1. On March 1, 2004, Leo Corp. was formed by issuing 100,000 shares of $1 par value common stock at $5 per share and 20,000 shares of $100 par value preferred stock at $101 per share. If Leo earned $35,000 in its first year of operations, total stockholders equity at year end would be

		$335,000
		$735,000.
		$2,135,000.
		$2,555,000

2. William Corp. issued 10,000 shares of its $1 par value common stock for a building. The building was listed for sale at $500,000. Williams common stock is currently selling for $45 per share. William Corp. should record the building at

$10,000

$440,000

$450,000

$500,000

3. B Corp. issued 200,000 shares of common stock when it began operations in 2004 and issued an additional 100,000 shares in 2005. B also issued preferred stock convertible into 100,000 shares of common stock. In 2006, B purchased 75,000 shares of its common stock and held it in the treasury. At December 31, 2006, how many shares of B's common stock were outstanding?

		400,000
		325,000
		300,000
		225,000

4. Coe Corp. issued 20,000 shares of $5 par common stock at $10 per share. On December 31, 2005, Coe's retained earnings were $300,000. In March 2006, Coe reacquired 5,000 shares of its common stock at $20 per share. In June 2006, Coe sold 1,000 of these shares to its corporate officers for $25 per share. Coe uses the cost method to account for its treasury stock. Net income for the year ended December 31, 2006, was $60,000. At December 31, 2006, what amount should Coe report as retained earnings?

		$360,000
		$365,000
		$375,000
		$380,000

5. The Company purchases an asset on January 1, 2005, for $200,000. The straight-line method of depreciation is used for book purposes, resulting in depreciation of $50,000 per year. An accelerated method is used for tax purposes, resulting in depreciation of $80,000, $60,000, $40,000, and $20,000 for the years 2005, 2006, 2007, and 2008, respectively. Assume that the tax rate is 40 percent for all years and that depreciation is the only temporary difference between book and tax purposes. The 2005 journal entry would include a

		debit to Deferred Tax Liability of $12,000
		debit to Deferred Tax Liability of $4,000
		credit to Deferred Tax Asset of $4,000
		credit to Deferred Tax Liability of $12,000