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quiz 12 ch13 key - by Wanchai Corporation affect each of...

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Quiz 12 (Ch 13) Key 1. Treasury stock was acquired at a price in excess of its par value. The treasury stock was subsequently reissued at a price in excess of its acquisition price. Assuming that the cost method of accounting for treasury stock transactions is used, what is the effect on retained earnings ? Acquisition of Reissuance of Treasury Stock Treasury Stock 1. No effect Increase 2. Decrease No effect 3. No effect No effect 4. Increase Decrease 2. When treasury stock is purchased for more than its par value, Treasury Stock is debited for the purchase price under which of the following methods? Cost Method Par Value Method 1. No No 2. No Yes 3. Yes No 4. Yes Yes 3. How would the declaration of a 10 percent stock dividend
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Unformatted text preview: by Wanchai Corporation affect each of the following accounts on its balance sheet? Retained Total Stock-Earnings holders' Equity 1. Decrease Decrease 2. Decrease No effect 3. No effect Decrease 4. No effect No effect 4. Common stock warrants outstanding should be classified as 1. liabilities. 2. reductions of capital contributed in excess of par value. 3. contra stockholders’ equity. 4. additions to contributed capital. 5. Which of the following statement is not correct for the effects of stock splits ? 1. The par value decreases. 2. The retained earnings decrease. 3. The number of shares outstanding increases. 4. The total stockholders’ equity remains the same....
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