Chapter 15 Quiz Solutions - share On they reacquired 200...

Name: ___________________________________________
ACCT 304 - Fall 2009 – Chapter 15 Quiz
Instructions: Please show all work. Please write your answer CLEARLY.
1.
(4 points) Parker Corporation issued 2,000 shares of common stock and 400 shares of preferred stock
for a lump sum of $72,000 cash. The par value of the common stock was $5 and the market value was $30.
The par value of the preferred stock was $40 and the market value was $50. Give the correct entry to record
the issuance of this lump sum sale.
Common Stock: 2000 shares x $30 = $60,000 6/8 x $72,000 = $54,000 allocated to CS
Preferred Stock: 400 shares x $50 = $20,000 2/8 x $72,000 = $18,000 allocated to PS
Total Market Value: $80,000
Dr. Cash $72,000
Cr. Common Stock @ par (2000 x $5) $10,000
Cr. Additional PIC – CS ($54,000-$10,000) $44,000
Cr. Preferred Stock @ par (400 x $40) $16,000
Cr. Additional PIC – CS ($18,000-$16,000) $2,000
2.
(4 points) On January 1, 2009, Lane Company issued 1,000 shares of $1 par common stock for $20 per