Question Details

Blaine Corporation





1.	Darman Company issued 500 shares of no-par common stock for $5,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?
a.	Cash		5,500
		Common Stock		5,500

b.	Cash		5,500
		Common Stock		1,000
		Paid-in Capital in Excess of Par		4,500

c.	Cash		5,500
		Common Stock		1,000
		Paid-in Capital in Excess of Stated Value		4,500

d.	Common Stock	5,500
		Cash		5,500



	2.	Ralston Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Ralston issues 6,000 shares of common stock to pay its recent attorney- bill of $25,000 for legal services on a land access dispute, which of the following would be the journal entry for Ralston to record?
a.	Legal Expense	6,000
		Common Stock		6,000

b.	Legal Expense	25,000
		Common Stock		25,000

c.	Legal Expense 	25,000
		Common Stock		6,000
		Paid-in Capital in Excess of Stated Value - Common		19,000

d.	Legal Expense  	25,000
		Common Stock		6,000
		Paid-in Capital in Excess of Par - Preferred		19,000

 
	3.	The following data is available for Blaine Corporation at December 31, 2013:
Common stock, par $10 (authorized 25,000 shares)	$200,000
Treasury Stock (at cost $15 per share)	900
Based on the data, how many shares of common stock are outstanding?
a.	25,000
b.	20,000
c.	24,940
d.	19,940



	4.	The following data is available for Blaine Corporation at December 31, 2013:
Common stock, par $10 (authorized 25,000 shares)	$200,000
Treasury Stock (at cost $15 per share)	$ 900
Based on the data, how many shares of common stock have been issued?
a.	25,000
b.	20,000
c.	24,940
d.	19,940



	5.	Aaron, Inc. paid $90,000 to buy back 10,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a 
a.	debit to Retained Earnings for $30,000.
b.	credit to Retained Earnings for $10,000.
c.	debit to Paid-in Capital from Treasury Stock for $90,000.
d.	credit to Paid-in Capital from Treasury Stock for $10,000.





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