QUESTION 6

Chaney Corporation issued 20,000 shares of common stock on January 1, 2014. The stock has par value of $1.00 per share and was sold at $30 per share. The journal entry for this transaction would:

		credit Cash $600,000, debit Common stock $20,000, and debit Paid-in capital $580,000.
		debit Cash $600,000 and credit Paid-in capital $600,000.
		debit Cash $600,000, credit Common stock $20,000, and credit Paid-in capital $580,000.
		debit Cash $600,000 and credit Common stock $600,000.

3 points

QUESTION 7

Refer to the following information for Peartree Company:

Common stock, $1.00 par, 100,000 issued, 95,000 outstanding

Paid-in capital in excess of par: $2,150,000

Retained earnings: $910,000

Treasury stock: 5,000 shares purchased at $20 per share

If Peartree resold 800 shares of treasury stock for $15 per share, which of the following statements would be TRUE?

		The total equity of the company would be unchanged.
		The total equity of the company would go up by $12,000.
		The total equity of the company would go down by $12,000.
		The total equity of the company would go down by $4,000.

3 points

QUESTION 8

Sales revenue for a sporting goods store amounted to $215,000 for the current period. All sales are on account and are subject to a sales tax of 7%. Which of the following would be included in the journal entry to record these sales?

		A debit to Sales revenue for $215,000
		A credit to Accounts receivable for $215,000
		A debit to Sales tax payable for $15,050
		A debit to Accounts receivable for $230,050

3 points

QUESTION 9

On December 31, 2013, Peterson Sales has a bonds payable balance of $40,000 and a premium on bonds payable of $900. On the balance sheet, how will this information be shown?

		$40,000 less premium of $900 for a net balance of $39,100
		$40,000 less one-tenth of $900 for a net balance of $39,910
		$40,000 only
		$40,000 plus a premium of $900 for a net balance of $40,900

3 points

QUESTION 10

In which of the following periods should the expense for warranty costs be recorded?

		The period when the product is sold
		The period when the product is repaired or replaced
		The period when cash is paid to repair or replace the product
		The period when cash is collected for the sale of the product