Dallkin Corporation Issued 5,000 Shares of Common Stock on January

question 70

Multiple Choice

Dallkin Corporation issued 5,000 shares of common stock on January 1, 2013. The stock has no par value and was sold at $18 per share. The journal entry for this transaction would:

• A) debit Cash $90,000 and credit Common stock $90,000.
• B) debit Cash $90,000 and credit Paid-in capital $600,000.
• C) credit Cash $90,000 and debit Common stock $90,000.
• D) credit Cash $90,000, debit Paid-in capital $5,000, and debit Common stock $85,000.

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Definitions:

Efficient

The quality of achieving maximum productivity with minimum wasted effort or expense.

Cycle Inventory

Inventory that is held to manage the normal fluctuation of production or supply and demand, rotating through cycles of replenishment.

Safety Inventory

Extra stock kept in storage to guard against uncertainty in demand or supply, ensuring product availability.

Seasonal Inventory

Inventory that is purchased or produced in anticipation of season-based demand increases, such as holiday merchandise.