Info
Warning
Danger
/ Homework Answers / Accounting / Learning Objective 13-2 1) When a corporation sells 10,000 shares of

Question : Learning Objective 13-2 1) When a corporation sells 10,000 shares of

Learning Objective 13-2

1) When a corporation sells 10,000 shares of $10 par value common stock for $120,000, the Common Stock account is credited for $100,000.

2) Stock sold for amounts in excess of par value results in a gain reported on the income statement.

3) The price that the corporation receives from issuing stock is called the issue price.

4) When a company sells stock for less than the par value, it will record a gain on sale for the amount in excess of par.

5) Most corporations set par value low and issue common stock for a price above par called a premium.

6) A company cannot report a gain or loss when buying or selling its own stock.

7) Which of the following would be included in the entry to record the issuance of 5,000 shares of $10 par value common stock at $13 per share cash?

A) Cash would be debited for $65,000.

B) Common Stock would be debited for $50,000.

C) Common Stock would be credited for $65,000.

D) Paid-In Capital in Excess of Par—Common would be debited for $15,000.

8) Which of the following occurs when a shareholder invests cash in a corporation in exchange for stock?

A) Both liabilities and stockholders' equity are increased.

B) Both assets and stockholders' equity are increased.

C) One asset is increased and another asset is decreased.

D) Both assets and liabilities are increased.

9) The following information is from the balance sheet of Lawson Corporation as of December 31, 2015.

Preferred Stock, $100 par

$500,000

Paid-in Capital In Excess of Par—Preferred

35,000

Common Stock, $1 par

170,000

Paid-in Capital in Excess of Par—Common

510,000

Retained Earnings

131,500

Total Stockholders' Equity

$1,346,500

What was the average issue price of the common stock shares?

A) $1.90

B) $1.00

C) $3.00

D) $4.00

10) The following information is from the balance sheet of Jackson Corporation as of December 31, 2015.

Preferred Stock, $100 par

$200,000

Paid-in Capital in Excess of Par—Preferred

14,000

Common Stock, $1 par

68,000

Paid-in Capital in Excess of Par—Common

203,000

Retained Earnings

52,600

Total Stockholders' Equity

$537,600

What is the average issue price of the preferred stock shares?

A) $107

B) $100

C) $176

D) $105

Solution
5 (1 Ratings )

Solved
Accounting 5 Months Ago 6 Views
This Question has Been Answered!
Premium Content -

Unlimited Access

Explore More than 2 Million+
  • Textbook Solutions
  • Flashcards
  • Homework Answers
  • Documents
Signup for Better Grades!

Ask an Expert

Our Experts can answer your tough homework and study questions
125734 Accounting Questions Answered!
Post a Question