1. The par value of common stock represents the?

a) book value of the stock

b) liquidation value of the stock

c) legal nominal value assigned to the stock

d) amount received by the corporation when the stock was originally issued

2. Which of the following is an appropriated presentation of treasury stock?

a) As a deduction at cost from total contingent liabilities

b) As a deduction at cost from total assets

c) As a deduction at cost from total stockholder's equity

d) As a marketable security

3. Gains and losses on the purchase and resale of treasury stock may be reflected in paid in which accounts?

a) income, paid in capital from treasury stock, and retained earnings accounts

b) paid-in-capital from treasury stock and retained earnings accounts

c) only in paid-in-capital from treasury stock account

d) only in retained earnings account

4. When treasury stock is purchased for cash at more than its par value, what would the effect on total stockholder's equity under the cost method be?

a) if the purchase had been under par value there would have been an increase.

b) no effect under cost method

c) increase under cost method

d) decrease under cost method

5. On August 1, 2019, Amherst Company reacquired 4000 shares of its $ 15 par value common stock for $ 18 per share. Amherst uses the cost method to account for treasury stock. What journal entry should Amherst make to record the acquisitionn of treasury stock?

a) Retained Earnings 72,000

Cassh 72,000

b) Treasury Stock 60,000

Additional Paid in Capital 12,000

Cash 72,000

c) Treasury Stock 60,000

Retained Earnings 12,000

Cash 72,000

d) Treasury Stock 72,000

Cash 72,000

6. Lohman Inc was organized on January 3, 2019, with authorized capital of 100,000 shares of $ 10 par common stock. During 2019, Lohman had the following transactions affecting stockholder's equity:

January 7 - Issued 40,000 shares at $ 12 per share

December 2 - Purchased 6000 shares of treasury stock at $ 13 per share

The cost method was used to record the treasury stock transaction. Lohman's net income for 2019 is $ 300,000. What is the amount of stockholder's equity at December 31, 2019?

a) 702,000

b) 708,000

c) 1,000,000

d) 858,000

7. Porter Corporation had reacquired 10,000 shares of its $10 par common stock as treasury stock at a cost of $ 140,000. On December 10, 2019, Porter sold all 10,000 shares for $ 260,000. Assuming that Porter used the cost method of accounting for treasury stock, this sale would result in a credit to which account?

a) Paid in Capital from Treasury Stock of $ 120,000

b) Paid in Captial from Treasury Stock of $ 110,000

c) Gain on sale of Treasury Stock of $ 120,000

d) Retained Earnings of $ 110,000

8. Blossom Corporation was organized on January 2 with 100,000 authorized shares of $ 10 par value common stock. During the year, Blossom had the following capital transactions:

January 5 --- Issued 75,000 shares at $ 14 per share

December 27 - purchased 5,000 shares at $ 11 per share back as treasury stock

Blossom used the par value method to record the purchase of treasury stock.

What would be the balance in the paid in capital from treasury stock account at December 31?

a) 0

b) 5,000

c)20,000

d) 15,000