1. Centex, Inc. issued 42,000 shares of its $1 par value common stock for $25 per share. The journal entry to record the stock issue would include which of the following?

A. A credit to cash for $1,050,000.

B. A credit to additional paid-in capital for $1,050,000.

C. A credit to common stock for $42,000.

D. A credit to additional paid-in capital for $42,000.

2. Grant Corporation is looking to purchase a building costing $940,000 by paying $320,000 cash on the purchase date, and agreeing to make payments every three months for the next five years. The first payment is due three months after the purchase date. Grant's incremental borrowing rate is 12%. Each of the payments is closest to: (Table A.1, Table A.2, Table A.3, and Table A.4) (Use appropriate factor(s) from the tables provided.)

A. $63,183.

B. $57,674.

C. $31,000.

D. $41,674.

3. Assume the following capital structure:

Preferred stock, 7%, $50 par value, 1,700 shares issued and outstanding with dividends in arrears for three prior years (2011 - 2013).

Common stock, $100 par value, 2,700 shares issued and outstanding.

Total dividends declared and paid in 2014 were $57,000. How much of the 2014 dividend will be paid to the preferred stockholders assuming the preferred stock is cumulative?

A. $33,200.

B. $23,800.

C. $5,950.

D. $51,050.

4. Potaw Company reported the following data at the end of 2014:

Sales revenue (75% on credit)	$ 300,000
Expenses (26% on credit)	60,000
Accounts receivable, net at December 31, 2014 (a decrease of $4,000 during 2014)	8,000
Total assets	200,000
Stockholders' equity	150,000

The average number of days to collect receivables during 2014 is closest to: (Do not round your intermediate calculations. Use 365 days a year.)

A. 41.79.

B. 12.17.

C. 16.22.

D. 9.73.

5. KAJ Incorporated purchased a machine costing $272,000 by paying $37,200 and signing a $219,400 note payable. How would this transaction be reported within the cash flow from investing activities section of the cash flow statement?

A. An outflow of $219,400.

B. An outflow of $272,000.

C. An outflow of $37,200.

D. It would not be reported in the investing activities section of the cash flow statement.

6. RKJ Company has provided the following: 116,000 shares of $5 par value common stock are authorized 77,200 shares have been issued 69,400 shares are outstanding Which of the following statements is correct?

A. RKJ can issue an additional 46,600 shares of common stock.

B. RKJ has 46,600 shares of treasury stock.

C. RKJ has 38,800 shares of treasury stock.

D. RKJ can resell 7,800 shares of common stock.