Kunze Corporation Has $1 Par Value Common Stock with 100,000

question 63

Multiple Choice

Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued.The journal entry to record Kunze's purchase of 10,000 shares of common stock at $4 per share would be:

• A)debit Common Stock for $10,000,debit Paid-in Capital in Excess of Par-Common for 30,000 and credit Cash for $40,000.
• B)debit Common Stock for $40,000 and credit Cash for $40,000.
• C)debit Cash for $40,000,credit Common Stock for $10,000 and credit Paid-in Capital in Excess of Par-Common for $30,000.
• D)debit Treasury Stock for $40,000 and credit Cash for $40,000.

Understand the concept of incremental analysis in making marketing decisions.

Comprehend the role of trade discounts in the distribution channel and their effect on pricing strategies.

Recognize the use of cash discounts as an incentive for early payment by retailers to manufacturers.

Grasp the principles behind setting prices through trade discount series.

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Definitions:

Vocal Cords

Folds of tissue in the throat that vibrate and produce sound when air is expelled from the lungs, enabling speech.

High Pitch

Frequencies of sound that are higher and usually perceived as sharper by the human ear.

Gestalt Psychology

A theory of mind which posits that psychological phenomena must be viewed as organized, structured wholes (Gestalts) rather than the sum of their parts.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.