Questions -

Q1. The charter of a corporation provides for the issuance of 119,000 shares of common stock. Assume that 55,000 shares were originally issued and 13,900 were subsequently reacquired. What is the number of shares outstanding?

A. 119,000

B. 13,900

C. 41,100

D. 55,000

Q2. A corporation purchases 7,304 shares of its own $4 par common stock for $16 per share, recording it at cost. What will be the effect on total stockholders' equity?

A. increase by $116,864

B. increase by $87,648

C. decrease by $87,648

D. decrease by $116,864

Q3. What is the total stockholders' equity based on the following account balances?

Common Stock $375,000

Paid-In Capital in Excess of Par 90,000

Retained Earnings 190,000

Treasury Stock 15,000

A. $670,000

B. $565,000

C. $655,000

D. $640,000

Q4. The Dayton Corporation began the current year with a retained earnings balance of $17,674. During the year, the company corrected an error made in the prior year, which was a failure to record a depreciation expense of $2,040 on equipment. Also, during the current year, the company earned net income of $10,136 and declared cash dividends of $5,836. Compute the year end retained earnings balance.

A. $19,934

B. $17,674

C. $21,974

D. $35,686