In: Accounting
Dan Corp issues 3,000 shares of 10%, preferred stock. The Cash amount is $450,000; in this case the market value is: *
$10
$100
$120
$150
On July 1, 2019, Alex Company borrows $30,000 from City Bank and signs a 4- months, 5%, $30,000 interest bearing note. Interest Expense is: *
$500
$800
$30,500
$30,800
Lili Company’s products are subject to a 1-year warranty. During 2019, the company sold 300,000 units, of which the company estimates 4% will be defective. During the year, the company honored warranty contracts for 6,000 units. When honoring warranty contracts, the company must *
Debit Warranty Liability and credit Repair Parts
Debit Repair Parts and credit Warranty Liability
Debit Warranty Expense and credit Warranty Liability
Debit Warranty Liability and credit Warranty Expense
On July 1, 2019, Alex Company borrows $30,000 from City Bank and signs a 4- months, 5%, $30,000 interest bearing note. The payment date is *
October 1, 2019
November 1, 2019
December 1, 2019
January 1, 2020
Dan Corp issues 500 of 10%, $100 par value preferred stock to attorneys who helped the company organize. Attorneys valued their service at $100,000. Preferred Stock should be recorded as: *
Debit $50,000
Credit $50,000
Debit $130,000
Credit $130,000
Which of the following represents the number of shares repurchased from the market? *
Treasury shares
Issued shares
Outstanding shares
Authorized shares
The sale of common stock below par: *
Is a common occurrence
Is not permitted
Is a practice that most shareholders encourage
Requires that a liability be recorded for the difference between the sales price and the par value of the shares.
Question - (1)
Answer -
Dan Corp issues 3000 shares of 10%, preferred stock. The Cash amount is $450000.
In this case the market value is $150 [$450000 / 3000 shares].
Hence, Option - (D) is Correct.
.
Question - (2)
Answer -
On July 1, 2019, Alex Company borrows $30000 from City Bank and signs a 4- months, 5%, $30000 interest bearing note.
Interest Expense is $500 [($30000 * 5%) * 4 months / 12 moths].
Hence, Option - (A) is Correct.
.
Question - (3)
Answer -
Lili Company’s products are subject to a 1-year warranty. During 2019, the company sold 300000 units, of which the company estimates 4% will be defective. During the year, the company honored warranty contracts for 6000 units. When honoring warranty contracts, the company must Debit Warranty Liability and Credit Repair Parts.
Hence, Option - (A) is Correct.
.
Question - (4)
Answer -
On July 1, 2019, Alex Company borrows $30000 from City Bank and signs a 4- months, 5%, $30000 interest bearing note. The payment date is November 1, 2019.
Hence, Option - (B) is Correct.