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Week 4 Quiz
All Questions Details given below (Please Check)
Question 1
Treasury stock was acquired for cash at a price in excess of its
original issue price. The treasury stock was subsequently reissued
for cash at a price in excess of its acquisition price. Assuming that
the par value method of accounting for treasury stock
transactions is used, what is the effect on total stockholders'
equity of each of the following events?
Question 2
Murphy Co. had 200,000 shares outstanding of $10 par common
stock on March 30 of the current year. Murphy reacquired 30,000
of those shares at a cost of $15 per share and recorded the
transaction using the cost method on April 15. Murphy reissued
the 30,000 shares at $20 per share and recognized a $50,000 gain
on its income statement on May 20. Which of the following
statements is correct?
Question 3
On January 1, 2005, Celt Corp. issued 9% bonds in the face
amount of $1,000,000, which mature on January 1, 2015. The
bonds were issued for $939,000 to yield 10%, resulting in a bond
discount of $61,000. Celt uses the effective interest method of
amortizing bond discount. Interest is payable annually on
December 31. At December 31, 2005, Celt's unamortized bond
discount should be
Question 4