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should Brad credit to Common Stock and to Additional Paid-in
Capital -- Common Stock as a result of the conversion?
Question 15
A company declared a cash dividend on its common stock on
December 15, 2003, payable on January 12, 2004. How would this
dividend affect stockholders' equity on the following dates?
Question 16
Beck Corp. issued 200,000 shares of common stock when it began
operations in 2003 and issued an additional 100,000 shares in
2004. Beck also issued preferred stock convertible to 100,000
shares of common stock. In 2005, Beck purchased 75,000 shares
of its common stock and held it in Treasury. At December 31,
2005, how many shares of Beck's common stock were
outstanding?
Question 17
On January 2, 2005, Nast Co. issued 8% bonds with a face
amount of $1,000,000 that mature on January 2, 2011. The bonds
were issued to yield 12%, resulting in a discount of $150,000. Nast
incorrectly used the straight-line method instead of the effective
interest method to amortize the discount. How is the carrying
amount of the bonds affected by the error?
Question 18
Deb Co. records all sales using the installment method of
accounting. Installment sales contracts call for 36 equal monthly
cash payments. According to the FASB's conceptual framework,
the amount of deferred gross profit relating to collections 12
months beyond the balance sheet date should be reported in the