1. Consider treasury stock. Which statement is true? a. Treasury stock shows as a contra-stockholders' equity account. b. Treasury stock involves the company buying another company's stock. c. Treasury stock is the same as preferred stock. d. Treasury stock is considered to be outstanding stock. 2. The account least likely to be a stockholders' equity account is: a. Preferred stock b. Common stock c. Treasury stock d. Mortgage payable 3. ABC Company has a stock option plan as part of its compensation agreement. Assume that John, an employee, is in the stock option plan. He entered the stock option plan on September 1, Year 7 and will be able to exercise the stock options on September i, Year 10. The type of stock involved is common stock. The exercise price is $50 and he is granted 5,000 stock options. The market price on September 1, Year 10 is $75. Assume that John exercises the stock options on September 1, Year 10. He will: a. Pay S0 each for 5,000 shares b. Pay S25 each for 5,000 shares c. Pay S75 each for 5,000 shares d. Pay S50 each for 5,000 shares 4. XYZ Company issued 100,000 shares of stock on April 10, Year 1; issued 90,000 shares of stock on September 15, Year 4: issued 16,000 shares of stock on February 1, Year 10; purchased 50,000 shares of stock on August 10, Year 11; purchased 45,000 shares of stock on June 10, Year 12; and sold back 10,000 shares of the previously- purchased stock on May 1, Year 13. How many shares of stock are outstanding on May 2. Year 13? a. 121,000 shares b. 256,000 shares c. 161,000 shares d. 95,000 shares 5. ABC Company recorded this journal entry: $400,000 Cash Common Stock Additional Paid-in Capital --Common Stock $5,000 $395,000 You know that 10,000 shares were sold. What are the amounts per share? Market Price Par Value Additional Paid-in Capital a. S0.50 $40.00 $3.95 b. S39.50 S0.50 $395.00 c. S40.00 S0.50 $39.50 d. $40.00 S40.00 SO 6. XYZ Company did have 100,000 shares of common stock outstanding. XYZ issued a stock dividend and issued an additional 10,000 shares of common stock. FGH Company did have 500,000 shares of common stock outstanding. FGH issued a stock dividend and issued an additional 200,000 shares of common stock outstanding. Which statement is true? a. XYZ has a small stock dividend and FGH has a large stock dividend. b. XYZ has a large stock dividend and FGH has a small stock dividend. c. XYZ has a small dividend and FGH has a 2:5 stock split. d. XYZ has a small stock split and FGH has a large stock split