Question

QUESTION 1 The stock has a par of $5. I sold 100 shares for $750. I sold 10000 shares for land worth $60000 sold 100 shares for $500 Debit and 60000 Credit common stock S500 Credit padin capital in excess of par 10000 a Equipment 600 Common stock 600 Sold 100 shares for $750 Gave 10000 shares for land worth $60000 sold 100 shares for $500 Cashop Common stock 500 Debit Cash $750 Credit common stock Credit pand in capital e s par Cash 750 Common Stock 750 QUESTION 2 Check two disadvantages of corporations Tax treatment Government regulation Its a separate legal entity lack of mutual agency, it does NOT have united by QUESTION 3 The following totals for the month of me were to be payroll of Arces Com Salaries expense Social security and Medicare taxes withheld Income taxes withheld $14,000 1 OSO 1000 The entry to record de payment of net pay would include O a credit to salaries payable for 350 Ob debutto salaries payable for 59,330 O certo salaries expense 19,350 Od debit to sales payable for $14,000

Answer 1

Q1.
Sold Shares for $750
Answer is d. Debit Cash $750, Credit Common Stock $500, Credit Paid in capital in excess of par $250

Gave 10000 shares for land worth $60000
Answer is a.

Sold 100 shares for $500
Answer is c.

Par value per share is credited to common stock and any excess to paid in capital in excess of par

Q2.
Answer is Tax Treatment and Government regulations
There is double taxation in case of corporations, as shareholders have to pay tax again on dividends
There are many state and federal government regulations which are tough to follow

Q3.
Answer is b. Debit to salaries payable $9350
i.e. $14000 - 1050 - 2600 - 1000