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I2 Ch. 16 Quiz--Final Update Summer 2010

I2 Ch. 16 Quiz--Final Update Summer 2010 - INTERMEDIATE...

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INTERMEDIATE ACCOUNTING II--Chapter 16 Practice Quiz Select the ONE best answer to each of the following multiple choice questions. 1. In 20x7, Dart. Inc. issued for $105 per share, 8,000 shares of $100 par value convertible preferred stock. One share of preferred can be converted into three shares of Dart's $25 per value common stock at the option of the preferred stockholder. In August, 20x8, all the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital as a result of the conversion of the preferred stock into common stock. a. $ 80,000. b. $120,000. c. $200,000. d. $240,000. e. None of the above. 2. During 20x8, the Laser Company issued at 103 one hundred $1,000 bonds due in ten years. One detachable stock purchase warrant entitling the holder to purchase 15 shares of Laser's common stock was attached to each bond. At the date of issuance, the market value of the bonds, without the stock purchase warrants, was quoted at 95. The market value of each detachable warrant was quoted at $60. What amount, if any, of the proceeds from the issuance should be accounted for as part of Laser's stockholders' equity?
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