19.1   Learning Objective 19-1   1) The price a corporation pays when it reserves the right to retire or redeem stock at a specific price is the: A) redemption value. B) book value per share. C) dividend per share. D) market value.   2) The price at which shares are bought and sold on the open market is called: A) book value. B) dividend value. C) market value. D) redemption value.   3) When the corporation has only common stock, the total of stockholders' equity divided by the number of shares issued equals: A) redemption value. B) […]

  13) When O'Rourke Corporation sells treasury stock for more than the original cost: A) stockholders' equity increases. B) paid-in capital increases. C) retained earnings may increase. D) retained earnings may decrease. 14) 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) $400 B) $200 C) $100 D) $0   15) Treasury stock should usually be recorded at: A) par […]

  21) The proceeds of a discounted note are the face value less the bank discount. 22) On June 1, Mike's Motorcycle Shop accepted a 120-day, 8%, $10,000 note from a customer from the sale of a motorcycle. On July 1, after 30 days, Mike discounted the note at First Bank at 10%. Record the journal entries for Mike's Motorcycles.   23) Chase Hunford negotiated a $40,000 bank loan for 240 days at a bank rate of 10%. The bank deducted the interest in advance. Required (show your calculations): a) Calculate the amount of interest charged by the bank. b) […]

  8) On November 10, Twister Rides issued a 14%, 90-day, $15,000 promissory note. Twister should record the payment of the note on the maturity day as: A) debit Notes Payable $15,525; credit Cash $15,525. B) debit Notes Payable $15,000; debit Interest Payable $525; credit Cash $15,525. C) debit Notes Payable $15,000; debit Interest Expense $525; credit Cash $15,525. D) debit Notes Payable $15,000; credit Cash $15,000.   9) Straight Company sold merchandise to Cross Company and received a promissory note from Cross. Straight should record the transaction as: A) debit Notes Receivable and credit Sales for the principal amount […]

  41) Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system.   April1 Beginning inventory20 units @ $30 11 Purchases70 units @ $32 21 Purchases50 units @ $35   Sales for April: 115 units   a) ________ FIFO b) ________ LIFO c) ________ Weighted-average   42) The ________ holds the merchandise of another business to be sold.   43) If merchandise is purchased ________, the buyer becomes the owner when the merchandise is placed on the carrier.   44) Items that […]