12. Jan Irving started a sole proprietorship on January 1, 2018 with a $1,000 cash contribution

to the business. During the first year of operations the company generated $5,000 of cash

revenue and incurred $2,000 of cash expenses. Also, Jan withdrew $500 from the business.

At the end of 2018 the balance in the Jan Irving, Capital account was

a. $1,000.

b. $3,500.

c. $3,000.

d. $4,000.

13. ABC Company is authorized to issue 100,000 shares of common stock. The company

issued 60,000 shares of common stock and later repurchased 15,000 shares of its own

common stock. How many shares are outstanding?

a. 45,000.

b. 60,000.

c. 100,000.

d. 40,000.

Use the following information to answer the next two questions.

The Kramer Company was

started when it issued 200 shares of $5 par value common stock at a market price of $20 per

share. The company repurchased 10 shares at a market price of $15 per share.

14. The entry to record the original issue of 200 shares of stock would

a. increase cash by $4,000 / increase common stock and paid-in capital in excess of par

value by $1,000 and $3,000, respectively.

b. increase cash by $4,000 / increase common stock by $4,000.

c. decrease cash by $4,000 / increase common stock common stock by $4,000.

d. increase cash by $1,000 / increase common stock by $1,000.

15. The entry to record the purchase of the 10 shares of the companys own stock would

a. decrease assets / decrease equity.

b. decrease assets / increase equity.

c. decrease assets / increase treasury stock.

d. both a and c.