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| 1 | |
Burn Corp. just issued 10,000 shares of $2 par value common stock for $8 per share. The journal entry to record this transaction is: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q1_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q1_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q1_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (13.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q1_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>]]> |
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| 2 | |
VT Corporation issued 8,000 shares of $1 par value common stock in exchange for a tract of land valued at $200,000. Since VT's stock is not publicly traded, there is no fixed market value for the stock. The journal entry to record this exchange is: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q2_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (13.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q2_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q2_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q2_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
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| 3 | |
All of the following would change the balance in Retained Earnings except: |
| | A) | declaring cash dividends |
| | B) | net income |
| | C) | declaring a small stock dividend |
| | D) | the acquisition of treasury stock |
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| 4 | |
Cray Inc.'s equity section shows:
$1.00 par value common stock, 1,000,000 shares authorized, 20,000 shares issued Paid in capital in excess of par, common stock = $800,000
What was the average issue price of the common stock? |
| | A) | $21.00 |
| | B) | $40.00 |
| | C) | $41.00 |
| | D) | Cannot be determined with these facts |
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| 5 | |
The journal entry to record the declaration of a cash dividend is: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q5_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q5_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q5_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q5_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]> |
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| 6 | |
A large common stock dividend results in a decrease in _____ and an increase in ______. |
| | A) | assets; a liability |
| | B) | retained earnings; common stock |
| | C) | retained earnings; a liability |
| | D) | assets; retained earnings |
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| 7 | |
When Treasury stock is purchased, assets are ______ and the treasury stock account is shown in a company's financial statements as ______________. |
| | A) | decreased; a reduction of total stockholders' equity |
| | B) | increased; intangible asset |
| | C) | decreased; current asset |
| | D) | decreased; common stock |
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| 8 | |
Reissuing treasury stock at a price higher than the price paid to acquire the stock results in a(n): |
| | A) | increase in retained earnings |
| | B) | gain on sale of treasury stock that is reported on the income statement |
| | C) | increase in Paid-in-Capital in Excess of Par - Treasury Stock |
| | D) | increase in Paid-in-Capital - Treasury Stock |
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| 9 | |
Glenn Company issued stock for cash. Which part of the statement of cash flows would be affected by this event? |
| | A) | operating activities |
| | B) | financing activities |
| | C) | operating and financing activities |
| | D) | investing and activities |
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| 10 | |
The interest expense recognized on a non-interest-bearing note is calculated using the _____ rate of interest and is recognized by _______. |
| | A) | market rate of interest on the date interest is recorded; debiting discount on notes payable |
| | B) | market rate of interest at the date the note was issued; crediting discount on notes payable |
| | C) | market rate of interest at the date the note was issued; crediting cash |
| | D) | face rate of interest; debiting notes payable |
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| 11 | |
The journal entry to record a payment on an installment note is: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q11_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q11_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q11_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q11_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> |
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| 12 | |
The journal entry recorded by a company when it signs a lump sum payment note in exchange for a tract of land is: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q12_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q12_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q12_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q12_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> |
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| 13 | |
Purda Inc. has the following showing in the equity section of their balance sheet at year end:
$1.00 par value common stock, 1,000,000 issues, ___? shares issues = $17,000
Paid in capital in excess of par, common stock = ______?
Retained earnings = $100,000
Treasury stock, 1,000 shares, common stock = $27,000 |
| | A) | $246,000 |
| | B) | $209,000 |
| | C) | $192,000 |
| | D) | $144,000 |
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| 14 | |
When the market rate of interest on the date bonds are issued is lower than the face rate of interest on the bonds the entry to record the issuance of the bond is: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q14_opta.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q14_optb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (11.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q14_optc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794884/ch15_q14_optd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
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| 15 | |
The amortization of a discount on bonds payable ________ the carrying value of the bond and ______ interest expense. |
| | A) | decreases; increases |
| | B) | increases; decreases |
| | C) | decreases; decreases |
| | D) | increases; increases |
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