1. A corporation issued 1,000 shares of common stock. The stock has par value of $0.01 per share and was sold for cash at par. Which is the correct journal entry to record the transaction?

A) cash debited for $100 and Common Stock-$0.01 Par value credited for $100

B) Cash debited for $10,000, Common Stock-$0.01 Par value credited for $100 and Paid In Capital Excess of par-common credited for $9,900

C) Cash credited for $10,000 and Common Stock-$0.01 Par Value debited for $10,000

D) Paid-In capital in excess of par-Common debited for $9,900 and Common Stock-0.01 Par value credited for $9,900

2. Net income for 2015 is $810 Percent of Total is 16.5

The figure 16.5% shown for net income in 2015 signifies that

A) net income if 16.5% of net sales revenue

B) Net income increased by 16.5% over the previous year

C) net income is equal to 16.5 times of the income before income tax

D) Net income is 16.5% of gross profit

3.Incorporation has 2,000 of shares of common stock outstanding. A stockholder has 100 shares. IF the comp. distributes a 20% stock dividend, how many shares of the Incorporation will the stockholder have?

A) 100

B) 120

C) 20

D) 400

4.Which of the following would be included in the entry to record the payment of a previously declared dividend of $0.25 per share on 12,500 shares of common stock?

A) Dividend payable debited for 3,125

B) Retained earnings credited for 3,125

C) Retained earnings debited for 3,125

D) Cash debited for 3,125

5. Which of the following sections of the statement of cash flows includes activities that affect current assets and current liablilites on the balance sheet (assume indirect method is used)

A) operating section

B) investing section

C) Financing section

D) non-cash investing and financing

6.On Oct. 1, 2015, A to Z Products borrowed $48,000 on a 5%, 10-year note with annual installment payments of $4,800 plus interest due on Oct. 1 of each succedding year. On Oct. 1,2016, what will be the balance in long-term notes payable acct?

A) $48,000

B) $4,800

C) $38,400

D) $43,200

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