Shares And Paid in Capital – Accounting & Finance Exam

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Shares And Paid in Capital – Accounting & Finance Exam

The key terms in these Accounting include Shares, Common Stock, Paid in Capital, Perpetual Inventory, Net Income, Sales Discounts, Cost of Goods Sold, And Accounting & Finance.


A company issued 30,000 shares of $10 par common stock for $16 per share.

By how much will the Paid in Capital in Excess of Par account increase?

180,000


A company’s normal selling price for its product is $20 per unit. However, due to market competition, the selling price has fallen to $15 per unit. This company’s current inventory consists of 200 units purchased at $16 per unit. Replacement cost has fallen to $13 per unit. Calculate the value of this company’s inventory at the lower of cost or market.

$2,600. – Correct

$2,550.

$3,000.

$3,200.

$2,700.

Explanation

200 units @ $13 per unit = $2,600


Cushman Company had $846,000 in sales, sales discounts of $12,690, sales returns and allowances of $19,035, cost of goods sold of $401,850, and $291,025 in operating expenses. Net income equals:

$814,275.

$153,125.

$412,425.

$121,400. – Correct

$184,850.

Explanation

Net Income = $846,000 – $12,690 – $19,035 – $401,850 – $291,025 = $121,400


A company had the following revenues, expenses and dividends in its first three years of operations:

Year 1Year 2Year 3
Revenues$12,000$20,000$30,000
Expenses$7,500$14,000$21,500
Dividends$1,000$2,000$3,000

What is the balance in Retained Earnings at the end of the first year?

3,500


Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales:
  

August 216 units were purchased at $7 per unit.
August 1821 units were purchased at $9 per unit.
August 2918 units were sold.


What is the amount of the cost of goods sold for this sale? (Round average cost per unit to 2 decimal places.)

$130.00

$189.00

$301.00

$132.50

$146.52 – Correct

Explanation

Average cost = [(16 * $7) + (21 * $9)]/37 units = $8.14/unit
Cost of sale = 18 units * $8.14/unit = $146.52


A company issued 30,000 shares of $10 par common stock for $16 per share.

By how much will the Paid in Capital in Excess of Par account increase?

180,000


A company had the following revenues, expenses and dividends in its first three years of operations:

Year 1Year 2Year 3
Revenues$12,000$20,000$30,000
Expenses$7,500$14,000$21,500
Dividends$1,000$2,000$3,000

What is the balance in Retained Earnings at the end of the third year?

13,000


From E16-3, if Ms. Trevino accepts the $325,000, how much will it be worth in 5 years? Assume she earns a return of 8 percent per year and makes no withdrawals over the 5-year period.

477,532


Cushman Company had $846,000 in sales, sales discounts of $12,690, sales returns and allowances of $19,035, cost of goods sold of $401,850, and $291,025 in operating expenses. Net income equals:

$814,275.

$153,125.

$412,425.

$121,400. – Correct

$184,850.

Explanation

Net Income = $846,000 – $12,690 – $19,035 – $401,850 – $291,025 = $121,400


From E16-4, what is the maximum amount of cash the dean should be willing to pay for a copy machine?

64,427.5


A company issued 30,000 shares of $10 par common stock for $16 per share.

By how much will the Paid in Capital in Excess of Par account increase?

180,000


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