The entry to record transaction 3 would include a a. credit to Common Stock for

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The entry to record transaction 3 would include a a. credit to Common Stock for S160,000 b. credit to Additional Paid-in Capital for $20,000. c. debit to Equipment for $140,000. d. debit to Common Stock for $140,000. 35. A compary purchases 400 shares of its S50 par value common stock at 555 per share. it then reissues .6? shares at $58 pershare. The entry upon reissue ofthe stock would incme a credit to a. Treasury Stock, Common for $348 b. Retained Earnings for $430 c. Cash for $348. d. Paid-in Capital, Treasury Stock for $180 36. Which of the following statements is true about investments categorized as trading securities? a. Changes in market value are reflected in net income b. They are purchased to be held to maturity c. They can consist of debt, but not equity, securities d. They are valued on the balance sheet at cost 37. Rapp Corporation has invested in the stock of two other corporations, Hart Corporation and Hilker Corporation. Rapp does not own a controlling interest or exercise significant influence over either corporation. Rapp's accountant is preparing financial statements and has compiled the following Stock name Hart Hilker No. of shares 1,000 Cost $23,000 27,500 Market $24,000 25,500 500 What should be the balance in the Allowance to Adjust Long-Term Investments to Market account, based on the above information? a. b. c. d. $2,000 credit $1,000 credit $1,000 debit $2,000 debit 38. West Corporation purchased 15,000 shares of Luffy Corporation common stock for $60 per share on January 2, 20x7. Lufty Corporation reported net income of $1,500,000 for 20x7 and paid dividends of S300,000 during 20x7. Luffy has a total of $0,000 shares of common stock outstanding. West Corporation should report the long-term investment at a carrying value on December 31, 20x7, of a. $900,000. b. $1,350,000. c. $1,260,000. d. $990,000. UIBE ACC212 Financial Accounting/Geyer/Summer 2018

Explanation / Answer

35. d - Paid in Capital, Treasury Stock for $180

Below is the complete entry:

Any excess received on reselling of the common stock will be transferred to Paid in Capital.

36. A- Changes in Market Value are reflected in Income Statement

A held-for-trading investment refers to debt or equity investments that are purchased with the intent of selling them within a short period of time. Any changes in the fair value is reflected in the Income Statement.

37. C - 1000 Debit

38. C -$1,260,000

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Account Description Debit Credit Cash $        3,480 Treasury Stock $        3,300 Paid in Capital $           180

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