Here are 10 questions with the answers. I need to see how to solve the questions. 78. Pember Corporation started business in 2005 by issuing 200,000 shares of $20 par common stock for $36 each. In 2010, 20,000 of these shares were purchased for $52 per share by Pember Corporation and held as treasury stock. On June 15, 2011, these 20,000 shares were exchanged for a piece of property that had an assessed value of $810,000. Perbers stock is actively traded and had a market price of $60 on June 15, 2011. The cost method is used to account for treasury stock. The amount of paid-in capital from treasury stock transactions resulting from the above events would be a. $800,000. b. $480,000. c. $390,000. d. $160,000. Answer is D 80. Gannon Company acquired 6,000 shares of its own common stock at $20 per share on February 5, 2010, and sold 3,000 of these shares at $27 per share on August 9, 2011. The market value of Gannon's common stock was $24 per share at December 31, 2010, and $25 per share at December 31, 2011. The cost method is used to record treasury stock transactions. What account(s) should Gannon credit in 2011 to record the sale of 3,000 shares? a. Treasury Stock for $81,000. b. Treasury Stock for $60,000 and Paid-in Capital from Treasury Stock for $21,000. c. Treasury Stock for $60,000 and Retained Earnings for $21,000. d. Treasury Stock for $72,000 and Retained Earnings for $9,000. Answer is B 83. Percy Corporation was organized on January 1, 2010, with an authorization of 1,200,000 shares of common stock with a par value of $6 per share. During 2010, the corporation had the following capital transactions: January 5 issued 675,000 shares @ $10 per share July 28 purchased 90,000 shares @ $11 per share December 31 sold the 90,000 shares held in treasury @ $18 per share Percy used the cost method to record the purchase and reissuance of the treasury shares. What is the total amount of additional paid-in capital as of December 31, 2010? a. $-0-. b. $2,070,000. c. $2,700,000. d. $3,330,000. Answer is D 84. Sosa Co.'s stockholders' equity at January 1, 2010 is as follows: Common stock, $10 par value; authorized 300,000 shares; Outstanding 225,000 shares $2,250,000 Paid-in capital in excess of par 900,000 Retained earnings 2,190,000 Total $5,340,000 During 2010, Sosa had the following stock transactions: Acquired 6,000 shares of its stock for $270,000. Sold 3,600 treasury shares at $50 a share. Sold the remaining treasury shares at $41 per share. No other stock transactions occurred during 2010. Assuming Sosa uses the cost method to record treasury stock transactions, the total amount of all additional paid-in capital accounts at December 31, 2010 is a. $891,600. b. $870,000. c. $908,400. d. $927,600. Answer is C 87. Luther Inc., has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2011, and December 31, 2010. The board of directors declared and paid a $5,000 dividend in 2010. In 2011, $24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2011? a. $17,000 b. $12,000 c. $ 7,000 d. $ 6,000 Answer is C 90. Pierson Corporation owned 10,000 shares of Hunter Corporation. These shares were purchased in 2007 for $90,000. On November 15, 2011, Pierson declared a property dividend of one share of Hunter for every ten shares of Pierson held by a stockholder. On that date, when the market price of Hunter was $14 per share, there were 90,000 shares of Pierson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Gain Net Reduction in Retained Earnings a. $0 $126,000 b. $0 $ 81,000 c. $45,000 $ 81,000 d. $45,000 $ 36,000 Answer is C 95. Hernandez Company has 350,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 10% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by a. $1,242,500. b. $525,000. c. $192,500. d. $175,000. Answer is A 98. The stockholders' equity of Howell Company at July 31, 2010 is presented below: Common stock, par value $20, authorized 400,000 shares; issued and outstanding 160,000 shares $3,200,000 Paid-in capital in excess of par 160,000 Retained earnings 650,000 $4,010,000 On August 1, 2010, the board of directors of Howell declared a 15% stock dividend on common stock, to be distributed on September 15th. The market price of Howell's common stock was $35 on August 1, 2010, and $38 on September 15, 2010. What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend? a. $800,000. b. $840,000. c. $912,000. d. $600,000. Answer is B 101. At the beginning of 2011, Flaherty Company had retained earnings of $200,000. During the year Flaherty reported net income of $100,000, sold treasury stock at a gain of $36,000, declared a cash dividend of $60,000, and declared and issued a small stock dividend of 3,000 shares ($10 par value) when the market value of the stock was $20 per share. The amount of retained earnings available for dividends at the end of 2011 was a. $180,000. b. $210,000. c. $216,000. d. $246,000. Answer is A 106. Mingenback Company has 560,000 shares of $10 par value common stock outstanding. During the year Mingenback declared a 5% stock dividend when the market price of the stock was $48 per share. Two months later Mingenback declared a $.60 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by: a. $336,000. b. $352,800. c. $1,344,000. d. $1,696,800. Answer is D