Question : 18.4   Learning Objective 18-4 1) The journal entry for the receipt : 1171117

18.4   Learning Objective 18-4

1) The journal entry for the receipt of a cash payment on common stock subscriptions would include:

A) debiting Subscriptions Receivable—Common Stock; crediting Common Stock.

B) debiting Common Stock; crediting Subscriptions Receivable—Common Stock.

C) debiting Cash; crediting Subscriptions Receivable—Common Stock.

D) debiting Cash; crediting Common Stock Subscribed.

2) The Bean Counter Corporation received subscriptions for 100 shares of its $12 par value common stock at $15 per share. The entry to record receipt of the subscriptions would include a:

A) debit to Cash $1,500 and a credit to Common Stock $1,500.

B) debit to Cash $1,500; a credit to Common Stock $1,200; and a credit to Paid-in Capital in Excess of Par Value—Common $300.

C) debit to Common Stock Subscribed $1,500 and a credit to Subscriptions Receivable-Common Stock $1,500.

D) debit to Subscriptions Receivable—Common Stock $1,500; a credit to Common Stock Subscribed $1,200; and a credit to Paid-in Capital in Excess of Par Value—Common for $300.

3) Diamonds Forever Corporation received subscriptions for 100 shares of its $100 par value common stock for $120 per share. The entry to record the receipt of the subscriptions would include a:

A) debit to Common Stock Subscribed for $10,000.

B) debit to Subscriptions Receivable-Common Stock for $10,000.

C) credit to Paid-in Capital in Excess of Par Value—Common for $2,000.

D) credit to Common Stock to be Outstanding $12,000.

4) Tory Company received the first installment of $2,000 on a common stock subscription. The entry to record the collection would include a:

A) debit to Subscriptions Receivable—Common Stock for $2,000.

B) credit to Common Stock Subscribed for $2,000.

C) credit to Common Stock for $2,000.

D) credit to Subscriptions Receivable—Common Stock for $2,000.

5) Nature’s Honey Corporation received the final installment of $1,000 on a stock subscription for 20 shares of $100 par value common stock. After recording the cash receipt, the entry to issue the stock would include a:

A) debit to Paid-in Capital in Excess of Par Value—Common for $2,000.

B) credit to Paid-in Capital in Excess of Par Value—Common for $2,000.

C) debit to Common Stock for $2,000.

D) debit to Common Stock Subscribed for $2,000.

6) Monarch Company reported Subscriptions Receivable-Common Stock of $1,500 and Common Stock Subscribed of $3,200 on its balance sheet. All the following are true except:

A) the amount previously collected on the stock subscriptions is $1,700.

B) the original stock subscribed totaled $3,200.

C) Monarch previously issued $1,700 of the subscribed stock.

D) the remaining amount to be collected from subscribers before the shares will be issued is $1,500.

7) What is the entry to record subscriptions received for 1,700 shares of $100 par value common stock at $130 per share?

A) Debit Common Stock Subscribed $221,000; credit Cash $221,000

B) Debit Subscriptions Receivable-Common Stock $221,000; credit Common Stock Subscribed $170,000; credit Paid-in Capital in Excess of Par Value—Common $51,000.

C) Debit Subscriptions Receivable—Common Stock $221,000; credit Common Stock Subscribed $221,000

D) None of these answers is correct.

8) Common Stock Subscribed is:

A) shown as an equity account below Issued Common Stock.

B) a contra-asset account.

C) a receivables account.

D) shown on the income statement as a revenue.

9) In the stockholders’ equity section of a balance sheet:

A) common stock is listed before preferred stock.

B) common stock is listed after preferred stock.

C) common stock is listed after retained earnings.

D) common stock is not listed.

10) When a stock subscription is received, Common Stock subscribed is debited for the total par value of the stock.