Question : 191. If 10,000 stock warrants issued to the general public for : 1230400

191. If 10,000 stock warrants are issued to the general public for $10,000, and later those warrants and $150,000 are exchanged for 10,000 shares of no-par stock, the entry to record the exercise of the warrants would be: 
A. Cash                                                    150,000
Common Stock Warrants                     10,000
      Common Stock                                                       160,000
B. Cash                                                    150,000
 Common Stock                                                       140,000
      Common Stock Warrants                                         10,000
C. Cash                                                    150,000
Common Stock Warrants                     10,000
 Common Stock                                                       150,000
      Add’l Paid-in Capital-Stock Warrants                      10,000
D. Cash                                                   150,000
   Warrant Stock                                                           150,000
E. Cash                                                    150,000
Common Stock Warrants                      10,000
 Warrant Stock                                                        150,000
      Add’l Paid-in Capital-Stock Warrants                     10,000

192. A firm issues convertible bonds that pay 8% interest and receives $100,000. The firm could have issued nonconvertible bonds that pay 8% interest but would have received only $80,000 in bond proceeds. What journal entry is necessary under GAAP to record the issuance of the convertible bonds? 
A. Cash                                     100,000
 Convertible Bonds Payable                80,000
      Additional Paid-in Capital                  20,000
B. Cash                                     100,000
 Convertible Bonds Payable                80,000
      Convertible Bond income                   20,000
C. Cash                                     100,000
      Convertible Bonds Payable              100,000
D. Convertible Bonds Payable 100,000
      Cash                                                  100,000
E. No entry is required

193. In what way are stock rights generally different from stock warrants? 
A. Stock rights are generally granted to current shareholders only.
B. Stock rights are non-transferable.
C. Stock warrants are only issued with bonds.
D. Stock warrants are only issued with preferred stocks.
E. Rights and warrants differ in no way; they convey the same rights

194. If the accountant cannot objectively measure the value of the stock warrants separately from the value of the bond or preferred stock at date of issuance, the accountant credits 
A. the full purchase price to the bond or preferred stock and none of the price to the common stock warrant
B. 95 percent of the purchase price to the bond or preferred stock and 5 percent of the price to the common stock warrant
C. 90 percent of the purchase price to the bond or preferred stock and 10 percent of the price to the common stock warrant
D. 85 percent of the purchase price to the bond or preferred stock and 15 percent of the price to the common stock warrant
E. 80 percent of the purchase price to the bond or preferred stock and 20 percent of the price to the common stock warrant

195. Treasury stock can be defined as 
A. unissued stock, that is shares that have never been sold by the corporation
B. designated stock, that is shares used for the specific purpose of converting preferred stock to common stock
C. investment stock, that is shares acquired from a subsidiary company
D. reacquired stock, that is outstanding shares purchased on the open market by the issuing corporation
E. reacquired stock, that is outstanding shares purchased on the open market by the Treasury.

196. A firm owns 1,000 treasury shares which it acquired for $15 per share (par value $1). The firm sells 500 of the treasury shares for $20 per share. Using the cost method, what is the entry to record the sale of the treasury stock using the cost method? 
A. Cash                                                 10,000
      Common Stock-Treasury Shares                  10,000
B. Cash                                                 10,000
 Common Stock-Treasury Shares                    7,500
 Add’l Paid-in Capital-Treasury Stock            2,500
C. Cash                                                 10,000
 Common Stock-Treasury Shares                      500
 Add’l Paid-in Capital-Treasury Stock            9,500
D. Cash                                                 10,000
 Common Stock-Par                          1,000
      Common Stock-Treasury Shares                 11,000
E. Common Stock-Treasury Shares     11,000
      Cash                                                             10,000
      Common Stock-Par                                       1,000

197. (CMA adapted, Jun 87 #4) The major segments of the statement of retained earnings for a period are 
A. dividends declared, prior period adjustments, and changes due to treasury stock transactions
B. prior period adjustments, before tax income or loss, income tax, and dividends paid
C. net income or loss from operations, dividends paid, and extraordinary gains and losses
D. net income or loss, prior period adjustments, and dividends paid and/or declared
E. net income or loss, prior period adjustments, and dividends paid and/or declared, and changes due to treasury stock transactions

198. Firms may periodically distribute net assets generated by earnings to shareholders as a dividend. Firms 
A. increase net assets and decrease retained earnings.
B. increase net assets and retained earnings.
C. reduce net assets and retained earnings.
D. reduce net assets and increase retained earnings.
E. reduce net assets and increase shareholders’ equity.

199. A firm must pay all current and previously postponed preferred dividends before it can pay any dividends on common shares, thus the preferred shares have the feature called 
A. convertible dividend rights
B. noncumulative dividend rights
C. cumulative dividend rights
D. callable dividend rights
E. participating dividend rights

200. If the firm becomes insolvent, in order to settle debts creditors can claim 
A. the assets of the corporate entity.
B. the owners’ business and personal assets of partnerships.     
C. the owner’s business and personal assets of sole-proprietorships.
D. all of the above.
E. none of the above.