Reference no: EM132483445
Question 1 - The Malone Company has 200,000 shares of $10 par common stock outstanding. Management declares (not pays) a 10% stock dividend. The market value of a share of common stock was $15 immediately prior to the stock dividend declaration. The journal entry is:
A) debit retained earnings, $300,000; credit stock dividend distributable, $200,000; credit paid in capital in excess of par, $100,000
B) debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in excess of par, $200,000.
C) debit stock dividends distributable, $200,000; credit common stock, $200,000.
D) debit stock dividends distributable, $150,000; credit common stock, $150,000.
Question 2 - Styles Dress Company previously purchased 10,000 shares of treasury stock on the open market for $8 per share. Later, the company resells 5,000 shares for $10 per share. What is the journal entry for the sale?
A) debit cash, $50,000; credit treasury stock, $40,000; credit retained earnings, $10,000
B) debit cash, $50,000; credit treasury stock, $50,000
C) debit cash, $50,000; credit treasury stock, $10,000; credit additional paid-in capital, $40,000
D) debit cash, $50,000; credit treasury stock, $40,000; credit additional paid-in capital-treasury stock, $10,000
Question 3 - Eilish Enterprises purchased 15% of the outstanding stock of Del Ray Company. Eilish paid $9 per share to acquire 10,000 shares and will treat this purchase as available-for-sale securities. Par value of the stock is $1. Eilish uses a calendar year, and on December 31, the market value of Del Ray stock is $12 per share. What is the entry Eilish needs to make on December 31?
A) debit available-for-sale securities, $30,000; credit unrealized gain on available-for-sale securities, $30,000.
B) no entry is required because the stock has not been sold
C) debit unrealized gain on available-for-sale securities, $30,000; credit available-for-sale securities, $30,000.
D) debit available-for-sale securities, $20,000; credit unrealized gain on available-for-sale securities, $20,000.