QUESTION 1

William Corp. issued 10,000 shares of its $1 par value common stock for a building. The building was listed for sale at $500,000. William's common stock is currently selling for $45 per share. William Corp. should record the building at

$10,000

$440,000

$450,000

$500,000

QUESTION 2

On March 1, 2004, Leo Corp. was formed by issuing 100,000 shares of $1 par value common stock at $5 per share and 20,000 shares of $100 par value preferred stock at $101 per share. If Leo earned $35,000 in its first year of operations, total stockholders' equity at year end would be

$335,000

$735,000.

$2,135,000.

$2,555,000

QUESTION 3

If a company reissued at $20 per share 100 shares of treasury stock that it had previously acquired for $28 per share and there wasn't any Paid-in Capital from Treasury Stock, it would debit

Loss on Sale of Treasury Stock for $800

Paid-in Capital from Common Stock for $800

Retained Earnings for $800

Treasury Stock for $800

QUESTION 4

B Corp. issued 200,000 shares of common stock when it began operations in 2004 and issued an additional 100,000 shares in 2005. B also issued preferred stock convertible into 100,000 shares of common stock. In 2006, B purchased 75,000 shares of its common stock and held it in the treasury. At December 31, 2006, how many shares of B's common stock were outstanding?

400,000

325,000

300,000

225,000

QUESTION 5

Assume that Grandzol Company believes that $120,000 of a $600,000 deduction will not be utilized in future periods and that the tax rate is 40 percent for all periods. What is the amount of the valuation allowance?

$48,000

$120,000

$192,000

$240,000