Question

At the beginning of 2020, Chemical Cleaning Solutions had 18,000 shares of $4 Par value common stock outstanding that were issued at $28 a share. In June, Chemical Cleaning Solutions issued an additional 4,000 shares of common stock for $30 a share. A total of 63,000 shares were authorized. On September 23, Chemical Cleaning Solutions purchased 400 shares of treasury stock at $27 a share. Which of the following would be included in the purchase of treasury stock?

A. Debit Treasury Stock for $10,800.
B. Credit Treasury Stock for $10,800.
C. Credit Cash for $1,600.
D. Credit Additional Paid-In Capital for $9,200.
At the end of the accounting period, the general ledger of Antonio's Tacos had the following balances: Common Stock, $60,000; additional paid-in capital, $222,000; retained earnings, $402,000; and treasury stock, $13,000. What is the total amount of stockholders' equity?
a. $282,000.
b. $671,000.
c. $695,000.
d. $684,000.
Stafford Publishing Inc. was established on February 21, 2020. Stafford is authorized to issue 800,000 shares of $2.00 par value common stock and by December 31, 2020, Stafford had 200,000 shares issued & outstanding and Paid In Capital of $1,800,000. On January 3, 2021, when the common stock was trading for $15/share, Stafford declared a 14% stock dividend. Which of the following would be included in the journal entry to record the declaration and payment of the stock dividend?
A. Stock Dividends is debited for $56,000.
B. Common Stock is credited for $56,000.
C. Additional Paid in Capital is credited for $420,000.
D. Cash Dividends is debited for $420,000.

Answer 1

A

B

B

Step-by-step explanation:

The purchase of treasury stock from shareholders would cost the company $10,800($27*400) which would be credited to cash account and debited to treasury stock,hence option A is correct.

The correct answer to the second question is that equity section of the balance sheet consists of common stock amount,plus paid in capital in excess of par plus retained earnings minus treasury stock i.e$671,000($60,000+$222,000+$402,000-$13000)

Stock dividend=issued and outstanding shares*14%*$15

=200,000*14%=28000

The common stock would credited with $56,000(28,000*$2)

The correct option is common stock is credited with $56,000