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Multiple Choice Questions in Accounts

5. Fenway Company sells 1,000 shares of treasury stock for $32,000. The shares had been previously acquired for $24,000. The $8,000 received over cost should be credited to

a. an asset account.
b. a paid-in capital account.
c. a revenue account.
d. retained earnings.

6. The X Company has the following stock outstanding:

6% Preferred stock, $100 par value, cumulative $300,000
Common stock, $50 par value $600,000

Preferred stock dividends are in arrears for 2002 and 2003. If the company declares and pays $50,000 in dividends in 2004, the amount received by the preferred stockholders would be

a. $36,000.
b. $18,000.
c. $54,000.
d. $50,000.

Solution Preview

5. Fenway Company sells 1,000 shares of treasury stock for $32,000. The shares had been previously acquired for $24,000. The $8,000 received over cost should be credited to

a. an asset account.
b. a paid-in capital account.
c. a revenue account.
d. retained earnings.

Answer: b. a paid-in ...

Solution Summary

Answers 2 Multiple Choice Questions in Accounts on treasury stock and dividends to preferred shareholders.

$2.19