Reference no: EM132437772

Question -

Q1. On January 1, 2018, Window Inc. issued (and sold) 80,000 shares of common stock. On December 31, 2018, the company reacquired 2,000 shares of common stock as Treasury Stock. How many shares are considered issued and outstanding after the Treasury Stock purchase?

a. 80,000 shares issued; 2,000 shares outstanding

b. 78,000 shares issued; 78,000 shares outstanding

c. 80,000 shares issued; 78,000 shares outstanding

d. 78,000 shares issued; 2,000 shares outstanding

Q2. Grand Inc. issued 3,000 shares of preferred stock. The preferred stock contains the following features:

1. The holder is entitled to receive a promised dividend amount each year. If the dividend cannot be paid in a given year, the dividend does not accrue and past dividends need not be paid.

2. The company retains the right to redeem and cancel the preferred stock at any time it wishes.

This preferred stock is:

a. Noncumulative and voting preferred stock.

b. Noncumulative and callable preferred stock.

c. Cumulative and participating preferred stock.

d. Cumulative and callable preferred stock.

Q3. On January 1, C company sells 50,000 shares of $3 par common stock for $5. It does not issue any preferred stock. Later on the company buys back 10% of its common shares outstanding for $7 per share. Total equity on December 31 is $300,000. What is retained earnings on December 31?

a. $85,000

b. $50,000

c. $120,000

d. $185,000

Below is the equity section of the balance sheet of Bottle Inc. as of December 31, 2014:

Common stock, $12 par value $2,280,000

Paid-in capital in excess of par 1,330,000

The company only has 1 class of common stock and no preferred stock. What was the price of the common stock when it was first issued?

a. $300,833

b. $12

c. $7

d. $19