Supplemental Instruction
Iowa State University / Leader: / Vince
Course: / ACCT 284
Instructor: / Clem
Date: / April 19th, 2016
1. A corporation's charter permits the corporation to issue 100,000 shares of $0.01 par value common stock. The corporation sold 50,000 shares and, later, reacquired 1,000 shares to hold as treasury stock. What is the number of shares outstanding?
A) 100,000
B) 50,000
C) 51,000
D) 49,000
2. Consider the following:
Beginning number of outstanding shares of common stock 1,100,000
Net income $1,500,000
Ending number of outstanding shares of common stock 1,300,000
Number of shares of treasury stock 200,000
What is the earnings per share?
A) $1.50
B) $1.25
C) $1.20
D) $1.15
3. A corporation sold 10,000 shares of $5 par value common stock for $40 per share. The journal entry to record the transaction will include
A) a credit to Gain on Sale of Common Stock for $350,000.
B) a credit to Common Stock for $50,000.
C) a credit to Common Stock for $400,000.
D) a credit to Capital in Excess of Par Value for $35,000.
4. A corporation issued 5,000 shares of its $5 par value common stock for a building. On the date of the transaction, the market value of the common stock was $40 per share. At what amount should the building be recorded?
A) $200,000
B) $25,000
C) $175,000
D) $225,000
5. A corporation issued 1,000 shares of $5 par common stock for the legal services of a law firm that accepted the shares as payment of its $45,000 invoice for services performed for the issuing corporation. There was no market value established for the common stock. At what amount should the legal fees expense be recognized?
A) $5,000
B) $40,000
C) $45,000
D) $50,000
6. Par value
A) has no relationship to market value.
B) is a nominal value.
C) establishes legal capital.
D) is all of the above.
7. The three dates associated with a cash dividend are, in no particular order, the date of payment, the date of declaration, and the date of record. What is the proper order of these dates?
A) date of declaration, date of payment, and date of record
B) date of declaration, date of record, and date of payment
C) date of record, date of declaration, and date of payment
D) date of payment, date of declaration, and date of record
8. As a stockholder, you will have first claim to assets in the event the company liquidates.
A) True
B) False
9. Outstanding shares refer to the maximum number of shares of capital stock that can be issued by a corporation.
A) True
B) False
10. The common stock of a corporation that is reacquired by the corporation is called treasury stock.
A) True
B) False
11. Company A was organized on January 1, 2008 by 10 stockholders. The following stock has been authorized:
Common Stock, $1 par, 250,000 shares
Preferred Stock, $10 par, 5%, 50,000 shares
The following transactions have occurred in 2008:
a. Collected $70,800 from each of the 10 stockholders. In exchange, each received 2,000 shares of common stock.
b. Sold 12,000 shares of preferred stock for $25 each.
Net income for 2008 was $43,000. Dividends declared and paid were $10,000.
What amount should be in each of the following accounts?
Preferred Stock______
Preferred Stock, Paid in Capital______
Common Stock______
Common Stock, Paid in Capital______
Total Contributed Capital______
Retained Earnings______
Total Stockholder’s Equity______