Question Details

What will be the effect on total stockholders’ equity



1. Jansen Packaging Corporation began business in 2008 by issuing 40,000 shares of $5
par common stock for $8 per share and 10,000 shares of 6%, $10 par preferred stock for
par. At year end, the common stock had a market value of $10. On its December 31, 2008
balance sheet, Jansen Packaging would report
a. Common Stock of $400,000.
b. Common Stock of $200,000.
c. Common Stock of $320,000.
d. Paid-In Capital of $300,000.
2. Kim, Inc. issued 5,000 shares of stock at a stated value of $10/share. The total issue of
stock sold for $15/share. The journal entry to record this transaction would include a
a. debit to Cash for $50,000.
b. credit to Common Stock for $50,000.
c. credit to Paid-in Capital in Excess of Par Value for $25,000.
d. credit to Common Stock for $75,000.
3. Foley Manufacturing Corporation purchased 3,000 shares of its own previously issued
$10 par common stock for $69,000. As a result of this event,
a. Foley- Common Stock account decreased $30,000.
b. Foley- total stockholders’ equity decreased $69,000.
c. Foley- Paid-in Capital in Excess of Par Value account decreased $39,000.
d. All of the above.
4. A corporation purchases 20,000 shares of its own $20 par common stock for $35 per
share, recording it at cost. What will be the effect on total stockholders’ equity?
a. Increase by $700,000
b. Decrease by $400,000
c. Decrease by $700,000
d. Increase by $400,000
5. A corporation purchases 10,000 shares of its own $10 par common stock for $25 per
share, recording it at cost. What will be the effect on total stockholders’ equity?
a. Increase by $100,000
b. Decrease by $250,000
c. Increase by $250,000
d. Decrease by $100,000




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