Question : 21) Dolly’s Best issued 200 shares of its $10 common : 1171126

 

21) Dolly’s Best issued 200 shares of its $10 common stock in exchange for used packaging equipment with a fair market value of $2,400. The entry to record the acquisition of the equipment would include a:

A) debit to Equipment for $2,000.

B) credit to Paid-in Capital in Excess of Par Value-Common for $400.

C) credit to Common Stock for $2,400.

D) credit to Equipment for $2,400.

22) When a company sells stock at an amount less then par value, the amount is referred to as:

A) a discount.

B) a premium.

C) a bonus.

D) Companies cannot sell stock for more than par value.

23) If stock shares are sold at more than their par value, the excess money is called:

A) earnings.

B) paid-in capital in excess of par value.

C) gain on issue of stock.

D) discount on issue of stock.

24) ABC sells 400 shares of its $20 par common stock for $25. The entry would entail a credit(s) of:

A) Cash of $10,000.

B) Paid-in Capital in Excess of Par Value-Common for $8,000; Common Stock for $2,000.

C) Paid-in Capital in Excess of Par Value-Common for $2,000; Common Stock for $8,000.

D) Common Stock for $10,000.

25) The sale of common stock above par was recorded by crediting Common Stock for the total amount. This error would cause:

A) the period end stockholders’ equity to be overstated.

B) the period end stockholders’ equity to be understated.

C) no effect on total stockholders’ equity.

D) None of these is correct.

26) The sale of common stock was recorded as a sale of preferred stock. This error would cause:

A) the period end stockholders’ equity to be overstated.

B) the period end stockholders’ equity to be understated.

C) no effect on total stockholders’ equity.

D) None of these is correct.

27) Rhubarb Corporation’s outstanding stock is 100 shares of $100, 11% cumulative nonparticipating preferred stock and 2,000 shares of $12 par value common stock. Rhubarb paid $2,200 cash dividends during the year. Common stockholders received:

A) $0.

B) $500.

C) $2,500.

D) $1,100.

28) Antiques.com Corporation’s outstanding stock is 75 shares of $60, 8% cumulative nonparticipating preferred stock and 2,000 shares of $10 par value common stock. Antiques paid $2,760 cash dividends during the year. Common stockholders received:

A) $2,400.

B) $360.

C) $2,040.

D) $0.

29) Custer.com Company’s outstanding stock is 100 shares of $100, 5% cumulative nonparticipating preferred stock and 1,000 shares of $10 par value common stock. Custer paid $2,300 cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received:

A) $0.

B) $800.

C) $1,300.

D) $500.

30) Alpha Corporation’s has 1,500 shares of $40 par, 7% cumulative preferred stock and 2,200 shares of $10 par common stock. Alpha paid $12,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders will receive:

A) $0.

B) $7,800.

C) $1,600.

D) $3,600.

 

 

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