1. The trial balance of Houston Inc. includes the following balances: Common Stock, $28,000; Paid-in Capital in Excess of Par, $64,000; Treasury Stock, $6,000; Preferred Stock, $30,000. Capital stock totals (Points : 2) $58,000.
2. Under IFRS, the term reserves relates to each of the following except (Points : 2) asset revaluations.
contributed (paid-in) capital.
fair value differences.
3. Five thousand shares of treasury stock of Marker, Inc., previously acquired at $14 per share, are sold at $20 per share. The entry to record this transaction will include a (Points : 2) credit to Treasury Stock for $100,000.
debit to Paid-In Capital from Treasury Stock for $30,000.
debit to Treasury Stock for $70,000.
credit to Paid-In Capital from Treasury Stock for $30,000.
4. Which of the following is not true of a corporation? (Points : 2) It may buy, own, and sell property.
It may sue and be sued.
The acts of its owners bind the corporation.
It may enter into binding legal contracts in its own name.
5. If Vickers Company issues 4,000 shares of $5 par value common stock for $140,000, (Points : 2) Common Stock will be credited for $140,000.
Paid-In Capital in Excess of Par will be credited for $20,000.
Paid-In Capital in Excess of Par will be credited for $120,000.
Cash will be debited for $120,000.
6. Bacon Corporation began business by issuing 150,000 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $25,000. The year-end balance sheet would show (Points : 2) Common stock of $750,000.
Common stock of $3,750,000.
Total paid-in capital of $3,725,000.
Total paid-in capital of $775,000.
7. A corporation has the following account balances: Common stock, $1 par value, $60,000; Paid-in Capital in Excess of Par, $1,300,000. Based on this information, the (Points : 2) legal capital is $1,360,000.
number of shares issued are 60,000.
number of shares outstanding are 1,360,000.
average price per share issued is $22.50.
8. Crain Company issued 2,000 shares of its $5 par value common stock in payment of its attorney’s bill of $40,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting (Points : 2) Legal Expense for $10,000.
Legal Expense for $40,000.
Organization Expense for $10,000.
Organization Expense for $40,000.
9. Treasury stock is generally accounted for by the (Points : 2) cost method.
market value method.
par value method.
stated value method.
10. If no-par stock is issued without a stated value, then (Points : 2) the par value is automatically $1 per share.
the entire proceeds are considered to be legal capital.
there is no legal capital.
the corporation is automatically in violation of its state charter.