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  51) Prepare the journal entries for Mayhem Manufacturing: June 10 Incurred organization costs totaling $7,500 June 14Issued 10,000 shares of $11 par value common stock for $120,000 June 22Issued 3,000 shares of 7%, $30 par value preferred stock for $120,000 52) Prepare the journal entries for Mayhem Manufacturing: July 21Issued 7,000 shares of $10 par common stock for $85,000. July 29Issued 2,500 shares of 7%, $35 par preferred stock for equipment with a fair market value of $95,000.    

  19.1   Learning Objective 19-1 1) Market Value is defined as: A) the price a corporation pays when it reserves the right to retire or redeem stock at a specific price. B) the price at which shares are bought and sold on the open market. C) the total stockholders' equity minus total amount assigned to preferred stock D) the total of stockholders' equity (when only common stock exists) divided by the number of shares issued. 2) Book Value per Share is defined as: A) the price a corporation pays when it reserves the right to retire or redeem stock at […]

  16.2   Learning Objective 16-2 1) The cost of equipment is expensed: A) at the time it is paid. B) over the periods that benefit the company. C) in the period it is purchased. D) in the period it is sold. 2) In the last year of useful life, the salvage value was ignored using double declining-balance depreciation. This error would cause: A) the period's end assets to be overstated. B) the period's depreciation expense to be understated. C) the period end assets to be understated. D) None of these is correct. 3) When calculating declining balance depreciation, the straight-line […]

21) Robert Rogers, CPA, performed accounting services for a client in December. A bill was mailed to the client on December 30. Roberts received the client's check by mail on January 5. Which of the following accounts should appear on the income statement for the year ended December 31 as per the revenue recognition principle? A) Service Revenue B) Unearned Revenue C) Accounts Payable D) Prepaid Expense 22) Robert Rogers, CPA, performed accounting services for a client in December. A bill was mailed to the client on December 30. Roberts received a check by mail on January 5. As per […]

Learning Objective 1-3 1) Liabilities represent creditors' claims on the business's assets. 2) The left side of the accounting equation measures the amount that the business owes to creditors and to the owner. 3) The total of amount of assets that a business possesses, may or may not equal the total of liabilities and equity of the business. 4) Equity increases when revenues are earned. 5) Equity decreases with expenses and revenues. 6) Owner's withdrawals are the expenses of a business. 7) A debt that a business owes to an outside party is called: A) an asset. B) a liability. […]