Question 1

If treasury stock is re-issued at a price less than its cost,the debit entry could include:

Accepted Answer

When treasury stock is re-issued at a price less than its cost, the debit entry should include both Paid-in Capital from Treasury Stock and Retained Earnings.

The entry would be:
Debit: Cash (for the amount received)
Debit: Paid-in Capital from Treasury Stock (for the excess of the cost over the selling price)
Debit: Retained Earnings (for any remaining balance)

Option A (Paid-in Capital from Treasury Stock) would be included because the sale of treasury stock for less than its cost reduces the balance of the Paid-in Capital from Treasury Stock account.

Option B (Retained Earnings) would be included because if the company sells treasury stock for less than its cost, it incurs a loss. This loss reduces the balance of Retained Earnings.

Question 2

Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings.This error would cause:

Accepted Answer

The error would cause the period's net income to be understated because the revenue was not recorded in the revenue account, which affects the income statement. Instead, it was incorrectly credited to Retained Earnings, bypassing the income statement entirely.

Question 3

Barkley's Resort had 2,000 shares of $20 par value common stock outstanding.On June 1,Barkley's purchased 200 shares of treasury stock for $21 per share and later reissued them for $22 per share.What amount of profit from the re-issuance will be reported on the income statement?

Accepted Answer

The profit from the re-issuance of treasury stock is not reported on the income statement. Instead, it is recorded as an increase in additional paid-in capital in the equity section of the balance sheet.

Question 4

A corporation purchased 35 shares of treasury stock for $40.The entry to record the transaction would include a:

Accepted Answer

When a corporation purchases its own stock, it is recorded as a debit to Treasury Stock and a credit to Cash. In this case, the corporation purchased 35 shares of treasury stock for $40, so the entry would be a debit to Treasury Stock for $1400 ($40 x 35) and a credit to Cash for $1400.

Question 5

Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding.
Journalize the following Baxter transactions for 20XX:

Accepted Answer

The answer of Baxter Corporation has 1,000 shares of $5...

Question 6

The payment of wages was debited to Retained Earnings.This error would cause:

Accepted Answer

The error would cause the period's net income to be overstated because wages, which are an expense, were not deducted from income. Instead, they were incorrectly debited to Retained Earnings, bypassing the income statement.

Question 7

When treasury stock is sold,the Paid-in Capital in Excess of Par Value is decreased.

Accepted Answer

When treasury stock is sold above its cost, the Paid-in Capital in Excess of Par Value is increased, not decreased.

Question 8

Treasury stock should usually be recorded at:

Accepted Answer

Treasury stock should be recorded at cost, which is the amount paid to repurchase the shares. This provides a more conservative approach to valuing the shares and reflects their true economic value to the company. The par or stated value, original issue price, and net realizable value are not relevant when recording treasury stock.

Question 9

If treasury stock is sold for less than cost,the entry to record the transaction would include a:

Accepted Answer

When treasury stock is sold for less than cost, the entry to record the transaction would include a credit to Treasury Stock for the original cost of the shares and a debit to either Retained Earnings (if the company uses the cost method) or Additional Paid-In Capital (if the company uses the par value method) for the difference between the original cost and the sales price. Therefore, the correct answer is B) credit to Treasury Stock.

Question 10

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

Accepted Answer

The reissued shares were sold for $20 per share but were reacquired for $15 per share. Therefore, the difference of $5 per share is recorded as an increase in the Paid-In Capital from Treasury Stock account. The entry would be:

Debit Cash $2,000 (100 shares x $20 per share)
Credit Treasury Stock-Common $1,500 (100 shares x $15 per share)
Credit Paid-In Capital from Treasury Stock $500 (100 shares x $5 per share)

Question 11

Sold treasury stock at a price below cost when there was no paid-in capital from treasury stock to absorb the difference between cost and selling price.
Debit ________ & ________ Credit ________

Accepted Answer

The answer of Sold treasury stock at a price below...

Question 12

Which of the following would be shown on the statement of retained earnings?

Accepted Answer

The statement of retained earnings reflects changes in a company's earnings that are kept (retained) within the company rather than paid out as dividends. Therefore, the declaration of a cash dividend would be shown on the statement of retained earnings, as it would reduce the amount of earnings that are being retained by the company. The purchase of treasury stock or sale of common stock or preferred stock would not directly impact the statement of retained earnings.

Question 13

Curtis Corporation's balance sheet included the following:
 $\begin{array}{l}
\text { Common Stock, } \$ 5 \text { par value, } 5,000 \text { shares issued }\
\begin{array}{lr}
\text { and outstanding } & \$ 25,000 \
\text { Retained Earnings } & 20,000 \
\text { Total Stockholders' Equity } & \$ 45,000
\end{array}
\end{array}$ 
Prepare journal entries for the following transactions:
 May $3 \quad$ Issued 500 shares at $\$ 6$ per share.
9 Reacquired 100 shares at $\$ 4$ per share.
Reissued 50 of the Treasury shares at $\$ 7$ per share.
17 Reissued 10 of the Treasury shares at $\$ 3$ per share.

Accepted Answer

The answer of Curtis Corporation's balance sheet included the following:
...

Question 14

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Accepted Answer

The entry to record the sale of treasury stock would include a debit to Cash for $800 (20 shares x $40 per share) and a credit to Treasury Stock for $600 (20 shares x $30 cost per share). The difference between the sale price and the cost per share is credited to Paid-in Capital from Treasury Stock, which in this case would be $200 (20 shares x [$40 selling price - $30 cost per share]). Therefore, the correct choice is C, credit to Paid-in Capital from Treasury Stock for $200.

Question 15

Sold treasury stock at a price equal to cost.
Debit ________ & Credit ________

Accepted Answer

The answer of Sold treasury stock at a price equal...

Question 16

Which of the following decrease when treasury stock is purchased?

Accepted Answer

Treasury stock represents shares of stock that a company has issued and then repurchased. When a company repurchases its own shares, the number of outstanding shares decreases, while the number of authorized and issued shares remains the same. Therefore, the correct answer is B, as outstanding shares decrease when treasury stock is purchased.

Question 17

Sold treasury stock at a price below cost when there was not enough paid-in capital from treasury stock to absorb the difference between cost and selling price.
Debit ________ & ________ & ________ Credit ________

Accepted Answer

The answer of Sold treasury stock at a price below...

Question 18

When O'Rourke Corporation sells treasury stock for more than the original cost:

Accepted Answer

When treasury stock is sold for more than the original cost, the excess amount received is recorded as additional paid-in capital, which increases the paid-in capital in stockholders' equity. There is no impact on retained earnings.

Question 19

When treasury stock is reissued for more than cost,the journal entry would include a:

Accepted Answer

When treasury stock is reissued for more than cost, the excess amount received over the cost is credited to "Paid-in Capital from Treasury Stock" account. Therefore, the journal entry should include a debit to "Cash" to record the amount received, a credit to "Treasury Stock" for the cost of the shares being reissued, and a credit to "Paid-in Capital from Treasury Stock" for the excess amount received over the cost. The option that includes a credit to "Paid-in Capital from Treasury Stock" is D.

Question 20

Sold treasury stock at a price below cost when there was sufficient paid-in capital from treasury stock to absorb the difference between cost and selling price.
Debit ________ & ________ Credit ________

Accepted Answer

The answer of Sold treasury stock at a price below...

Quiz 19: Corporations: Stock Values,dividends,treasury Stocks,

If treasury stock is re-issued at a price less than its cost,the debit entry could include:

Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings.This error would cause:

Barkley's Resort had 2,000 shares of $20 par value common stock outstanding.On June 1,Barkley's purchased 200 shares of treasury stock for $21 per share and later reissued them for $22 per share.What amount of profit from the re-issuance will be reported on the income statement?

A corporation purchased 35 shares of treasury stock for $40.The entry to record the transaction would include a:

Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding. Journalize the following Baxter transactions for 20XX:

The payment of wages was debited to Retained Earnings.This error would cause:

When treasury stock is sold,the Paid-in Capital in Excess of Par Value is decreased.

Treasury stock should usually be recorded at:

If treasury stock is sold for less than cost,the entry to record the transaction would include a:

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

Sold treasury stock at a price below cost when there was no paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit & Credit

Which of the following would be shown on the statement of retained earnings?

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Sold treasury stock at a price equal to cost. Debit & Credit

Which of the following decrease when treasury stock is purchased?

Sold treasury stock at a price below cost when there was not enough paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit & & Credit

When O'Rourke Corporation sells treasury stock for more than the original cost:

When treasury stock is reissued for more than cost,the journal entry would include a:

Sold treasury stock at a price below cost when there was sufficient paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit & Credit

Quiz 19: Corporations: Stock Values,dividends,treasury Stocks,

If treasury stock is re-issued at a price less than its cost,the debit entry could include:

Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings.This error would cause:

Barkley's Resort had 2,000 shares of $20 par value common stock outstanding.On June 1,Barkley's purchased 200 shares of treasury stock for $21 per share and later reissued them for $22 per share.What amount of profit from the re-issuance will be reported on the income statement?

A corporation purchased 35 shares of treasury stock for $40.The entry to record the transaction would include a:

Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding. Journalize the following Baxter transactions for 20XX:

The payment of wages was debited to Retained Earnings.This error would cause:

When treasury stock is sold,the Paid-in Capital in Excess of Par Value is decreased.

Treasury stock should usually be recorded at:

If treasury stock is sold for less than cost,the entry to record the transaction would include a:

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

Sold treasury stock at a price below cost when there was no paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit ________ & ________ Credit ________

Which of the following would be shown on the statement of retained earnings?

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Sold treasury stock at a price equal to cost. Debit ________ & Credit ________

Which of the following decrease when treasury stock is purchased?

Sold treasury stock at a price below cost when there was not enough paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit ________ & ________ & ________ Credit ________

When O'Rourke Corporation sells treasury stock for more than the original cost:

When treasury stock is reissued for more than cost,the journal entry would include a:

Sold treasury stock at a price below cost when there was sufficient paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit ________ & ________ Credit ________

Sold treasury stock at a price below cost when there was no paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit & Credit

Sold treasury stock at a price equal to cost. Debit & Credit

Sold treasury stock at a price below cost when there was not enough paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit & & Credit

Sold treasury stock at a price below cost when there was sufficient paid-in capital from treasury stock to absorb the difference between cost and selling price. Debit & Credit