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What would be the impact on the accounting equation when a company purchases treasury stock?
a. |
Increase assets and increase stockholders’ equity. |
b. |
Decrease assets and increase stockholders’ equity. |
c. |
Decrease assets and decrease stockholders’ equity. |
d. |
No effect on the accounting equation. |
86. The corporation’s own stock that has been issued and then repurchased by the company is referred to as:
a. |
Preferred Stock. |
b. |
Authorized Stock. |
c. |
Treasury Stock. |
d. |
Common Stock. |
87. When treasury stock is resold at a gain, the difference between its cost and the cash
received when resold:
a. |
Increases net income. |
b. |
Increases stockholders’ equity. |
c. |
Has no effect on net income or stockholders’ equity. |
d. |
Increases net income but decreases stockholders’ equity. |
88. Crossroads Mall had 100,000 outstanding shares of common stock. On June 16, 2015, Crossroads repurchased 20,000 shares of its own stock at $30 per share. On July 23, 2015, Crossroads resold 10,000 shares at $28 per share. What net effect did the repurchase and the resell of common stock have on the accounting equation?
a. |
Increase in assets and decrease in stockholders’ equity. |
b. |
Decrease in assets and increase in stockholders’ equity. |
c. |
Increase in assets and increase in stockholders’ equity. |
d. |
Decrease in assets and decrease in stockholders’ equity. |
89. On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15 each. Which of the following is correct regarding the journal entry for the reissued shares?
a. |
Debit Cash $15,000. |
b. |
Credit Treasury Stock $10,800. |
c. |
Credit Paid in Capital - Treasury Stock $5,200. |
d. |
Credit Treasury Stock $6,000. |
90. On November 6, Coleman Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On November 20, Coleman Corp. reissued 400 shares for $30 each. Which of the following is correct regarding the effect of the journal entry for the reissued shares?
a. |
Assets decrease. |
b. |
Liabilities decrease. |
c. |
Expenses increase. |
d. |
Stockholders’ Equity increases. |
91. On February 22, Brett Corporation reacquired 200 shares of its $5 par value common stock for $25 each. On March 15, the company reissued 70 shares for $30 each. What is true of the entry for reissuing their shares?
a. |
Credit Cash $1,750. |
b. |
Credit Additional Paid in Capital $350. |
c. |
Debit Treasury Stock $1,750. |
d. |
Credit Treasury Stock $2,100. |
92. Retained Earnings represent a company's:
a.Net income less dividends since the company first started.
b.Undistributed net assets.
c.Extra paid-in capital.
d.Undistributed cash.
93. The Retained Earnings balance reported on the balance sheet typically is not affected by:
a.Net income.
b.Net loss.
c.Dividends paid.
d.Stock splits.
94. The balance of Retained Earning at the end of the year represents:
a. |
Current year’s profits less payments to owners. |
b. |
Total earnings less payments to owners over the life of the company. |
c. |
Total contributions from owners less withdrawals over the life of the company. |
d. |
Total earnings over the life of the company. |
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