30) An investor purchased 800 shares of common stock, $50 par, for $70,040. 200

Question

30) An investor purchased 800 shares of common stock, $50 par, for $70,040. 200 shares were later sold for $90 per share. a) $8,000 gain b) $8,000 loss c) $490 loss d) $490 gain What is the amount of gain or loss on the sale? 31) A corporation currently has 30,000 shares of $10 par value common stock with a total par value of $300,000. The common stock was issued at a total of $30,000 over par value. The corporation's retained earnings account has a $40,000 balance (debit) due to three successive years of net losses. What is the corporation's total stockholders' equity? a) $370,000 b) $290,000 c) $230,000 d) $310,000 32) Cash dividends of $50,000 were declared during the year. Cash dividends payable were SI0,000 and s2o.000 at the beginning and end of the year, respectively. The amount of cash paid for dividends during the year is: a) $10,000 b) $20,000 c) $30,000 d) $40,000 33) The net income reported on the income statement for the current year was $100,000. Depreciation recorded on plant assets and amortization of patents for the year was $60,000 and $20,000 respectively. and at the beginning of the year are listed below Balances of current asset and current liability accounts at the end Beginning $80,000 100,000 $70,000 120,000 150,000 3,500 80,000 3,000 75,000 Accounts payable Using the indirect method, what is the amount of cash flows from operating activities reported on the statement of cash flows? a) $70,000 b) $109,500 c) $170,500 d) $189,500 34) Land costing $80,000 was sold for $60,000 cash and the loss on the sale was reported on the income statement as an "other expense". On the statement of cash flows, what amount should be reported as an investing activity from the sale of land? a) $20,000 b) $60,000 c) $80,000 d) $140,000

Explanation / Answer

Answer 30-d. $490 Gain Sale of Shares - 200 Shares X $90      18,000.00 Purchase Cost - $70,040 X 200/800      17,510.00 Gain on sale of shares            490.00 Answer 31-b. $290,000 Stockholders' Equity Common stock - 30,000 Shares X $10    300,000.00 Paid in Capital in Excess of Par      30,000.00 Total Paid in Capital    330,000.00 Retained Earnings    (40,000.00) Total Stockholders' Equity    290,000.00 Answer 32 - d. $40,000 Cash Dividend Payable Beg. Bal.    10,000.00 Div. Paid - Cash    40,000.00    50,000.00 Div. Declared End. Bal.    20,000.00 Answer 33-d. $189,500 Cash Flow from Operating activities: Net Income    100,000.00 Add/(Less) non cash effects on operating activities Depreciation expense - Plant Assets      60,000.00 Amortization Expense - Patent      20,000.00 Increase in Accounts Receivables    (20,000.00) Decrease in Inventory      25,000.00 Decrease in Prepaid Expenses          (500.00) Increase in Accounts Payable         5,000.00      89,500.00 Net Cash used by operating activities    189,500.00 Answer 34-b. $60,000 Cash Flow from Investing activities: Sale of Land      60,000.00

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