Question : 121.The purchase of treasury stock for cash will have which : 1237456

 

121.The purchase of treasury stock for cash will have which effect upon the following items?     

A. Option A

 

B. Option B

 

C. Option C

 

D. Option D

 

 

 

 

122.Which of the following does not appear in a corporate income statement?   

A. Gains and losses from treasury stock transactions.

 

B. Income tax expense.

 

C. The income or loss from a segment of the business that has been discontinued during the current year.

 

D. Gains and losses not expected to recur in the foreseeable future.

 

 

 

 

123.When treasury stock is reissued at a price above cost:   

A. The corporation recognizes a gain to be recorded on the income statement.

 

B. Total paid-in capital is increased.

 

C. The re-issuance is treated as an extraordinary item in the corporation’s income statement.

 

D. Retained earnings is increased.

 

 

 

 

124.The following two items are disclosed in the stockholders’ equity section of Riverside Corporation’s December 31, 2015, balance sheet:  If the company had reacquired 700 shares of treasury stock in February of 2015, then for what amount was the other treasury stock sold for during 2015?   

A. $2 per share above its par value.

 

B. $2 per share.

 

C. $2 per share above its cost.

 

D. $22 per share above its cost.

$1,000/(700 – 200) = $2

 

 

 

On April 1, 2015, Jetter Corporation reacquired 2,000 shares of its own $10 par stock for $120,000 cash. On October 15, 2015, 600 of the treasury shares were reissued at a price of $65 per share.

 

125.Refer to the information above. The reacquisition of the 2,000 shares on April 1, 2015, causes:   

A. No change in total assets of Jetter Corporation.

 

B. No change in the number of shares of Jetter Corporation stock outstanding.

 

C. A reduction in total assets and in total stockholders’ equity of Jetter Corporation.

 

D. Jetter Corporation to show a new asset, “Treasury Stock”, for $120,000.

 

 

 

 

126.Refer to the information above. The journal entry to record the reissuance of the 600 shares of stock on October 15 includes a:   

A. Credit to Common Stock of $6,000.

 

B. Credit to Additional Paid-In Capital: Treasury Stock Transactions of $3,000.

 

C. Credit to Gain on Treasury Stock Transactions of $3,000.

 

D. Credit to Treasury Stock Reissued of $39,000.

(600 × $65) – (600 × $60) = $3,000

 

 

 

127.Refer to the information above. Assuming there are no further transactions involving treasury stock in 2015, the financial statements of Jetter Corporation for 2015 will show:   

A. Treasury Stock of $81,000 among the assets in the balance sheet.

 

B. Gain on Sale of Treasury Stock of $3,000 in the income statement for 2015.

 

C. Treasury Stock of $120,000 as a deduction in the stockholders’ equity section of the December 31, 2015, balance sheet.

 

D. Additional Paid-In Capital: Treasury Stock Transactions of $3,000 in the December 31, 2015 balance sheet.

 

 

 

 

128.On April 16, 2015, Rodriguez Corporation reacquired 12,000 shares of its own $10 par stock for $660,000 cash. On November 4, 2016, 1,000 of the treasury shares were reissued at a price of $65 per share. The journal entry to record the reissuance of the 1,000 shares of stock on November 4 includes a:   

A. Credit to Common Stock of $10,000.

 

B. Credit to Additional Paid-In Capital: Treasury Stock Transactions of $10,000.

 

C. Credit to Gain on Treasury Stock Transactions of $10,000.

 

D. Credit to Treasury Stock Reissued of $65,000.

(1,000 × $65) – (1,000 × $55) = $10,000