Table 14-3
Following Is the Shareholders' Equity Section of the Balance

question 171

Multiple Choice

Table 14-3
Following is the shareholders' equity section of the balance sheet of Monty Corporation:
$$\begin{array} { | l| r | } \hline \text { Contributed capital: } & \\\hline \text { Preferred shares, } \$ 2.50 \text {, cumulative, } 35,000 \text { shares } & \\\hline \text { authorized, } 7,000 \text { shares issued } & \$ 350,000 \\\hline \text { Common shares, } 140,000 \text { shares authorized, } & \\\hline 50,000 \text { shares issued } & 452,500 \\\hline\\\hline \text { Total contributed capital } & 802,500 \\\hline \text { Retained earnings } & 204,500 \\\hline \text { Total shareholders' equity } & \$ 1,007,000 \\\hline\end{array}$$
-Refer to Table 14-3.The entry to record the sale of 8,000 repurchased shares that cost $10 per share for $13 per share includes a:

• A) debit to retained earnings for $104,000
• B) credit to common shares for $104,000
• C) credit to common shares for $80,000
• D) credit to gain on sale of shares for $24,000

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Definitions:

Milling Department

A specific division within a manufacturing facility where milling processes, such as grinding, crushing, or cutting, are performed on raw materials.

Plantwide Predetermined Manufacturing Overhead Rate

A single overhead rate calculated for an entire manufacturing plant, used to allocate manufacturing overhead costs to products based on a common activity base, such as machine hours.

Machine-Hours

A measure of the total hours that machinery is in operation during the production process.

Markup

The amount added to the cost of a product to create a price point that ensures profit for the company.