M6

1

Monarch Company reported Subscriptions Receivable-Common Stock of $1,500 and Common Stock Subscribed of $3,200 on its balance sheet. All the following are true except:

		the amount previously collected on the stock subscriptions is $1,700.
		the original stock subscribed totaled $3,200.
		Monarch previously issued $1,700 of the subscribed stock.
		the remaining amount to be collected from subscribers before the shares will be issued is $1,500.

2

Diamonds Forever Corporation received subscriptions for 100 shares of its $100 par value common stock for $120 per share. The entry to record the receipt of the subscriptions would include a:

		debit to Common Stock Subscribed for $10,000.
		debit to Subscriptions Receivable-Common Stock for $10,000.
		credit to Paid-in Capital in Excess of Par ValueCommon for $2,000.
		credit to Common Stock to be Outstanding $12,000.

3

Tory Company received the first installment of $2,000 on a common stock subscription. The entry to record the collection would include a:

		debit to Subscriptions ReceivableCommon Stock for $2,000.
		credit to Common Stock Subscribed for $2,000.
		credit to Common Stock for $2,000.
		credit to Subscriptions ReceivableCommon Stock for $2,000.

4

In the stockholders' equity section of a balance sheet:

		common stock is listed before preferred stock.
		common stock is listed after preferred stock.
		common stock is listed after retained earnings.
		common stock is not listed.

5

What is the entry to record subscriptions received for 1,700 shares of $100 par value common stock at $130 per share?

		Debit Common Stock Subscribed $221,000; credit Cash $221,000
		Debit Subscriptions Receivable-Common Stock $221,000; credit Common Stock Subscribed $170,000; credit Paid-in Capital in Excess of Par ValueCommon $51,000.
		Debit Subscriptions ReceivableCommon Stock $221,000; credit Common Stock Subscribed $221,000
		None of these answers is correct.