m ultiple choice computational 71 berlin corporation was organized on january 1 2017 4314601

m ultiple choice computational 71 berlin corporation was organized on january 1 2017 4314601

Multiple Choice—Computational

71.Berlin Corporation was organized on January 1, 2017, with 400,000 no par value common shares authorized. During 2017, the corporation had the following share transactions:

Jan 5Issued 150,000 shares at $10 per share

Apr 6Issued 50,000 shares at $12 per share

Jun 8Issued 50,000 shares at $14 per share

Jul 28Purchased 20,000 shares at $11 per share and cancelled them

Dec 31Issued 20,000 shares at $18 per share

What is the total amount of contributed surplus at December 31, 2017?

a) $0

b) $4,000

c) $20,000

d) $220,000

72.RomeCorp. was organized on January 1, 2017, with the following authorized share capital:

20,000 common shares, no par value

6,000, $.05, cumulative preferred shares, no par value

During 2017, the corporation issued 10,000 common shares for $350,000 and 5,000 preferred shares at $24 per share. On December 20, 2017, subscriptions for 1,000 preferred shares were taken at a purchase price of $30. These subscribed shares were paid for on January 2, 2018. What shouldRome report as total contributed capital on its December 31, 2017, balance sheet?

a) $440,000

b) $450,000

c) $470,000

d) $500,000

73.The total amount in the Common Shares account at December 31, 2017 is

a) $2,170,000.

b) $2,016,250.

c) $2,007,250.

d) $1,990,000.

74.The total amount of contributed surplus at December 31, 2017 is

a) $0.

b) $26,250.

c) $153,750.

d) $180,000.

Use the following information to answer questions 75–76.

Prague Corp. is authorized to issue 400,000 no par value common shares. Subscribers agree to purchase shares at $15 per share with a 30% down payment.

75.Assume that subscribers agree to purchase50,000 shares and make the required down payment. The journal entry to record receipt of the subscriptions includes a

a) debit to Common Shares Subscribed for $750,000.

b) credit to Common Shares Subscribed for $750,000.

c) credit to Common Shares for $225,000.

d) credit to Subscriptions Receivable for $525,000.

76.The journal entry to record the issuance of the shares upon receipt of the final instalment includes a

a) debit to Common Shares Subscribed for $750,000.

b) credit to Common Shares for $525,000.

c) credit to Common Shares for $225,000.

d) debit to Subscriptions Receivable for $525,000.

77.Presented below is information related to Madrid Corporation:

Subscriptions Receivable, Common Shares……..$ 120,000

Common Shares, no par value………………3,810,000

Common Shares Subscribed………………..240,000

$4 Preferred Shares, no par value…………….1,440,000

Retained Earnings……………………….900,000

The total amount that will be added to the Common Shares account when the final subscriptions are received will be

a) $120,000.

b) $240,000.

c) $360,000.

d) cannot be determined from the information given.

78.Scrooge Ltd.owns 100,000 shares of Marley Ltd. common shares, which are being accounting for by the equity method. On December 15, 2017, when Scrooge's “Investment in Common Shares of Marley Ltd.” account has a carrying value of $5 per share, Scroogedeclares all these shares to its shareholders as a property dividend, to be distributed on December 31, 2017. Scrooge had originally paid $8 for each share. Marley has 1,000,000 shares issued and outstanding, for which the quoted market price was $7 per share on the declaration date and $9 per share on the distribution date.Ignoring income taxes, what would be the reduction in Scrooge's shareholders' equity as a result of the above transactions?

a) $500,000

b) $700,000

c) $800,000

d) $900,000

79.Lisbon Corp. has 1,000,000 no par common shares authorized, of which 800,000 shares are outstanding. The average carrying value of the shares is $5 per share. When the market value was $10 per share,Lisbon declared a 10% stock dividend. What entry, if any, should Lisbon make to record this dividend declaration?

a) No entry

b) Retained Earnings…………………………………400,000

Common Stock Dividend Distributable………………400,000

c) Retained Earnings…………………………………800,000

Common Stock Dividend Distributable………………800,000

d) Stock Dividend Payable……………………………..800,000

Common Stock Dividend Distributable………………800,000

80.On June 30, 2017, when ViennaInc.'s shares were selling at $65 per share, its capital accounts were as follows:

CommonShares, no par,60,000 shares issued

and outstanding…………………………….$2,400,000

Retained Earnings……………………………..3,600,000

If a 5% stock dividend were declared and distributed, the Common Shares account balance would be

a) $2,205,000.

b) $2,400,000.

c) $2,595,000.

d) $3,600,000.

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