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Chapter 10 Multiple Choice Answers

# Chapter 10 Multiple Choice Answers - 1,000 Paid-in excess...

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1. CHAPTER 10 - MULTIPLE-CHOICE EXERCISES 10–1 a 10–2 d 10–3 a 10–4 d Total stock issued (\$37,500 ÷ \$0.50) ................. 75,000 shares Less: Treasury stock .......................................... 5,000 shares Total stock outstanding ..................................... 70,000 shares 10–5 c 10–6 d 2,400 shares × \$20/share = \$48,000 increase to stockholders’ equity Cash .............................................................................. \$48,000 Common stock (2,400 × \$2 par) ................................ 4,800 Paid-in excess of par—common stock (2,400 × \$18) .............................................................. \$ 43,200 10–7 c Prepaid rent (\$2,400 × 24 months) ............................. \$ 57,600* Common stock (1,000 shares × \$1 par)

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Unformatted text preview: ................... 1,000 Paid-in excess of par—common stock. .................... \$ 56,600 *For newly organized or closely held corporations, the fair market value of the asset/service is usually more readily determinable than the fair market value of the stock. 10–8 b 10–9 b 10–10 d 10–11 a 10–12 d 10–13 b 10–14 d 10–15 c 10–16 d \$30 market price ÷ 3 = \$10 per new share 10–17 a 10–18 a Preferred dividends: 2008 (in arrears): (20,000 × \$40) × 5% = \$40,000 2009: (20,000 × \$40) × 5% = \$40,000 \$150,000 – \$80,000 = \$70,000 left over for dividends to common shareholders. 10–19 d 10–20 a 10–21 a \$100,000 ÷ \$200,000 = 0.5...
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