Chapter%2013%20Quiz - Chapter 13 Quiz 1. At the date of the...

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Unformatted text preview: Chapter 13 Quiz 1. At the date of the financial statements, common stock shares issued would exceed common stock shares outstanding as a result of the a. declaration of a stock split. b. declaration of a stock dividend. c. purchase of treasury stock. d. payment in full of subscribed stock. 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 No a. No Yes b. No Yes No c. Yes Yes d. 3. Five thousand shares of common stock with a par value of $10 per share were issued initially at $12 per share. Subsequently, 1,000 of these shares were acquired as treasury stock at $15 per share. Assuming that the par value method of accounting for treasury stock transactions is used, what is the effect of the acquisition of the treasury stock on each of the following? Additional Retained Paid‐In Capital Earnings No effect a. Increase Decrease b. Increase Increase c. Decrease Decrease Decrease d. 4. On July 31, 2010, Lakers Corporation purchased 500,000 shares of Celtic Corporation. On December 31, 2011, Lakers distributed 250,000 shares of Celtic stock as a dividend to Lakers' stockholders. This is an example of a a. liquidating dividend. b. investment dividend. c. property dividend. d. stock dividend. 5. On July 1, Black Corporation had 200,000 shares of $10 par common stock outstanding. The market price of the stock was $12 per share. On the same date, Black declared a 1‐for‐2 reverse stock split. The par value of the stock was increased from $10 to $20, and one new $20 par share was issued for each two $10 par shares outstanding. Immediately before the 1‐for‐2 reverse stock split, Black's additional paid‐in capital was $650,000. What should be the balance in Black's additional paid‐in capital account immediately after the reverse stock split? a. $450,000 b. $650,000 c. $850,000 d. $1,050,000 6. On June 1, Mason Company issued 8,000 shares of its $10 par common stock to Dixon for a tract of land. The stock had a fair market value of $18 per share on this date. On Dixon's last property tax bill, the land was assessed at $96,000. Mason should record an increase in Additional Paid‐In Capital of a. $96,000. b. $64,000. c. $40,000. d. $16,000. 7. On August 1, 2011, B. Doran Company reacquired 4,000 shares of its $15 par value common stock for $18 per share. Doran uses the cost method to account for treasury stock. What journal entry should Doran make to record the acquisition of treasury stock? 60,000 a. Treasury Stock ....................... Additional Paid-In Capital ........... Cash ............................... b. Treasury Stock ....................... Retained Earnings .................... Cash ............................... Retained Earnings .................... c. Cash ............................... d. Treasury Stock ....................... Cash ............................... 12,000 60,000 12,000 72,000 72,000 72,000 72,000 72,000 72,000 8. Harbottle Corporation was organized on January 3, 2011, with authorized capital of 100,000 shares of $10 par common stock. During 2011, Harbottle had the following events: • January 7‐‐Issued 40,000 shares at $12 per share • December 2‐‐Purchased 6,000 shares of treasury stock at $13 per share • Harbottle's net income for 2011 is $300,000 The par value method was used to record the treasury stock transaction.. What is the amount of stockholders' equity at December 31, 2011? a. $640,000 b. $702,000 c. $402,000 d. $858,000 9. On December 10, Daniel Co. split its stock 5‐for‐2 when the market value was $65 per share. Prior to the split, Daniel had 200,000 shares of $15 par value stock. After the split, the par value of the stock was a. $3.00 b. $6.00 c. $15.00 d. $37.50 10. On December 31, 2011, the stockholders' equity section of Addyson Co. was as follows: Common stock, par value $10; authorized, 60,000 shares; issued and outstanding, 18,000 shares ............... Additional paid-in capital ............................ Retained earnings ..................................... Total stockholders' equity ............................ $180,000 232,000 192,000 $604,000 On March 31, 2012, Addyson declared a 10 percent stock dividend. Prior to the dividend, the fair market value of the stock was $17.60 per share. For the three months ended March 31, 2012, Addyson sustained a net loss of $64,000. The balance of Addyson's Retained Earnings as of March 31, 2012, should be a. $99,200. b. $96,320. c. $156,800. d. $92,800. Answer Key: 1. C 2. C 3. D 4. C 5. B 6. B 7. D 8. B 9. B 10. A ...
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This note was uploaded on 04/06/2011 for the course ACCT 4050 taught by Professor Rodney during the Spring '11 term at University of Georgia Athens.

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