Question :
11) Green Corporation purchases 40,000 shares of its own $10 : 1230044
11) Green Corporation purchases 40,000 shares of its own $10 par value common stock for $25 per share. What will be the effect on stockholders’ equity?
A) Increase $400,000
B) Increase $1,000,000
C) Decrease $400,000
D) Decrease $1,000,000
12) If treasury stock is sold at a price greater than its reacquisition costs, the difference is:
A) debited to Paid-in Capital from Treasury Stock.
B) credited to Paid-in Capital from Treasury Stock.
C) debited to Retained Earnings.
D) credited to Retained Earnings.
13) ABC Corporation purchases 40,000 shares of its own $10 par value common stock for $25 per share. What will be the effect on stockholders’ equity?
A) Increase $400,000
B) Decrease $400,000
C) Increase $1,000.000
D) Decrease $1,000,000
14) Treasury stock has a:
A) debit balance, the opposite of other equity accounts.
B) credit balance, the same as other equity accounts.
C) credit balance, the opposite of other equity accounts.
D) debit balance, the same as other equity accounts.
15) Liberty Corporation has the following information as of December 31, 2012:
Common Stock, $10 par value (authorized 20,000 shares)
$70,000
Treasury Stock (2,000 shares)
$30,000
Based on the information above, how many shares of common stock are outstanding?
A) 20,000.
B) 7,000.
C) 5,000.
D) 2,000.
16) Liberty Corporation has the following information as of December 31, 2012:
Common Stock, $10 par value (authorized 20,000 shares)
$70,000
Treasury Stock (2,000 shares)
$30,000
Based on the information above, how many shares of common stock have been issued?
A) 20,000.
B) 7,000.
C) 5,000.
D) 2,000.
17) Nelson Corporation has $1 par value Common Stock and has 100,000 shares authorized and 25,000 shares issued. The entry to record Nelson’s purchase of 5,000 shares of common stock at $5 per share would include a:
A) debit to Treasury Stock for $25,000.
B) credit to Common Stock $25,000.
C) credit to Paid-in Capital in Excess of Par Value — Common Stock for $20,000.
D) debit to Common Stock $5,000.
18) Robertson Corporation incorporated on January 2, 2012. During 2012 Robertson had the following transactions:
•issued 30,000 shares of common stock at $25 per share
•purchased 2,000 shares of treasury stock at $28 per share
•had net income of $400,000.
What is the total amount of stockholders’ equity as of December 31, 2012?
A) $750,000
B) $400,000
C) $1,094,000
D) $1,206,000
19) Travis Corporation issued 20,000 shares of common stock. Travis purchased 2,000 shares and later reissued 1,000 shares. How many shares are issued and outstanding?
A) 18,000 issued and 18,000 outstanding
B) 20,000 issued and 18,000 outstanding
C) 19,000 issued and 19,000 outstanding
D) 20,000 issued and 19,000 outstanding
20) A retirement of common stock:
A) decreases the number of shares of common stock issued.
B) decreases the number of shares of common stock issued and reduces the balance in the common stock account.
C) produces a gain or loss reported on the income statement.
D) reduces the balance in the Common Stock account.
21) On February 3, 2012 Granger Corporation acquired 4,000 shares of its own $1 par value common stock for $30 per share. On May 24, 2012, 1,500 shares of the treasury stock were sold for $35 per share.
Prepare the journal entries to record the purchase and sale of the treasury stock.
22) On February 2nd of the current year, Bradley’s Video Games, Inc. reacquired 5,000 shares of its $10 par value common stock at $50 per share. On February 23rd, Bradley’s Video Games, Inc. sold 1,000 of the reacquired shares at $65 per share. On February 27th, the remaining 4,000 shares were sold at $40 per share.
Required:
1.Prepare the journal entries necessary to record these transactions.
2.What is the balance in the treasury stock account on February 28th?
