For the Current Year Ended, ABC Had the Following Transactions

question 53

Multiple Choice

For the current year ended, ABC had the following transactions:
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Issued 10,000 shares of $2 par common stock for $12 per share.Issued 3,000 shares of $50 par, 6% preferred stock for $70 per share.Purchased 1,000 shares of previously issued common stock for $15 per share.Reported net income of $200,000.
Declared and paid a total dividend of $40,000.
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Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) .
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-$150,000

• A)Treasury stock
• B)Retained earnings
• C)Preferred stock
• D)Excess of issue price over par (preferred)
• E)Common stock
• F)Total paid-in capital
• G)Excess of issue price over par (common)
• H)Total stockholders' equity

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Definitions:

Promissory Note

A financial instrument containing a written promise by one party to pay a certain sum of money to another party under specified conditions.

Revolving Line of Credit

A flexible loan arrangement which allows a borrower to use, repay, and re-borrow funds up to a certain credit limit.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned freely from one party to another.

Default

Failure to fulfill a legal obligation, especially failing to make a required payment on a loan or financial agreement.