16. In 2008 Newt Corp. acquired 6,000 shares of its own $1 par value common stock at $18 per share. In 2009, Newt issued 3,000 of these shares at $25 per share. Newt uses the cost method to account for its treasury stock transactions. What accounts and amounts should Newt credit in 2009 to record the issuance of the 3,000 shares?

	Treasury stock	Additional paid-in capital	Retained earnings	Common stock
A.	$54,000		$21,000
B.	$54,000	$21,000
C.		$72,000		$3,000
D.		$51,000	$21,000	$3,000

A: A. B: B. C: C. D: D.

17. Cash dividends on the $10 par value common stock of Ray Company were as follows:

1st quarter of 2009 $ 800,000

2nd quarter of 2009 900,000

3rd quarter of 2009 1,000,000

4th quarter of 2009 1,100,000

The 4th quarter cash dividend was declared on December 20, 2009, to stockholders of record on December 31, 2009. Payment of the 4th quarter cash dividend was made on January 9, 2010. In addition, Ray declared a 5% stock dividend on its $10 par value common stock on December 1, 2009, when there were 300,000 shares issued and outstanding and the market value of the common stock was $20 per share. The shares were issued on December 21, 2009. What was the effect on Rays stockholders equity accounts as a result of the above transactions?

	Common stock	APIC	Retained earnings
A.	$0	$0	$3,800,000 debit
B.	$150,000 credit	$0	$3,950,000 debit
C.	$150,000 credit	$150,000 credit	$4,100,000 debit
D.	$300,000 credit	$300,000 debit	$3,800,000 debit

A: A. B: B. C: C. D: D.

18. Seco Corp. was incorporated on January 2, 2009. The following information pertains to Secos common stock transactions:

2009
January 2	Number of shares authorized	80,000
February 1	Number of shares issued	60,000
July 1	Number of shares reacquired but not canceled	5,000
December 1	2-for-1 stock split

At December 31, 2009, the number of shares of Secos common stock outstanding is

A: 150,000 B: 120,000 C: 115,000 D: 110,000