Question
-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
-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
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