Porter Corp

question 82

Multiple Choice

Porter Corp. purchased its own par value stock on January 1, 2014 for $20,000 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $12,000. The $8,000 difference between the cost and sales price should be recorded as a deduction from

• A) additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
• B) additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein.
• C) retained earnings.
• D) net income.

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Definitions:

Coil Winding Leads

The ends of the wire used in coil windings, serving as connections points for electrical current to enter or leave the coil.

NEMA

An organization representing electrical equipment and medical imaging manufacturers, known for developing performance standards to promote safety and efficiency.

Locked-rotor Starting Current

The high current drawn by an electric motor at startup when the rotor is not yet moving, also known as the starting current.