9
On January 1, 20xx, Sunshine Corporation had 40,000 shares of $10 par value common
stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00
per share. On February 1, 20xx, Sunshine purchased 2,000 shares of treasury stock for $23
per share and later sold the treasury shares for $21 per share on March 1, 20xxx. The journal
entry to record the purchase of the treasury shares on February 1, 20xx, would include a
a.
credit to Treasury Stock for $46,000.
b.
dehit to Treasury Stock for $46,000.
c.
dehit to a loss account for $6,000
d.
credit to a gain account for $6,000.
10.
For the year that just ended, a company reports net income of $2,200,000. There are 750,000
shares authorized, 700,000 shares issued, and 600,000 shares of common stock outstanding.
What is the earnings per share?
a.
$4.40.
b.
$3.14
c.
$4.57.
d.
$3.67
11.
On January 1, 2020, the Baker Corporation issued 10% bonds with a face value of $50,000.
The bonds are sold for $46,000. The bonds pay interest semiannually on June 30 and
December 31 and the maturity date is December 31, 2024. Baker records straight-line
amortization of the bond discount. The bond interest expense for the year ended December
31, 2020, is:
a.
$4,000.
b.
$4,200.
c.
$5,400.
d.
$5,800.
12.
On January 1, 2020, $1,000,000, 5-year, 10% bonds were issued for $960,000. Interest is
paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line
method to amortize discount on bonds payable, the semiannual amortization amount is:
a.
$8.000.
b.
$6,000.
c.
$4,000.
d.
$5,000.
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