Acct
387 Q1A-IC
(Chap. 15 -16) Name_Solution___
Spring Given
in Class 1/31
Doran
Group#
Total
of 16 points.
Part
I. Multiple Choice (Circle the Best Answer) 2 points each
1. Presented below is information related to Getty Corporation:
Subscriptions Receivable,
Common Stock $ 120,000
Common Stock, $1 par 3,600,000
Common Stock Subscribed 240,000
Paid-in Capital in Excess of
Par—Common Stock 210,000
Preferred 8 1/2% Stock, $50
par 1,200,000
Paid-in Capital in Excess of
Par—Preferred Stock 240,000
Retained Earnings 900,000
Treasury Common Stock (at
cost) 90,000
The total
stockholders' equity of Getty Corporation is (Note: Assume Subscriptions
receivable is treated as contr-equity)
a. $6,180,000. b.
$6,270,000. c. $6,300,000. d. $6,390,000.
2. When a corporation issues shares of its own stock
in payment for services, the least appropriate
basis for recording this transaction would be
a. the fair
market value of the services received
b. the par or stated value of the shares
issued.
c. the fair
market value of the shares issued
d. All of the
above are equally appropriate basis for recording the transaction
3. Nelsen Co.
was organized on January 2, 2001, with 100,000 authorized shares of $10 par
value common stock. During 2001 Nelsen
had the following capital transactions:
January
5—issued 75,000 shares at $14 per share.
July 27—purchased 5,000 shares
at $11 per share.
November 25—sold 4,000 shares
of treasury stock at $13 per share.
Nelsen used the cost method to record the purchase of the treasury
shares. What would be the balance in the Paid-in Capital from Treasury Stock
account at December 31, 2001?
a.
$0. b. $4,000. c. $8,000. d. $12,000.
4. An entry is
not made on the
a. date of
declaration.
b. date of
record.
c. date of
payment.
d. An entry is
made on all of these dates.
-Continued
on Back Side-
5.
A retained earnings appropriation always means the company is
a. setting aside cash for a specific
purpose.
b. disclosing managerial policy.
c. preventing unusual losses.
d. improving the debt-equity ratio.
6.
Stine Co. had outstanding 2,000 shares of $100 par value 8% cumulative
preferred stock and 30,000 shares of $5 par value common stock on December 31,
1998. At December 31, 1998, dividends in
arrears on the preferred stock were $20,000.
Cash dividends declared in 1999 totaled $60,000. The amounts paid to each class of stock were
Preferred
Stock Common Stock
a. $16,000 $44,000
b. $20,000 $40,000
c. $36,000 $24,000
d. $40,000 $20,000
Part
II. Fill in the blank (1/2 point each)
Indicate the effect of each of the following transactions on total stockholders' equity by placing an
"X" in the appropriate column.
Increase Decrease No Effect
1.
The sale of
treasury stock for
less than its cost. ___X___ ________ ________
2.
Not
declaring this year's dividend
On cumulative preferred stock ________ ________ ___X___
3.
Declaration
of a stock dividend. ________ ________ ___X___
4.
Payment of a
stock dividend. ________ ________ ___X___
5.
Acquiring
land by issuing
common stock ___X___ ________ ________
6. Declaration
of cash dividend. ________ ___X___ _______
7. Payment
of cash dividend. ________ ________ ___X___
8.
Conversion
of bonds payable
into preferred stock ___X___ ________ ________
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