Question Details

Each of the following is correct regarding treasury stock 



1. Beckham Company has 1,000 shares of 4%, $100 par cumulative preferred stock
outstanding at December 31, 2008. No dividends have been paid on this stock for 2007 or
2008. Dividends in arrears at December 31, 2008 total
a. $0.
b. $400.
c. $4,000.
d. $8,000.
2. Ephram Company has 2,000 shares of 5%, $100 par non-cumulative preferred stock
outstanding at December 31, 2008. No dividends have been paid on this stock for 2007 or
2008. Dividends in arrears at December 31, 2008 total
a. $0.
b. $1,000.
c. $10,000.
d. $20,000.
3. Rebel Inc. issued 2,000 shares of no-par common stock with a stated value of $3 per
share. The market price of the stock on the date of issuance was $12 per share. The entry
to record this transaction includes a
a. debit to Cash for $6,000.
b. credit to Common Stock for $24,000.
c. credit to Common Stock for $6,000.
d. debit to Paid-in Capital in Excess of Par Value for $24,000.
4. Rancho Corporation sold 100 shares of treasury stock for $40 per share. The cost for the
shares was $30. The entry to record the sale will include a
a. credit to Gain on Sale of Treasury Stock for $3,000.
b. credit to Paid-in Capital from Treasury Stock for $1,000.
c. debit to Paid-in Capital in Excess of Par Value for $1,000.
d. credit to Treasury Stock for $4,000.
5. Each of the following is correct regarding treasury stock except that it has been
a. issued.
b. fully paid for.
c. reacquired.
d. retired.




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