Please Refer to the Following Information for Petra Sales Company

question 33

Multiple Choice

Please refer to the following information for Petra Sales Company:
• Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
• Paid-in capital in excess of par: $1,600,000
• Retained earnings: $2,440,000
• Treasury stock: 20,000 shares purchased at $12 per share
-
If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, what journal entry is required?

• A) Debit Cash $70,000 and credit Treasury stock $70,000.
• B) Debit Treasury stock $70,000 and credit Cash $70,000.
• C) Debit Treasury stock $70,000 and credit Sales revenue $70,000.
• D) Debit Treasury stock $60,000, debit Paid-in capital $10,000 and credit Cash $70,000.

---

Definitions:

Binary Variable

A variable that can take one of two possible values, typically represented as 0 or 1, indicating the absence or presence of some characteristic.

Double-subscripted Variables

Variables represented with two subscripts, often used in mathematical and economic models to denote the elements of matrices or arrays.

Binary Variable

A variable that takes one of two possible values, often used to represent outcomes like success/failure, yes/no, or true/false.

Demand Constraint

A limitation in operations management that affects the maximum demand that can be satisfied given current resources.