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The preemptive right of shareholders is the right to: (a) Purchase shares ofstock on a proportionate basis when any new stock 11. (b) (c) (d)

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The preemptive right of shareholders is the right to: (a) Purchase shares ofstock on a proportionate basis when any new stock 11. (b) (c) (d) issues are offered for sale. Share equally in dividend distributions. Participate in the management of the corporation. Share in the distribution of assets on liquidation of the corporation. Gains and losses on the purchase and resale of common treasury stock should be reflected in the financial statements as: (a) Gains and losses on the income statement. (b) Unrealized gains and losses on the balance sheet as a reduction of 12. stockholders' equity. Additions to or reductions of additional paid in capital accounts or retained earnings. Additions to or reductions of the common stock account. (c) (d) Oslo Corporation had 200,000 shares of its $5 par value common stock outstanding on July 1, 20XO. On this date, the company repurchased 5,000 of its shares in the open market at $15 per share. The company uses the cost method to account for treasury stock transactions. As a result of this purchase of treasury stock: 13. (a) (b) (c) Total assets and total stockholders' equity decreased. Total assets increased and total stockholders' equity decreased. Total assets and total stockholders' equity increased Total assets and total stockholders' equity did not change. (d) A company acquired some of its own common shares at a price greater than both their par value and original issue price but less than their book value. 14. The company uses the cost method to account for treasury stock. What is the effect of this transaction on total stockholders' equity and the book value per common share? Total Stockholders' Equity Book Value Per Share Increase Decrease Decrease Increase Increase Increase Decrease Decrease Helsinki Corporation incurred $8,000 of bond issuance costs when it issued, on August 1, 20X0, ten year debenture bonds dated July 1, 20X0. What amount of bond issue expense should Helsinki report in its income statement for the year ended December 31, 20X0? (a) 400. (b) S800. (c) $8,000. (d) 333. 15

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