ACCT 5301 Boot Camp

ACCT 5301 Boot Camp

Homework Module 9 Name______

___1. / If a corporation is authorized to issue 1,000 shares of $50 common stock, it is said to have $50,000 of stock outstanding.
A) / True
B) / False
___2. / Par value per share is the price at which a share of stock is bought or sold.
A) / True
B) / False
___3. / The declaration of cash dividends reduces retained earnings.
A) / True
B) / False
___4. / Purchasing treasury stock reduces the corporation's assets and stockholders' equity by equal amounts.
A) / True
B) / False
___5. / If a company resells treasury stock below the acquisition cost, then the income statement must report a loss from the sale of treasury stock.
A) / True
B) / False
___6. / At January 1, 2007, Baxter Company has $1 par value common stock, 200,000 shares authorized, 90,000 shares issued and 80,000 shares outstanding. How many shares of treasury stock does the company have at January 1, 2007?
A) / 30,000 shares
B) / 110,000 shares
C) / 120,000 shares
D) / 10,000 shares
E) / cannot be determined from the information above

___7. Izzy Corporation repurchased some of its own common stock from the marketplace in January of 2007. Izzy paid $20 per share to purchase 1,000 shares of its $10 par value stock. Note that this is the first treasury stock transaction that Izzy has undertaken. Assume that, on December 1, 2007, Izzy reissued all 1,000 shares of treasury stock at $19 per share. The journal entry to record this reissue would include:

A.a credit to Treasury Stock for $19,000

B.a credit to Treasury Stock for $10,000

C.a debit to Retained Earnings for $1,000

D.a credit to Cash for $19,000

E.a debit to Loss on Sale of Stock for 1,000

___8. / Treasury stock is classified as:
A) / An asset account.
B) / A contra asset account.
C) / A revenue account.
D) / A contra equity account.
E) / A liability account.

___9. Parker Pharmaceuticals issued 10,000 shares of $1 par value common stock. At the date of issue, the market price per share was $20. The journal entry to record the issue would include:

A)a debit to Common Stock for $200,000

B)a credit to Cash for $200,000

C)a credit to Additional Paid in Capital on Common Stock for $190,000

D)a credit to Common Stock for $200,000

The following information is for the next 3 questions:

Given the following excerpt from the 2008 balance sheet of Poser Corporation:

Common stock, $5 par value, 500,000 shares authorized, ? shares issued,

? shares outstanding$ 100,000

Additional paid-in capital on Common Stock 400,000

Retained earnings 500,000

Less treasury stock, 2,000 shares at cost (36,000)

Total stockholders' equity$ 964,000

___10. How many shares of common stock of Poser Corporation are issued at December 31, 2008?

a.100,000 shares

b.500,000 shares

c.18,000 shares

d.20,000 shares

___11. THE ANSWER IS cHow many shares of common stock of Poser Corporation are outstanding at December 31, 2008?

a.100,000 shares

b.500,000 shares

c.18,000 shares

d.20,000 shares

___12. What was the average market price per share of Poser’s common stock at its issue?

a.$5 per share

b.$20 per share

c.$25 per share

d.$50 per share

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