1) Bond Co. purchases 5,000 shares of its own common stock for $50,000. This acq
ID: 3419949 • Letter: 1
Question
1) Bond Co. purchases 5,000 shares of its own common stock for $50,000. This acquisition of treasury stock: A increases total stockholder's equity by $50,000 B decreases total stockholder's equity by $50,000 C reduces common stock account by $5,000 D decreases net income by $45,000 2) Billy Bob Inc. has the following accounts and amounts in its stockholder's equity section of the balance sheet: 6% Preferred Stock, $100 par value $ 800,000 Common Stock, $5 par value $ 500,000 Treasury Stock, $20 cost per share $ 40,000 What number of common stock is issued and outstanding? No. shares issued No. shares outstanding A 100,000 98,000 B 100,000 100,000 C 440,000 60,000 D 98,000 100,000 3) The stockholder's equity section of the Canner Co. balance sheet contains the following information: 4% Preferred Stock, $100 par value, cumulative, 5,000 shares issued $ 500,000 Common Stock, $1 Par Value, 20,000 shares issued $ 20,000 Dividends were not declared or paid in 2004 or 2005. The board of directors declares and pays a $50,000 dividined in 2006. In 2006, stockholders should receive dividends of: Preferred Stockholders Common Stockholders A $20,000 $30,000 B $40,000 $10,000 C $50,000 $0 D $60,000 $0 1) Bond Co. purchases 5,000 shares of its own common stock for $50,000. This acquisition of treasury stock: A increases total stockholder's equity by $50,000 B decreases total stockholder's equity by $50,000 C reduces common stock account by $5,000 D decreases net income by $45,000 2) Billy Bob Inc. has the following accounts and amounts in its stockholder's equity section of the balance sheet: 6% Preferred Stock, $100 par value $ 800,000 Common Stock, $5 par value $ 500,000 Treasury Stock, $20 cost per share $ 40,000 What number of common stock is issued and outstanding? No. shares issued No. shares outstanding A 100,000 98,000 B 100,000 100,000 C 440,000 60,000 D 98,000 100,000 3) The stockholder's equity section of the Canner Co. balance sheet contains the following information: 4% Preferred Stock, $100 par value, cumulative, 5,000 shares issued $ 500,000 Common Stock, $1 Par Value, 20,000 shares issued $ 20,000 Dividends were not declared or paid in 2004 or 2005. The board of directors declares and pays a $50,000 dividined in 2006. In 2006, stockholders should receive dividends of: Preferred Stockholders Common Stockholders A $20,000 $30,000 B $40,000 $10,000 C $50,000 $0 D $60,000 $0Explanation / Answer
1. Acquistion of treasury stock decreases total stockholder's equity by $50,000
2. Number of preferred shares 800,000/100 = 8000
Number of common stock shares 100,000
Number of treasury shares 2000
Number of common stock outstanding shares = total common shares - treasury stock
= 100000-2000 = 98000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.