Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current market value of $3,000.Whichof the following is not part of the journal entry for tis transaction?
A.Debiting Equipment for $3,000
B.Crediting Common Stock for $3,000
C.Crediting Common Stock for $2,400
D.Crediting Paid in Capital in Excess of Par_common for $600
My answer B
Isaiah Corporation's Accounts Receivable increased by $35,00 and its Accounts Payable Decreased by $18,000.What is the net effect on cash from operations under the indirect method?
A.-$53,000
B.+$35,000
C.+$17,000
D.-$18,000
My answer is c
Case company has 5,000 shares of treasury cost that it purchased for $13 per share. It later resold 2,000 of those shares for $17 per share. The amount to be credited to Paid-in Capital--Treasury Stock is
A.$26,000
B.$34,000
C.$8,000
D.$30,000
My answer is A
I need somebody to check my answers thank you
For the first question, your answer B is correct. The correct answer is C, Crediting Common Stock for $2,400.
For the second question, your answer C is incorrect. The correct answer is D, -$18,000. This is because the increase in Accounts Receivable is an outflow of cash, while the decrease in Accounts Payable is an inflow of cash. Therefore, the net effect on cash from operations is a decrease of $18,000.
For the third question, your answer A is correct. The correct answer is A, $26,000. This is because the amount credited to Paid-in Capital - Treasury Stock is calculated as the difference between the sale price ($17) and the purchase price ($13) multiplied by the number of shares sold (2,000). Therefore, the amount to be credited is $26,000.
For the first question: Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current market value of $3,000. The journal entry for this transaction would include:
A. Debiting Equipment for $3,000 - This is correct, as the equipment is being acquired.
B. Crediting Common Stock for $3,000 - This is correct, as common stock is being issued.
C. Crediting Common Stock for $2,400 - This is incorrect. The par value of each share is $12, so the correct credit to Common Stock would be $12 x 200 shares = $2,400.
D. Crediting Paid-in Capital in Excess of Par_common for $600 - This is correct, as any excess over the par value of the stock is recorded in the Paid-in Capital in Excess of Par account.
Therefore, the correct answer is C, "Crediting Common Stock for $2,400."
For the second question: Isaiah Corporation's Accounts Receivable increased by $35,000 and its Accounts Payable decreased by $18,000. The net effect on cash from operations under the indirect method would be:
Increase in Accounts Receivable: -$35,000 (Negative since it's an increase in an asset)
Decrease in Accounts Payable: +$18,000 (Positive since it's a decrease in a liability)
Therefore, the net effect on cash from operations would be -$35,000 + $18,000 = -$17,000 (Option C).
For the third question: The amount to be credited to Paid-in Capital--Treasury Stock can be calculated based on the cost and selling price of the treasury stock.
Number of treasury stock sold: 2,000 shares
Cost per share: $13
Selling price per share: $17
The amount to be credited to Paid-in Capital--Treasury Stock would be:
(2,000 shares x $17 selling price) - (2,000 shares x $13 cost) = $4,000 - $26,000 = -$22,000
Since it is a credit, the amount is recorded as a negative. Therefore, the correct answer is not listed.