value, Common Stock $286,000.
Debit Cash for $312,000; credit Common Stock $312,000
Debit Common Stock $26,000; debit Paid-in Capital in Excess of Par Value, Common Stock $286,000; credit Cash $312,000.
Debit Cash $312,000; credit Stock Liability $286,000; credit Common Stock $26,000.
Debit Common Stock $26,000; credit Cash $26,000.
3- Fargo Company's outstanding stock consists of 400 shares of
noncumulative 5% preferred stock with a $10 par value and 3,000
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 | $ | 20,000 |
| year 2 | $ | 6,000 |
| year 3 | $ | 32,000 |
The amount of dividends paid to preferred and common shareholders in year 1 is:
Multiple Choice
$200 preferred; $19,800 common.
$4,000 preferred; $16,000 common.
$17,000 preferred; $3,000 common.
$10,000 preferred; $10,000 common.
$20,000 preferred; $0 common.
4- A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:
Multiple Choice
Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000.
Debit Cash $50,000; credit Common Stock $50,000.
Debit Common Stock $50,000; credit Cash $50,000.
Debit Treasury Stock $50,000; credit Cash $50,000.
Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value, Common Stock $5,000; credit Common Stock $45,000.
5- West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:
Multiple Choice
Debit Retained Earnings $90,000; credit Common Dividends Payable $90,000.
Debit Common Dividends Payable $95,000; credit Cash $95,000.
Debit Retained Earnings $5,000; credit Common Dividends Payable $5,000.
Debit Common Dividends Payable $90,000; credit Cash $90,000.
Debit Retained Earnings $95,000; credit Common Dividends Payable $95,000.
6- All of the following regarding accounting for Treasury Stock under U.S. GAAP and IFRS is true except:
Multiple Choice
U. S. GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock.
Only gains are recognized on retirements of treasury stock under IFRS.
IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock.
Gains are not recognized on retirements of treasury stock under U. S. GAAP.
A company's assets and equity are always reduced by the amount paid for the retiring stock.
7- A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:
Multiple Choice
Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000.
Debit Cash $27,500; credit Common Stock $27,500.
Debit Common Stock $27,500; credit Cash $27,500.
Debit Treasury Stock $27,500; credit Cash $27,500.
Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500.
8- A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the declaration of the cash dividend is:
Multiple Choice
Debit Dividend Expense $12,000; credit Cash $12,000.
Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000.
Debit Common Dividend Payable $12,000; credit Cash $12,000.
Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000.
Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000.
9- The statement of changes in stockholders' equity:
Multiple Choice
Is part of the statement of retained earnings.
Shows only the ending balances in stockholders' equity.
Describes changes in paid-in capital and retained earnings subcategories.
Does not include changes in treasury stock.
Is reported by very few companies.
10- A liability for dividends exists:
Multiple Choice
When cumulative preferred stock is sold.
On the date of declaration.
On the date of record.
On the date of payment.
For dividends in arrears on cumulative preferred stock.
.
Homework Answers
Solution 1:
Nos of shares in treasury stock = 1000 shares
Cost of treasury stock = $11,500
Cost per share of treasury stock = $11,500 / 1000 = $11.50 per share
Hence 3rd option is correct.
Solution 2:
The entry to record this transaction would be "Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value, Common Stock $286,000."
Hence first option is correct.
Solution 3:
The amount of dividends paid to preferred shareholder in year 1 = 400*$10*5% = $200
Dividend to common shareholders = $20,000 - $200 = $19,800
Hence first option is correct.
Solution 4:
The entry to record this transaction would be "Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000."
Hence first option is correct.
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1-
The following data has been collected about Keller Company's
stockholders' equity accounts:
Common stock $10...
The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par...
The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 28,000 shares authorized and 14,000 shares issued, 1, 800 shares outstanding Paid-in capital in excess of par value, common stock Retained earnings Treasury stock $140,000 58,000 33,000 22, 140 Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is: Multiple Choice 0 33,000. 0 140,000 0 28,000. 0 12,200. 0 58,000.
The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par...
The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 24,000 shares authorized and 12,000 shares issued, 1,400 shares outstanding $120,000 Paid-in capital in excess of par value, common stock 54,000 Retained earnings 29,000 Treasury stock 16,660 Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:
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The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 28,000 shares authorized and 14,000 shares issued, 1, 800 shares outstanding Paid-in capital in excess of par value, common stock Retained earnings Treasury stock $140,000 58,000 33,000 22, 140 Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is: Multiple Choice 0 33,000. 0 140,000 0 28,000. 0 12,200. 0 58,000.
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The stockholders’ equity accounts of Ayayai Corp. on January 1,
2022, were as follows.
Preferred Stock (7%, $100 par noncumulative, 12,000 shares
authorized)
$720,000
Common Stock ($4 stated value, 720,000 shares authorized)
2,400,000
Paid-in Capital in Excess of Par Value—Preferred Stock
36,000
Paid-in Capital in Excess of Stated Value—Common Stock
1,152,000
Retained Earnings
1,651,200
Treasury Stock (12,000 common shares)
96,000
During 2022, the corporation had the following transactions and
events pertaining to its stockholders’ equity.
Feb.
1
Issued 12,000 shares...
The stockholders' equity accounts of Culver Corporation on January 1, 2017, were as follows. Preferred Stock (6%, $100 par noncumulative, 4,850 shares authorized) Common Stock ($3 stated value, 316,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (4,850 common shares) $291,000 790,000 14,550 505,600 694,500 38,800 During 2017, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 4,700 shares...
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The stockholders’ equity accounts of Marigold Corp. on January
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Preferred Stock (8%, $100 par noncumulative, 4,700 shares
authorized)
$282,000
Common Stock ($4 stated value, 325,000 shares authorized)
1,083,333
Paid-in Capital in Excess of Par Value—Preferred Stock
14,100
Paid-in Capital in Excess of Stated Value—Common Stock
520,000
Retained Earnings
701,000
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Issued 5,150 shares...
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