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
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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.

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Definitions:

Normal Curve

A symmetrical, bell-shaped curve representing the distribution of a set of data that is evenly distributed around the mean.

Point Estimate

A single value estimate of a parameter that best describes an aspect of a population based on sample data.

True Proportion

The actual ratio of individuals or items within a specified category to the total population, often used in statistical analysis to represent an exact value.

Sampling Distribution

The distribution of a statistic based on all possible random samples that can be drawn from a given population.