A Corporation Issued 5,000 Shares of $10 Par Value Common

question 77

Multiple Choice

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $60,000. The entry to record this exchange is:

• A) \(\begin{array}{|c|c|c|}
• \hline \text { Land } & 60,000 & \\
• \hline \text { Common Stock } & & 50,000 \\
• \hline \begin{array}{c}
• \text { Paid-In Capital in Excess of Par Value, } \\
• \text { Common Stock }
• \end{array} & & 10,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|c|c|c|}
• \hline \text { Land } & 60,000 & \\
• \hline \text { Common Stock } & & 60,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|c|c|c|}
• \hline \text { Land } & 50,000 & \\
• \hline \text { Common Stock } & & 50,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|l|l|}
• \hline \text { Common Stock } & 50,000 & \\
• \hline \begin{array}{l}
• \text { Paid-In Capital in Excess of Par Value, } \\
• \text { Common Stock }
• \end{array} & 10,000 & \\
• \hline \text { Land } & & 60,000 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|c|c|c|}
• \hline \text { Common Stock } & 60,000 & \\
• \hline \text { Land } & & 60,000 \\
• \hline
• \end{array}\)

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the financial performance of a company's core activities.

Finished Goods Inventory

The value of a company’s products ready for sale at the end of an accounting period, sitting in the inventory.

Cost of Goods Manufactured

The total production cost of goods that were completed during a specific accounting period.

Underapplied Overhead

The situation where the allocated overhead costs are less than the actual overhead costs incurred.