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23) All City Realty, Inc. issued 7000 shares of $9 stated value common stock for $16 per share. The journal
entry to record this transaction includes a credit to ________.
A) Common Stock for $112,000
B) Paid-In Capital in Excess of Stated-Common for $63,000
C) Common Stock — $9 Stated Value for $49,000
D) Paid-In Capital in Excess of Stated-Common for $49,000
24) When 1000 shares of $3 stated value common stock is issued at $18 per share, ________.
A) Common Stock — $3 Stated is credited for $18,000
B) the account titled Paid-In Capital in Excess of Stated-Common is used to record the issue price of the
stock
C) the difference between the issue price and the stated value is credited to Paid-In Capital in Excess of
Stated-Common
D) the accounting is exactly the same as the accounting for par value stock
25) When stock is issued for assets other than cash, the transaction is always recorded at the market value
of the stock issued.
26) When stock is issued for assets other than cash, the transaction is recorded at the market value of the
stock issued or the market value of the assets received, whichever is more clearly determinable.
27) On December 2, 2018, Eshares, Inc. purchases land. In payment for the land, Eshares, Inc. issues 6000
shares of common stock with $6 par value. The land has been appraised at a market value of $430,000.
Which of the following is included in the journal entry to record this transaction?
A) debit Common Stock—$6 Par Value for $36,000 and debit Paid-In Capital in Excess of Par—Common
$394,000
B) credit Common Stock—$6 Par Value for $36,000 and credit Paid-In Capital in Excess of Par—Common
$394,000
C) credit Common Stock—$6 Par Value for $430,000
D) debit Cash $430,000
28) When a stockholder contributes land to a corporation in exchange for stock, ________.
A) liabilities and stockholders' equity are increased
B) assets and stockholders' equity are increased
C) one asset is increased and another asset is decreased
D) assets and liabilities are increased
29) O'Malley, Inc. issued 60,000 shares of common stock in exchange for manufacturing equipment. The
equipment has a fair value of $1,420,000. The stock has a par value of $0.05 per share. The journal entry to
record this transaction includes a ________.
A) debit to Cash for $14,170,000
B) credit to Gain on Sale of Common Stock for $1,480,000
C) credit to Paid-In Capital in Excess of Par—Common for $1,417,000
D) credit to Common Stock—$0.05 Par Value for $1,420,000
30) On December 2, 2018, St. Andrews, Inc. purchases land. In exchange for the land, St. Andrews, Inc.
issues 8,000 shares of common stock with $1.00 par value. The land has been appraised at a market value
of $400,000. Prepare the journal entry for this transaction. Omit explanation.
31) Preferred Stock is included in the long-term assets section of the balance sheet.
32) If preferred stock is issued for an amount above the par value, the amount of the par value times the
number of shares issued is credited to Paid-In Capital in Excess of Par—Preferred.
33) Preferred Stock is included in the stockholders' equity section of the balance sheet and is often listed
after Common Stock.
34) Manley Corporation issued 2,500 shares of its $50 par, 4% preferred stock on March 31, 2019, at $80
per share. The amount credited to Paid-In Capital in Excess of Par-Preferred is $200,000.
35) The following information is from the December 31, 2018 balance sheet of January Corporation.
Preferred Stock, $100 par
$270,000
Paid-In Capital in Excess of Par—Preferred
22,000
Common Stock, $1 par
69,000
Paid-In Capital in Excess of Par—Common
206,000
Retained Earnings
56,600
Total Stockholders' Equity
$623,600
What is the average issue price of the preferred stock shares? (Round answers to the nearest dollar.)
A) $108
B) $100
C) $167
D) $106
36) The following information is from the December 31, 2018 balance sheet of May Corporation.
Preferred Stock, $100 par
$390,000
Paid-In Capital in Excess of Par—Preferred
25,000
Common Stock, $1 par
152,000
Paid-In Capital in Excess of Par—Common
346,000
Retained Earnings
83,900
Total Stockholders' Equity
$996,900
What was the total paid-in capital as of December 31, 2018?
A) $736,000
B) $996,900
C) $913,000
D) $888,000
37) April, Inc. issued 4000 shares of preferred stock for $240,000. The stock has a par value of $60 per
share. The journal entry to record this transaction would ________.
A) credit Cash $240,000, debit Preferred Stock—$60 Par Value $4000, and debit Paid-In Capital in Excess
of Par—Preferred $236,000
B) debit Cash $240,000, credit Preferred Stock—$60 Par Value $4000, and credit Paid-In Capital in Excess
of Par—Preferred $236,000
C) credit Cash $240,000 and debit Preferred Stock—$60 Par Value $240,000
D) debit Cash $240,000 and credit Preferred Stock—$60 Par Value $240,000
Cash
240,000
Preferred Stock—$60 Par Value (4000 × $60)
240,000
Diff: 2
LO: 13-2
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2: Issuing Preferred Stock
38) August, Inc. had the following transactions in 2018, its first year of operations:
• Issued 22,000 shares of common stock. The stock has a par value of $3.00 per share and was issued at
$16.00 per share.
• Issued 1800 shares of $160 par value preferred stock at par.
• Earned net income of $37,000.
• Paid no dividends.
At the end of 2018, what is total stockholders' equity?
A) $677,000
B) $354,000
C) $286,000
D) $640,000
39) May, Inc. had the following transactions in 2019, its first year of operations:
• Issued 20,000 shares of common stock. The stock has a par value of $3.00 per share and was issued at
$19.00 per share.
• Issued 2000 shares of $200 par value preferred stock at par.
• Earned net income of $40,000.
• Paid no dividends.
At the end of 2019, what is the total amount of paid-in capital?
A) $820,000
B) $460,000
C) $380,000
D) $780,000
40) December, Inc. issued 4,000 shares of preferred stock for $240,000. The stock has a par value of $60 per
share. Prepare the journal entry for this transaction. Omit explanation.
Cash
240,000
Preferred Stock—$60 Par Value
240,000
Diff: 2
LO: 13-2
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Issuing Preferred Stock
41) Smart Electronics completed the following stock issuance transactions:
June 7
Issued 4,000 shares of $3 par value common stock for cash of
$12 per share
Aug. 16
Issued 400 shares of no-par preferred stock for $25,000 cash
Sept. 19
Received equipment with a market value of $75,000 in
exchange for 5,000 shares of the $3 par value common stock
Prepare the journal entries to record these transactions. Explanations are not required.
42) Budget Office Supply Corporation completed the following stock issuance transactions:
Mar. 28
Issued 5,000 shares of $4 stated value common stock for cash of
$20 per share
May 1
Received merchandise inventory with a market value of $46,000
in exchange for 2,000 shares of the $4 stated value common
stock.
May 14
Issued 450 shares of 5%, $20 par value preferred stock for $50
per share
Prepare the journal entries to record these transactions. Explanations are not required.
43) These independent companies had the following transactions:
a. Long Corporation issued 4,500 shares of its $6 stated value common stock to Jack Smith Realty in
exchange for land with a market value of $50,000
b. Short Corporation received $115,000 cash for 10,000 shares of its $10 par preferred stock
c. Middle Corporation issued 7,000 shares of its no-par common stock at $15 per share
Requirement:
Prepare the journal entries for these transactions. Use proper account titles and omit explanations.
1) Treasury stock is a corporation's own stock that it has previously issued and later reacquired.
2) A company may purchase treasury stock to support the company's stock price.
