Reference no: EM132756544

Problem 1: Baker, Incorporated has 100,000 shares of $50 par value common stock authorized and issued. The board of directors has authorized a 5-for-1 stock. After the stock split, what will be the total number of shares issued and the par value of these shares?

A. 50,000 shares with a par value of $10.00 per share.

B. 500,000 shares with a par value of $100.00 per share.

C. 500,000 shares with a par value of $10.00 per share.

D. 5,000,000 shares with a par value of $1.00 per share.

E. None of the above

Problem 2: A corporation purchased treasury stock for $50,000 cash. The journal entry for this transaction included which of the following?

A. A debit to Cash and a credit to Common stock.

B. A debit to Treasury Stock and a credit to Cash.

C. A debit to Retained Earnings and a credit to Treasury Stock.

D. A debit to Treasury Stock and a credit to Preferred Stock.