Question 41

On January 1, Sanford Corporation had 100,000 shares of $8 par value common stock outstanding. On June 17, the company declared a 9% stock dividend to stockholders of record on June 20. Market value of the stock was $37 on June 17. The stock was distributed on June 30. The entry to record the transaction of June 30 would include a

	A.	credit to Paid-in Capital in Excess of Par Value for $261,000.
	B.	debit to Common Stock Dividends Distributable for $333,000.
	C.	debit to Retained Earnings for $261,000.
	D.	credit to Common Stock for $72,000.

Question 42

A credit balance in retained earnings represents

	A.	a claim on specific assets of the corporation.
	B.	the amount of stockholders' equity exempted from the stockholders' claim on total assets.
	C.	the amount of cash retained in the business.
	D.	a claim on the aggregate assets of the corporation

Question 43

Rebel Inc. issued 4,800 shares of no-par common stock with a stated value of $1 per share. The market price of the stock on the date of issuance was $3 per share. The entry to record this transaction includes a

	A.	credit to Common Stock for $4,800.
	B.	debit to Cash for $4,800.
	C.	debit to Paid-in Capital in Excess of Par Value for $14,400.
	D.	credit to Common Stock for $14,400.

Question 44

On January 1, Swanson Corporation had 50,000 shares of $9 par value common stock outstanding. On March 17, the company declared a 14% stock dividend to stockholders of record on March 20. Market value of the stock was $16 on March 17. The entry to record the transaction of March 17 would include a

	A.	credit to Common Stock Dividends Distributable for $63,000
	B.	credit to Retained Earnings for $49,000.
	C.	debit to Common Stock Dividends Distributable for $63,000.
	D.	credit to Cash for $112,000.

Question 45

On January 1, Swanson Corporation had 74,000 shares of $7 par value common stock outstanding. On March 17, the company declared a 9% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a

	A.	credit to Paid-in Capital in Excess of Par Value for $39,960
	B.	credit to Cash for $46,620.
	C.	debit to Retained Earnings for $39,960.
	D.	debit to Common Stock Dividends Distributable for $46,620.

Question 46

A corporation purchases 10,000 shares of its own $10 par common stock for $15 per share, recording it at cost. What will be the effect on total stockholders' equity?

	A.	Decrease by $150,000
	B.	Increase by $150,000
	C.	Decrease by $100,000
	D.	Increase by $100,000

Question 47

If stock is issued for less than par value, the account

	A.	Paid-In Capital in Excess of Par Value is credited.
	B.	Paid-In Capital in Excess of Par Value is debited if a credit balance exists in the account.
	C.	Paid-In Capital in Excess of Par Value is debited if a debit balance exists in the account.
	D.	Retained Earnings is credited.

Question 48

The acquisition of treasury stock by a corporation

	A.	decreases its total assets and total stockholders' equity.
	B.	requires that a gain or loss be recognized on the income statement.
	C.	increases its total assets and total stockholders' equity.
	D.	has no effect on total assets and total stockholders' equity.

Question 49

Retro Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Retro issues 5,000 shares of common stock to pay its recent attorney's bill of $20,000 for legal services on a land access dispute, which of the following would be the journal entry for Retro to record?

A.

Legal Expense

20,000

	Common Stock		5,000
	Paid-in Capital in Excess of Stated Value Common		15,000

B.

Legal Expense

5,000

Common Stock

5,000

C.

Legal Expense

20,000

	Common Stock		5,000
	Paid-in Capital in Excess of Par Preferred		15,000

D.

Legal Expense

20,000

Common Stock

20,000

Question 50

The two ways that a corporation can be classified by purpose are

	A.	general and limited.
	B.	state and federal.
	C.	publicly held and privately held.
	D.	profit and not-for-profit.