Question
Question 7 part a: A corporation issues 5,000 shares of common stock at a price of $20 per share. Suppose further that the par value
Question 7 part a: A corporation issues 5,000 shares of common stock at a price of $20 per share. Suppose further that the par value per share of the common stock is $4. The journal entry to record this would include ________.
a | a debit to Common Stock for $80,000 | |
b | a credit to Common Stock for $80,000 | |
c | a debit to Treasury Stock for $80,000 | |
d | a credit to Treasury Stock for $80,000 | |
e | a credit to Paid-in Capital in Excess of Par Value for $80,000 |
b: A corporation pays a dividend of $80,000 that it had declared three weeks earlier. The journal entry to record this would include ________.
a | a debit to Dividends for $80,000 | |
b | a credit to Dividends for $80,000 | |
c | a debit to Dividends Payable for $80,000 | |
d | a credit to Dividends Payable for $80,000 | |
e | a debit to Cash for $80,000 |
c: Both trading securities and available-for-sale securities are reported on the balance sheet at fair value; which of the following are the correct statements regarding the reporting of unrealized holding gains and/or losses related to these two types of securities?
a | Unrealized holding gains/losses for trading securities are reported on the income statement as part of net income; those gains/losses related to available-for-sale securities are reported on the balance sheet as a component of shareholders' equity. | |
b | Unrealized holding gains/losses for trading securities are reported on the balance sheet as a component of shareholders' equity; those gains/losses related to available-for-sale securities are reported on the income statement as part of net income. | |
c | Unrealized holding gains/losses for both trading securities and available-for-sale securities are reported on the income statement as part of net income. | |
d | Unrealized holding gains/losses for both trading securities and available-for-sale securities are reported on the balance sheet as a component of shareholders' equity. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started