QUESTION 21

Transnational Company just started in business and was looking for additional capital in order to purchase a property to build their headquarters. They found an investor who was willing to sell them land worth $500,000 in exchange for stock in the company. How would this transaction be shown on the statement of cash flows?

		In the investing activities section
		In the noncash investing and financing activities section
		In the operating activities section
		In the financing activities section

3 points

QUESTION 22

A corporation declares a dividend of $.75 per share on 12,500 shares of common stock. Which of the following would be included in the entry to record the declaration?

		Retained earnings would be debited for $9,375.
		Paid-in capital in excess of par would be credited for $9,375.
		Retained earnings would be credited for $9,375.
		Dividends payable would be debited for $9,375.

3 points

QUESTION 23

On July 1, 2013, Avery Services issued a long-term note payable for $10,000. It is payable over a 5-year term in $2,000 installments on July 1 of each succeeding year. When the note was issued, the principal amount was recorded in long-term notes payable and a second entry was made to reclassify the current portion. How will this information be shown on the balance sheet dated December 31, 2013?

		$10,000 shown as current liability only
		$2,000 shown as current liability; $10,000 shown as long-term liability
		$2,000 shown as current liability; $8,000 shown as long-term liability
		The entire $10,000 shown as long-term liability

3 points

QUESTION 24

Which of the following occurs due to a 4-for-1 stock split?

		The par value of each share of common stock is 25% of the par value before the split.
		The par value of each share of common stock is 200% of the par value before the split.
		The par value of each share of common stock remains the same as before the split.
		The par value of each share of common stock is 400% of the par value before the split.

3 points

QUESTION 25

A $20,000, 3-month, 8% note payable was issued on November 1, 2015. What is the amount of interest expense recorded in the year 2016?

		$800
		$133
		$200
		$267