Question Details

Four thousand shares of treasury stock 



1. Treasury stock is generally accounted for by the
a. cost method.
b. market value method.
c. par value method.
d. stated value method.
2. Treasury Stock is a(n)
a. contra asset account.
b. retained earnings account.
c. asset account.
d. contra stockholders’ equity account.
3. Four thousand shares of treasury stock of Meyer, Inc., previously acquired at $12 per
share, are sold at $18 per share. The entry to record this transaction will include a
a. credit to Treasury Stock for $72,000.
b. debit to Paid-In Capital from Treasury Stock for $24,000.
c. debit to Treasury Stock for $48,000.
d. credit to Paid-In Capital from Treasury Stock for $24,000.
4. Reeves Company originally issued 2,000 shares of $10 par value common stock for
$60,000 ($30 per share). Reeves subsequently purchases 200 shares of treasury stock
for $27 per share and resells the 200 shares of treasury stock for $29 per share. In the
entry to record the sale of the treasury stock, there will be a
a. credit to Common Stock for $5,400.
b. credit to Treasury Stock for $2,000.
c. debit to Paid-In Capital in Excess of Par Value of $6,000.
d. credit to Paid-In Capital from Treasury Stock for $400.
5. When preferred stock is cumulative, preferred dividends not declared in a period are
a. considered a liability.
b. called dividends in arrears.
c. distributions of earnings.
d. never paid.




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