-Milton Corporation has 20,000 shares of $5 par-value common stock and 60,000 shares of 9%, $2 par-value preferred stock issued and outstanding. The preferred stock is cumulative. How much are preferred dividends per year?

a. $10,800.

b. $120,000.

c. $100,000.

d. $9,000.

- Media Services' accounting records reflected the following journal entry:

Nov. 1 Cash 14,000

Common Stock ($1 Par) 2,000

Paid-in Capital in Excess of

Par Value 12,000

From the entry, one can conclude that the company:

a. earned $14,000 of revenue.

b. has a $12,000 gain on the sale of its stock.

c. has a $12,000 increase in total paid-in capital.

d. sold 2,000 shares of common stock at $7 per share.

-How is treasury stock shown in the financial statements?

a. As an asset.

b. As a reduction of paid-in capital.

c. As a reduction of total stockholders' equity.

d. It depends on the reason that the treasury stock was acquired.

-Prost Products has excelled on past treasury stock transactions, selling the stock at above cost resulting in a balance of $1,250 in Paid in Capital from Treasury Stock account. Currently, the company is holding 460 shares of its $2 par-value common stock, reacquired for $2,000. If the stock is reissued for $500, what journal entry will the company's accountant make?

a. Cash 500

Treasury Stock 500

b. Cash 500

Loss on Treasury Stock 1,500

Treasury Stock 2,000

c. Cash 500

Paid-in Capital from Treasury Stock 1,500

Treasury Stock 2,000

d. Cash 500

Paid-in Capital from Treasury Stock 1,250

Retained Earnings 250

Treasury Stock 2,000