# Shares And Paid in Capital – Accounting & Finance Exam

### 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:

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:

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:

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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