Treasury stock is a. unissued shares of a corporation\'s own stock b. shares of

Question

Treasury stock is a. unissued shares of a corporation's own stock b. shares of a corporation's stock which have been issued and subsequently repurchased by the corporation ownership rights in other companies held by the corporation for investment purposes d. shares of a corporation's stock held by the board of directors 4. The following information was extracted from the accounting records of Plum Company: Beginning Paid-In Capital Beginning Retained Earnings Beginning Assets $87,000 $211,000 $455,000 During the period assets increased by $150,000, revenues were $200,000, and expenses were 165.000. The owners made no additional investments The amount of Plum Company's liabilities at the end of the period is a. $157,000 b. $272.000 c $150,000 d. $ 45,000 . The follow ing amounts were taken from the financial statements of Palmer Company 20102009 Total assets Net sales Cost of goods sold 5800,000 720,000 368,000 126,000 90,000 S35 $1,000,000 650,000 320,000 117,000 90,000 539 Net income Weighted average number of common shares outstanding Market price of common stock The Gross profit rate for 2010 is a. 46.0%. b. 30.5% c.488%. d.36.0%. 6. The entity's economie obligations to non-owners is (are) called a owners' equity a owners b liabilities d. retained carsings The effects of price changes in marketable securities are nponed 7. s' equity of shares owned Page 4 of 7

Explanation / Answer

Ans 3: option b

Reason: Treasury stock represent that portion of stock which was issued at first and subsequently repurchased from the market.

Ans 4: option b

Closing asset=455000+150000=605000

Closing retained earning=246000

Capital=87000

Net liabilities=605000-246000-87000

=$272000

Ans 5: option C

Gross profit=net sales-cost of goods sold

=720000-368000=$352000

Gross profit %=352000/720000= 48.8%

Ans 6: option b

Reason: liabilities reflect the balance the entity owns to parties who arent the part of the entity as a owner or shareholders.

Ans 7 : option c

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