Use the following information for questions 71 and 72.

Presented below is information related to Hale Corporation: Common Stock, $1 par Paid-in Capital in Excess of Par—Common Stock Preferred 8 1/2% Stock, $50 par Paid-in Capital in Excess of Par—Preferred Stock Retained Earnings Treasury Common Stock (at cost) 71. The total stockholders' equity of Hale Corporation is a. $9,100,000. b. $9,250,000. c. $7,600,000. d. $7,750,000. The total paid-in capital (cash collected) related to the common stock is a. $4,800,000. b. $5,350,000. c. $5,750,000. d. $5,200,000. Manning Company issued 10,000 shares of its $5 par value common stock having a fair value of $25 per share and 15,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $520,000. How much of the proceeds would be allocated to the common stock? a. $54,167 b. $236,364 c. $270,833 d. $276,250 Norton Company issues 4,000 shares of its $5 par value common stock having a fair value of $25 per share and 6,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $204,000. What amount of the proceeds should be allocated to the preferred stock? a. $182,750 b. $127,500 c. $111,273 d. $95,625 Berry Corporation has 50,000 shares of $10 par common stock authorized. The following transactions took place during 2012, the first year of the corporation’s existence: Sold 10,000 shares of common stock for $18 per share. Issued 10,000 shares of common stock in exchange for a patent valued at $200,000. At the end of the Berry’s first year, total paid-in capital amounted to a. $80,000. b. $180,000. c. $200,000. d. $380,000. Glavine Company issues 6,000 shares of its $5 par value common stock having a fair value of $25 per share and 9,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $312,000. The proceeds allocated to the common stock is a. $32,500 b. $141,818 c. $162,500 d. $170,182 $4,800,000 550,000 2,000,000 400,000 1,500,000 150,000

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Wheeler Company issued 5,000 shares of its $5 par value common stock having a fair value of $25 per share and 7,500 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $260,000. The proceeds allocated to the preferred stock is a. $232,917 b. $162,500 c. $141,818 d. $118,182 Pember Corporation started business in 2007 by issuing 200,000 shares of $20 par common stock for $36 each. In 2012, 30,000 of these shares were purchased for $52 per share by Pember Corporation and held as treasury stock. On June 15, 2013, these 30,000 shares were exchanged for a piece of property that had an assessed value of $810,000. Perber’s stock is actively traded and had a market price of $60 on June 15, 2013. The cost method is used to account for treasury stock. The amount of paid-in capital from treasury stock transactions resulting from the above events would be a. $1,200,000. b. $720,000. c. $585,000. d. $240,000. On September 1, 2012, Valdez Company reacquired 16,000 shares of its $10 par value common stock for $15 per share. Valdez uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit a. Treasury Stock for $160,000. b. Common Stock for $160,000. c. Common Stock for $160,000 and Paid-in Capital in Excess of Par for $60,000. d. Treasury Stock for $240,000. Gannon Company acquired 8,000 shares of its own common stock at $20 per share on February 5, 2012, and sold 4,000 of these shares at $27 per share on August 9, 2013. The fair value of Gannon's common stock was $24 per share at December 31, 2012, and $25 per share at December 31, 2013. The cost method is used to record treasury stock transactions. What account(s) should Gannon credit in 2013 to record the sale of 4,000 shares? a. Treasury Stock for $108,000. b. Treasury Stock for $80,000 and Paid-in Capital from Treasury Stock for $28,000. c. Treasury Stock for $80,000 and Retained Earnings for $28,000. d. Treasury Stock for $96,000 and Retained Earnings for $12,000. Long Co. issued 100,000 shares of $10 par common stock for $1,200,000. Long acquired 10,000 shares of its own common stock at $15 per share. Three months later Long sold 5,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 5,000 treasury shares, Long should credit a. Treasury Stock for $95,000. b. Treasury Stock for $50,000 and Paid-in Capital from Treasury Stock for $45,000. c. Treasury Stock for $75,000 and Paid-in Capital from Treasury Stock for $20,000. d. Treasury Stock for $75,000 and Paid-in Capital in Excess of Par for $20,000. An analysis of stockholders' equity of Hahn Corporation as of January 1, 2012, is as follows: Common stock, par value $20; authorized 100,000 shares; issued and outstanding 90,000 shares Paid-in capital in excess of par Retained earnings Total $1,800,000 700,000 760,000 $3,260,000

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Hahn uses the cost method of accounting for treasury stock and during 2012 entered into the following transactions: Acquired 2,500 shares of its stock for $75,000.

Sold 2,000 treasury shares at $35 per share. Sold the remaining treasury shares at $20 per share. Assuming no other equity transactions occurred during 2012, what should Hahn report at December 31, 2012, as total additional paid-in capital? a. $695,000 b. $700,000 c. $705,000 d. $715,000 83. Percy Corporation was organized on January 1, 2012, with an authorization of 1,200,000 shares of common stock with a par value of $6 per share. During 2012, the corporation had the following capital transactions: January 5 July 28 December 31 issued 900,000 shares @ $10 per share purchased 120,000 shares @ $11 per share sold the 120,000 shares held in treasury @ $18 per share

Percy used the cost method to record the purchase and reissuance of the treasury shares. What is the total amount of additional paid-in capital as of December 31, 2012? a. $-0-. b. $2,760,000. c. $3,600,000. d. $4,440,000. 84. Sosa Co.'s stockholders' equity at January 1, 2012 is as follows: Common stock, $10 par value; authorized 300,000 shares; Outstanding 225,000 shares Paid-in capital in excess of par Retained earnings Total During 2012, Sosa had the following stock transactions: Acquired 6,000 shares of its stock for $270,000. Sold 3,600 treasury shares at $50 a share. Sold the remaining treasury shares at $41 per share. No other stock transactions occurred during 2012. Assuming Sosa uses the cost method to record treasury stock transactions, the total amount of all additional paid-in capital accounts at December 31, 2012 is a. $691,600. b. $670,000. c. $708,400. d. $727,600. 85. Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2012: Common stock, par value $20; authorized 75,000 shares; issued and outstanding 45,000 shares $ 900,000 Paid-in capital in excess of par value 250,000 Retained earnings 300,000 $1,450,000 During 2013, the following transactions occurred relating to stockholders' equity: 3,000 shares were reacquired at $28 per share. 3,000 shares were reacquired at $35 per share. 1,800 shares of treasury stock were sold at $30 per share. $2,250,000 700,000 2,190,000 $5,140,000

For the year ended December 31, 2013, Oaks reported net income of $450,000. Assuming Oaks accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2013, balance sheet? a. $1,765,000. b. $1,761,400. c. $1,757,800. d. $1,315,000. 86. On December 1, 2012, Abel Corporation exchanged 30,000 shares of its $10 par value common stock held in treasury for a used machine. The treasury shares were acquired by Abel at a cost of $40 per share, and are accounted for under the cost method. On the date of the exchange, the common stock had a fair value of $55 per share (the shares were originally issued at $30 per share). As a result of this exchange, Abel's total stockholders' equity will increase by a. $300,000. b. $1,200,000. c. $1,650,000. d. $1,350,000. Luther Inc., has 3,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2013, and December 31, 2012. The board of directors declared and paid a $7,500 dividend in 2012. In 2013, $36,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2013? a. $25,500 b. $18,000 c. $ 10,500 d. $ 9,000 Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2013. There were no dividends declared in 2011. The board of directors declares and pays a $90,000 dividend in 2012 and in 2013. What is the amount of dividends received by the common stockholders in 2013? a. $30,000 b. $50,000 c. $90,000 d. $0 Colson Inc. declared a $240,000 cash dividend. It currently has 9,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Colson distribute to the common stockholders? a. $114,000. b. $126,000. c. $177,000. d. None.

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90.Pierson Corporation owned 10,000 shares of Hunter Corporation. These shares were purchased in 2009 for $90,000. On November 15, 2013, Pierson declared a property dividend of one share of Hunter for every ten shares of Pierson held by a stockholder. On that date, when the market price of Hunter was $21 per share, there were 90,000 shares of Pierson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Gain Net Reduction in Retained Earnings a. $0 $189,000 b. $0 $ 81,000 c. $108,000 $ 81,000 d. $108,000 $ 27,000

91.

Stinson Corporation owned 30,000 shares of Matile Corporation. These shares were purchased in 2009 for $270,000. On November 15, 2013, Stinson declared a property dividend of one share of Matile for every ten shares of Stinson held by a stockholder. On that date, when the market price of Matile was $21 per share, there were 270,000 shares of Stinson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Gain Net Reduction in Retained Earnings a. $0 $243,000 b. $0 $567,000 c. $324,000 $81,000 d. $324,000 $243,000 Winger Corporation owned 300,000 shares of Fegan Corporation stock. On December 31, 2012, when Winger's account "Equity Investment (Fegan Corporation") had a carrying value of $5 per share, Winger distributed these shares to its stockholders as a dividend. Winger originally paid $8 for each share. Fegan has 1,000,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Fegan share was $7 on the declaration date and $9 on the distribution date. What would be the reduction in Winger's stockholders' equity as a result of the above transactions? a. $1,200,000. b. $1,500,000. c. $2,400,000. d. $2,700,000.

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Gibbs Corporation owned 20,000 shares of Oliver Corporation’s $5 par value common stock. These shares were purchased in 2009 for $180,000. On September 15, 2013, Gibbs declared a property dividend of one share of Oliver for every ten shares of Gibbs held by a stockholder. On that date, when the market price of Oliver was $21 per share, there were 180,000 shares of Gibbs outstanding. What NET reduction in retained earnings would result from this property dividend? a. $162,000 b. $378,000 c. $108,000 d. $216,000 Melvern’s Corporation has an investment in 10,000 shares of Wallace Company common stock with a cost of $436,000. These shares are used in a property dividend to stockholders of Melvern’s. The property dividend is declared on May 25 and scheduled to be distributed on July 31 to stockholders of record on June 15. The fair value per share of Wallace stock is $63 on May 25, $66 on June 15, and $68 on July 31. The net effect of this property dividend on retained earnings is a reduction of a. $680,000. b. $660,000. c. $630,000. d. $436,000.

94.

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