Multiple choice and explain the answer

1.Entity A received a subscription for 2,000 shares at $18 per share on March 31,20x1. Entity A collected the subscription receivable on May 15,20x1. Which of the following statement is correct?

A. Entity A should credit share premium for $13,000 on March 31, 20x1

B. Entity A should credit share premium for $26,000 on March 31, 20x1

C. Entity A should credit share premium for $13,000 on March 15, 20x1

D. Entity A should credit share premium for $26,000 on March 15, 20x1

>choose the correct answer and explain <

2.Entity A has the following share capital transactions during the year:

. Issued 10,000 shares with a par value of $10 per share for a total consideration of $160,000.

. Received share subscriptions for 20,000 shares at a subscription price of $22 per share. Only half of the subscriptions were collected by the end of the year.

How much is the total share premium arising from the share transactions above?

A. 60,000

B. 320,000

C. 300,000

D. 180,000

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3.Entity A was incorporated on January 1, 20x1 with an authorized capitalization is $1,000,000 divided into 100,000 shares with a par valueof $10 per share. The following were the share-related transactions of Entity A during the year:

. Cash subscriptions of 30,000 shares at $12 per share.

. Subscriptions of 40,000 shares at $18 per share. Seventy-five percent of the subscription price was collected during the year.

How much is the Entity A's total shareholders equity after recording the transaction above?

A. 900,000

B. 680,000

C. 540,000

D. 360,000

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4.Entity A's total shareholder's equity was $900,000 before recording the following share transactions:

.Received cash subscriptions for 10,000 shares with par value of $1 at $14 per share. Share issuance cost amounted to $2,000

. Received subscription for 20,000 shares at $20 per share. Twenty-five percent down payment was collected on subscription date.

. Collected the remaining unpaid subscription price of 15,000 subscribed shares and issued the related share certificates. Share issuance cost amounted to $3,000

How much is the balance of Entity A's total shareholder's equity after recording the transaction above? (Hint: preparing journal entries makes this problem easier to solve)

A. 1,490,000

B. 1,510,000

C. 1,360,000

D. 1,610,000

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5.On February 26. 20x1 Entity A acquires 10,000 of its own shares for $3 per share. The shares have a par value of $1 and were selling in the stock market at $4 per share on this date. To record the reacquisition, Entity A should

A. debit Treasury share account for $30,000

B. credit Treasury share account for $30,000

C. debt share premium account for $10,000

D. credit Treasury shares account for $40,000

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6.Two years ago .Entity A reacquired 2,000 of its own shares with par value of $100 per share for $240,000. Today, Entity A reissues half of the treasury shares at $160 per share .The journal entry to record the reissuance include which of the following?

A. Credit to RETAINED EARNIGS - UNRESTRICTED ACCOUNT FOR 240,000

B. Debit to Treasury shares account for $ 120,000

C. Credit to share premium- Treasury shares for $80,000

D. Credit to Share premium-treasury shares for $40,000

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7.Entity A reacquires 10,000 of its own shares for $50. The shares have par value of $10 and were originally issued at $15 per share. Subsequently, Entity A reissues the10,000 shares at $48 per share .The journal entry to record the reissuance involves which of the following?

A. Debit to RETAINED EARNINGS FOR $20,000

B. Credit to CASH for 480,000

C. Debit to SHARE PREMIUM for $50,000

D. Debit to TREASURY SHARES for $500,000

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8.Entity A reacquires 10,000 of its own share for $50. The shares have par value of $10 and wee originally issued at $15 per share. Subsequently ,Entity A reissues half of the reacquired shares at $58 per share and then retires the other half. The journal entry to record the Retirement of the shares include which of the following?(HINT: provide the entries for both the reissuance and the retirement)

A. Debit to RETAINED EARNINGS for $175,000

B. Credit to SHARE PREMIUM-RETIREMENT for 40,000

C. Debit to SHARE PREMIUM for $50,000

D. Debit to RETAINED EARNINGS for $135,000

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9.Entity A reacquires 1,000 of its own shares for $25 and immediately retires theme. The shares have par value of $10 and were originally issued at $30 per share. The journal entry to record the retirement of the shares includes which of the following?

A. Debit to RETAINED EARNINGS for $5,000

B. Credit to TREASURY SHARES for $30,000

C. Credit to SHARE CAPITAL for $10,000

D. Credit to SHARE PREMIUM-RETIREMENT for $500,000

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10.Entity A receives 20,000 shares with par value of $100 and fair value of $210 on November 2,20x1 . How much additional capital is recognized in Entity A's December 31,20x1 balance sheet as having resulted from the receipt of the donated shares?

A. 2,000,000

B.4,200,000

C.4,400,000

D. 0

>choose the correct answer and explain <