Adler Corporation has 50,000 shares of $10 par common stock authorized. The following transactions took place during 2008, the first year of the corporation's existence:
Sold 5,000 shares of common stock for $18 per share.
Issued 5,000 shares of common stock in exchange for a patent valued at $100,000.
At the end of the Adler's first year, total paid-in capital amounted to
On September 1, 2008, Zelner Company reacquired 12,000 shares of its $10 par value common stock for $15 per share. Zelner uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit
a. Treasury Stock for $120,000.
b. Common Stock for $120,000.
c. Common Stock for $120,000 and Paid-in Capital in Excess of Par for $60,000.
d. Treasury Stock for $180,000.
Gannon Company acquired 6,000 shares of its own common stock at $20 per share on February 5, 2006, and sold 3,000 of these shares at $27 per share on August 9, 2007. The market value of Gannon's common stock was $24 per share at December 31, 2006, and $25 per share at December 31, 2007. The cost method is used to record treasury stock transactions. What account(s) should Gannon credit in 2007 to record the sale of 3,000 shares?
a. Treasury Stock for $81,000.
b. Treasury Stock for $60,000 and Paid-in Capital from Treasury Stock for $21,000.
c. Treasury Stock for $60,000 and Retained Earnings for $21,000.
d. Treasury Stock for $72,000 and Retained Earnings for $9,000
King Co. issued 100,000 shares of $10 par common stock for $1,200,000. King acquired 8,000 shares of its own common stock at $15 per share. Three months later King sold 4,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 4,000 treasury shares, King should credit
a. Treasury Stock for $76,000.
b. Treasury Stock for $40,000 and Paid-in Capital from Treasury Stock for $36,000.
c. Treasury Stock for $60,000 and Paid-in Capital from Treasury Stock for $16,000.
d. Treasury Stock for $60,000 and Paid-in Capital in Excess of Par for $16,000.
Debt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses and are included as other comprehensive income and as a separate component of stockholders' equity are
a. held-to-maturity debt securities.
b. trading debt securities.
c. available-for-sale debt securities.
d. never-sell debt securities.
A requirement for a security to be classified as held-to-maturity is
a. ability to hold the security to maturity.
b. positive intent.
c. the security must be a debt security.
d. All of these are required.
Which of the following is not an accurate representation concerning revenue recognition?
a. Revenue from selling products is recognized at the date of sale, usually interpreted to mean the date of delivery to customers.
b. Revenue from services rendered is recognized when cash is received or when services have been performed.
c. Revenue from permitting others to use enterprise assets is recognized as time passes or as the assets are used.
d. Revenue from disposing of assets other than products is recognized at the date of sale.
The process of formally recording or incorporating an item in the financial statements of an entity is
A sale should not be recognized as revenue by the seller at the time of sale if
a. payment was made by check.
b. the selling price is less than the normal selling price.
c. the buyer has a right to return the product and the amount of future returns cannot be reasonably estimated.
d. none of these.
Which of the following is not a characteristic of a defined-contribution pension plan?
a. The employer's contribution each period is based on a formula.
b. The benefits to be received by employees are defined by the terms of the plan.
c. The accounting for a defined-contribution plan is straightforward and uncomplicated.
d. The benefit of gain or the risk of loss from the assets contributed to the pension fund are borne by the employee.
In accounting for a defined-benefit pension plan
a. an appropriate funding pattern must be established to ensure that enough monies will be available at retirement to meet the benefits promised.
b. the employer's responsibility is simply to make a contribution each year based on the formula established in the plan.
c. the expense recognized each period is equal to the cash contribution.
d. the liability is determined based upon known variables that reflect future salary levels promised to employees.
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