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RKJ Company has provided the following information: • 100,000 shares of $5 par value common stock are authorized • 70,000 shares have been issued • 65,000 shares are outstanding - Which of the following statements is correct?


A) RKJ can issue an additional 30,000 shares of treasury stock.
B) RKJ has 30,000 shares of treasury stock.
C) RKJ can resell 5,000 shares of treasury stock.
D) RKJ can issue an additional 35,000 shares of common stock.

E) B) and C)
F) None of the above

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DRP,Inc.issued 50,000 shares of its own $50 par value preferred stock for cash of $110 per share,and issued 200,000 shares of its no-par common stock for cash of $40 per share. Prepare the required journal entries for the issuance of each class of stock.

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Which of the following is true about a sole proprietorship?


A) The capital account is used to record only the investments of the owner.
B) The drawing account records distribution of assets to the proprietor.
C) A sole proprietorship is a separate legal entity from the owner.
D) A sole proprietorship is subject to a business income tax.

E) None of the above
F) B) and D)

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On February 1,2018,Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury.On April 10,2019,Cue resold all the treasury shares for $50 per share.Which of the following entries would be recorded when Cue Company resells the shares of treasury stock?


A) On February 1,2018,Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury.On April 10,2019,Cue resold all the treasury shares for $50 per share.Which of the following entries would be recorded when Cue Company resells the shares of treasury stock? A) B) C) D)
B) On February 1,2018,Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury.On April 10,2019,Cue resold all the treasury shares for $50 per share.Which of the following entries would be recorded when Cue Company resells the shares of treasury stock? A) B) C) D)
C) On February 1,2018,Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury.On April 10,2019,Cue resold all the treasury shares for $50 per share.Which of the following entries would be recorded when Cue Company resells the shares of treasury stock? A) B) C) D)
D) On February 1,2018,Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury.On April 10,2019,Cue resold all the treasury shares for $50 per share.Which of the following entries would be recorded when Cue Company resells the shares of treasury stock? A) B) C) D)

E) All of the above
F) B) and C)

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Which of the following journal entries is correct when no-par common stock is initially issued for cash?


A) Which of the following journal entries is correct when no-par common stock is initially issued for cash? A) B) C) D)
B) Which of the following journal entries is correct when no-par common stock is initially issued for cash? A) B) C) D)
C) Which of the following journal entries is correct when no-par common stock is initially issued for cash? A) B) C) D)
D) Which of the following journal entries is correct when no-par common stock is initially issued for cash? A) B) C) D)

E) All of the above
F) C) and D)

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Which of the following statements is not correct?


A) Issuance of common stock creates a financing activities cash inflow.
B) Payment of a common stock cash dividend creates an operating activities cash outflow.
C) Purchase of treasury stock creates a financing activities cash outflow.
D) Issuance of preferred stock creates a financing activities cash inflow.

E) A) and D)
F) A) and B)

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Earnings per share is calculated by dividing net income by the number of outstanding shares of common stock at year-end.

A) True
B) False

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On January 1,2019,the stockholders' equity section of Gibbons Corporation's balance sheet reported the following: On January 1,2019,the stockholders' equity section of Gibbons Corporation's balance sheet reported the following: During 2019,the following selected transactions occurred (assume they occurred in the order given): Prepare the stockholders' equity section of the balance sheet as of December 31,2019. During 2019,the following selected transactions occurred (assume they occurred in the order given): On January 1,2019,the stockholders' equity section of Gibbons Corporation's balance sheet reported the following: During 2019,the following selected transactions occurred (assume they occurred in the order given): Prepare the stockholders' equity section of the balance sheet as of December 31,2019. Prepare the stockholders' equity section of the balance sheet as of December 31,2019.

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blured image *Retained earnings ...

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Shares which a corporation has the ability to issue,as documented in its charter in the state where incorporated,are outstanding shares of stock.

A) True
B) False

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Broadbean Co.had the following amounts on its balance sheet on December 31,2018: Broadbean Co.had the following amounts on its balance sheet on December 31,2018: During 2019,Broadbean Co.reported net income of $46,200,declared cash dividends of $31,800,purchased additional treasury stock for $8,400,and experienced a foreign currency translation gain of $3,600.What amount will Broadbean report as total stockholders' equity at December 31,2019 on its statement of stockholders' equity? A) $717,400. B) $650,600. C) $643,400. D) $672,000. During 2019,Broadbean Co.reported net income of $46,200,declared cash dividends of $31,800,purchased additional treasury stock for $8,400,and experienced a foreign currency translation gain of $3,600.What amount will Broadbean report as total stockholders' equity at December 31,2019 on its statement of stockholders' equity?


A) $717,400.
B) $650,600.
C) $643,400.
D) $672,000.

E) B) and C)
F) All of the above

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Net income increases when treasury stock is resold for an amount in excess of the amount paid when the common stock was repurchased.

A) True
B) False

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When a company sells its treasury stock,it creates a cash inflow from an investing activity because treasury stock is an investment asset on the balance sheet.

A) True
B) False

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Which of the following journal entries does not reflect the initial cash sale of shares of common stock?


A) Which of the following journal entries does not reflect the initial cash sale of shares of common stock? A) B) C) D)
B) Which of the following journal entries does not reflect the initial cash sale of shares of common stock? A) B) C) D)
C) Which of the following journal entries does not reflect the initial cash sale of shares of common stock? A) B) C) D)
D) Which of the following journal entries does not reflect the initial cash sale of shares of common stock? A) B) C) D)

E) A) and B)
F) None of the above

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On October 1,2017,Adoll Company acquired 1,000 shares of its $1 par value stock for $44 per share and held these shares in treasury.On March 1,2019,Adoll resold all the treasury shares for $40 per share.Which of the following entries would be recorded when Adoll Company resells the shares of treasury stock?


A) On October 1,2017,Adoll Company acquired 1,000 shares of its $1 par value stock for $44 per share and held these shares in treasury.On March 1,2019,Adoll resold all the treasury shares for $40 per share.Which of the following entries would be recorded when Adoll Company resells the shares of treasury stock? A) B) C) D)
B) On October 1,2017,Adoll Company acquired 1,000 shares of its $1 par value stock for $44 per share and held these shares in treasury.On March 1,2019,Adoll resold all the treasury shares for $40 per share.Which of the following entries would be recorded when Adoll Company resells the shares of treasury stock? A) B) C) D)
C) On October 1,2017,Adoll Company acquired 1,000 shares of its $1 par value stock for $44 per share and held these shares in treasury.On March 1,2019,Adoll resold all the treasury shares for $40 per share.Which of the following entries would be recorded when Adoll Company resells the shares of treasury stock? A) B) C) D)
D) On October 1,2017,Adoll Company acquired 1,000 shares of its $1 par value stock for $44 per share and held these shares in treasury.On March 1,2019,Adoll resold all the treasury shares for $40 per share.Which of the following entries would be recorded when Adoll Company resells the shares of treasury stock? A) B) C) D)

E) B) and D)
F) A) and D)

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Which of the following does not represent a description of shares of stock presented on the balance sheet?


A) Authorized shares.
B) Issued shares.
C) Outstanding shares.
D) Contributed shares.

E) None of the above
F) B) and D)

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Which of the following is a correct statement about cumulative and noncumulative preferred stock?


A) They both receive dividends in arrears.
B) Cumulative stock's undeclared dividends accumulate each year until paid while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared.
C) Cumulative preferred stock is guaranteed to receive its dividends.
D) Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared while noncumulative stock's undeclared dividends accumulate each year until paid.

E) None of the above
F) All of the above

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Which of the following statements is not correct?


A) Cash flow from financing activities increases when treasury shares are resold.
B) Cash dividends decrease cash flow from financing activities.
C) Cash flow from investing activities decreases when treasury shares are purchased.
D) Issuance of new shares of stock increases cash flow from financing activities.

E) B) and D)
F) All of the above

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Which of the following statements correctly describes a treasury stock transaction?


A) A treasury stock purchase for less than the amount of the stock's original issue cost results in a decrease in total stockholders' equity.
B) A treasury stock purchase for less than the amount of the stock's original issue cost results in an increase in total stockholders' equity.
C) A treasury stock purchase for an amount equal to the amount of the stock's original issue cost results in no change to total stockholders' equity.
D) A treasury stock purchase for more than the amount of the stock's original issue cost results in an increase in total stockholders' equity.

E) B) and D)
F) B) and C)

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Which of the following statements is false?


A) Both stock splits and stock dividends increase the number of common shares issued.
B) Both stock splits and stock dividends increase the number of common shares outstanding.
C) Stock splits reallocate amounts between retained earnings and contributed capital accounts.
D) Both stock splits and stock dividends have the impact of reducing the market price of the stock.

E) A) and B)
F) A) and C)

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CGJ Company has provided the following: • 200,000 shares of $5 par value common stock are authorized • 140,000 shares of common stock were issued for $11 per share • 130,000 shares are outstanding Which of the following statements is false?


A) Common stock is reported at $700,000 on the balance sheet.
B) Additional paid-in capital is reported at $840,000 on the balance sheet.
C) Stockholders' equity decreased $110,000 when the treasury stock was purchased.
D) There are 10,000 shares of treasury stock.

E) A) and D)
F) All of the above

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