Question 1

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 its cost, the entry includes a credit to Treasury Stock for the cost of the shares. The difference between the selling price and the cost (if not adjusted through additional paid-in capital) reflects a decrease in equity.

Question 2

The portion of Retained Earnings that is NOT available for dividends is:

Accepted Answer

Appropriated Retained Earnings are specifically set aside for a particular use and are not available for dividend distribution. This can be for legal, contractual, or discretionary reasons.

Question 3

Which of the following decrease when treasury stock is purchased?

Accepted Answer

When treasury stock is purchased, the number of outstanding shares decreases because treasury shares are shares that were issued and then reacquired by the company, reducing the amount of stock in the hands of the public.

Question 4

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transactions.
-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 Using the following accounts:
Indicate the account(s) to...

Question 5

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

Accepted Answer

When treasury stock is reissued at a price less than its cost, the company can debit the difference to Paid-in Capital from Treasury Stock if there is a sufficient balance. If not, the company debits the shortfall to Retained Earnings. Thus, both A and B are correct.

Question 6

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

Accepted Answer

When O'Rourke Corporation sells treasury stock for more than its original cost, the excess amount over the cost is credited to paid-in capital, thus increasing stockholders' equity in the paid-in capital category. Retained earnings are not affected by treasury stock transactions.

Question 7

Barkley's Resort had 2,800 shares of $21 par value common stock outstanding. On June 1, Barkley's purchased 230 shares of treasury stock for $29 per share and later reissued them for $26 per share. What amount of profit from the reissuance will be reported on the income statement?

Accepted Answer

When treasury stock is reissued, any difference between its purchase and sale price does not result in a profit or loss on the income statement. Instead, it is recorded in the equity section of the balance sheet.

Question 8

Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Accepted Answer

The correct entry is to debit Cash for the total amount received from the reissue ($24 x 120 shares = $2,880), credit Treasury Stock for the cost of the shares when they were reacquired ($11 x 120 shares = $1,320), and credit Paid-In Capital from Treasury Stock for the difference ($2,880 - $1,320 = $1,560). This reflects the inflow of cash, the reduction of treasury stock at cost, and the recognition of the excess received over cost as additional paid-in capital.

Question 9

Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding.
Journalize the following Baxter transactions for 20XX:
Feb. 1 Purchased 200 shares of treasury stock at $6.00.
20 Declared a $2.00 per share cash dividend payable on March 15
to stockholders of record March 1.
Mar. 15 Paid the cash dividend.
May 10 Declared a 10% stock dividend. The market value of the stock is $15.00 per share.
May 30 Distributed the stock dividend.
Jun 10 Reissued the treasury stock for $9.00.

Accepted Answer

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

Question 10

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transactions.
-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 Using the following accounts:
Indicate the account(s) to...

Question 11

Treasury stock should usually be recorded at:

Accepted Answer

Treasury stock, which represents shares repurchased by the company, is typically recorded at the cost at which the shares were bought back. This method reflects the actual cash outflow associated with the repurchase.

Question 12

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

Accepted Answer

The declaration of a cash dividend is shown on the statement of retained earnings as it reduces the retained earnings balance.

Question 13

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 its cost, the excess over cost is credited to Paid-in Capital from Treasury Stock.

Question 14

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transactions.
-Sold treasury stock at a price equal to cost.
Debit ________ & Credit ________

Accepted Answer

The answer of Using the following accounts:
Indicate the account(s) to...

Question 15

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transactions.
-Sold treasury stock at a price above cost.
Debit ________ Credit ________ & ________

Accepted Answer

The answer of Using the following accounts:
Indicate the account(s) to...

Question 16

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

Accepted Answer

When treasury stock is sold above its cost, the excess amount over the cost is credited to Paid-in Capital in Excess of Par Value, increasing this equity account.

Question 17

What is the entry to restrict $40,000 for plant expansion?

Accepted Answer

To restrict funds for a specific purpose like plant expansion, you would reclassify part of retained earnings to an appropriated account, hence debit Retained Earnings and credit Retained Earnings Appropriated for plant expansion.

Question 18

A corporation purchased 110 shares of treasury stock for $45. The entry to record the transaction would include a:

Accepted Answer

The correct entry for purchasing treasury stock involves debiting (increasing) the Treasury Stock account by the total purchase amount, which is calculated as 110 shares times $45 per share, equaling $4,950.

Question 19

Curtis Corporation's balance sheet included the following:
Common Stock, $5 par value, 5,000 shares issued  Prepare journal entries for the following transactions:

Accepted Answer

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

Question 20

A corporation sold 70 shares of $21 par value treasury stock for $40 per share. The treasury stock cost $32 per share to acquire. The entry to record the transaction would include a:

Accepted Answer

The corporation sold the treasury stock for $40 per share, which is $8 more than the cost of $32 per share. For 70 shares, this results in a gain of $560 (70 shares x $8), which is credited to Paid-in Capital from Treasury Stock.

Quiz 19: Corporations: Stock Values, Dividends, Treasury Stocks,

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

The portion of Retained Earnings that is NOT available for dividends is:

Which of the following decrease when treasury stock is purchased?

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -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

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

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

Barkley's Resort had 2,800 shares of $21 par value common stock outstanding. On June 1, Barkley's purchased 230 shares of treasury stock for $29 per share and later reissued them for $26 per share. What amount of profit from the reissuance will be reported on the income statement?

Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -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

Treasury stock should usually be recorded at:

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

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

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price equal to cost. Debit & Credit

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price above cost. Debit Credit &

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

What is the entry to restrict $40,000 for plant expansion?

A corporation purchased 110 shares of treasury stock for $45. The entry to record the transaction would include a:

Curtis Corporation's balance sheet included the following: Common Stock, $5 par value, 5,000 shares issued Prepare journal entries for the following transactions:

A corporation sold 70 shares of $21 par value treasury stock for $40 per share. The treasury stock cost $32 per share to acquire. The entry to record the transaction would include a:

Quiz 19: Corporations: Stock Values, Dividends, Treasury Stocks,

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

The portion of Retained Earnings that is NOT available for dividends is:

Which of the following decrease when treasury stock is purchased?

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

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

Barkley's Resort had 2,800 shares of $21 par value common stock outstanding. On June 1, Barkley's purchased 230 shares of treasury stock for $29 per share and later reissued them for $26 per share. What amount of profit from the reissuance will be reported on the income statement?

Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Treasury stock should usually be recorded at:

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

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

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price equal to cost. Debit ________ & Credit ________

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price above cost. Debit ________ Credit ________ & ________

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

What is the entry to restrict $40,000 for plant expansion?

A corporation purchased 110 shares of treasury stock for $45. The entry to record the transaction would include a:

Curtis Corporation's balance sheet included the following: Common Stock, $5 par value, 5,000 shares issued Prepare journal entries for the following transactions:

A corporation sold 70 shares of $21 par value treasury stock for $40 per share. The treasury stock cost $32 per share to acquire. The entry to record the transaction would include a:

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price equal to cost. Debit & Credit

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price above cost. Debit Credit &