85. What would be the impact on the accounting equation when a company purchases treasury stock?
a.
|
Increase assets and increase stockholders’ equity.
|
b.
|
Decrease assets and increase stockholders’ equity.
|
c.
|
Decrease assets and decrease stockholders’ equity.
|
d.
|
No effect on the accounting equation.
|
86. The corporation’s own stock that has been issued and then repurchased by the company is referred to as:
a.
|
Preferred Stock.
|
b.
|
Authorized Stock.
|
c.
|
Treasury Stock.
|
d.
|
Common Stock.
|
87. When treasury stock is resold at a gain, the difference between its cost and the cash
received when resold:
a.
|
Increases net income.
|
b.
|
Increases stockholders’ equity.
|
c.
|
Has no effect on net income or stockholders’ equity.
|
d.
|
Increases net income but decreases stockholders’ equity.
|
88. Crossroads Mall had 100,000 outstanding shares of common stock. On June 16, 2015, Crossroads repurchased 20,000 shares of its own stock at $30 per share. On July 23, 2015, Crossroads resold 10,000 shares at $28 per share. What
net
effect did the repurchase and the resell of common stock have on the accounting equation?
a.
|
Increase in assets and decrease in stockholders’ equity.
|
b.
|
Decrease in assets and increase in stockholders’ equity.
|
c.
|
Increase in assets and increase in stockholders’ equity.
|
d.
|
Decrease in assets and decrease in stockholders’ equity.
|
89. On December 2, Coley Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On December 20, Coley Corp. reissued 400 shares for $15 each. Which of the following is correct regarding the journal entry for the reissued shares?
a.
|
Debit Cash $15,000.
|
b.
|
Credit Treasury Stock $10,800.
|
c.
|
Credit Paid in Capital - Treasury Stock $5,200.
|
d.
|
Credit Treasury Stock $6,000.
|
90. On November 6, Coleman Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On November 20, Coleman Corp. reissued 400 shares for $30 each. Which of the following is correct regarding the effect of the journal entry for the reissued shares?
a.
|
Assets decrease.
|
b.
|
Liabilities decrease.
|
c.
|
Expenses increase.
|
d.
|
Stockholders’ Equity increases.
|
91. On February 22, Brett Corporation reacquired 200 shares of its $5 par value common stock for $25 each. On March 15, the company reissued 70 shares for $30 each. What is true of the entry for reissuing their shares?
a.
|
Credit Cash $1,750.
|
b.
|
Credit Additional Paid in Capital $350.
|
c.
|
Debit Treasury Stock $1,750.
|
d.
|
Credit Treasury Stock $2,100.
|
92. Retained Earnings represent a company's:
a.Net income less dividends since the company first started.
b.Undistributed net assets.
c.Extra paid-in capital.
d.Undistributed cash.
93. The Retained Earnings balance reported on the balance sheet typically is not affected by:
a.Net income.
b.Net loss.
c.Dividends paid.
d.Stock splits.
94. The balance of Retained Earning at the end of the year represents:
a.
|
Current year’s profits less payments to owners.
|
b.
|
Total earnings less payments to owners over the life of the company.
|
c.
|
Total contributions from owners less withdrawals over the life of the company.
|
d.
|
Total earnings over the life of the company.
|