Daffy Duct, Inc., began operations in January by issuing 100,000 shares of $1 par value common stock for $5 per share. It also issued 10,000 shares of $50 par value, 5%, cumulative preferred stock for $50 each. Net income for the year was $500,000 and dividends were $44,000. What happens to assets?
A. 0 No Effect
B. 100,000 Cash
C. (100,000) Cash
D. 500,000 Common Stock
E. 100,000 Common Stock
F. (100,000) Common Stock
G. (500,000) Common Stock
H. 500,000 Cash
I. (500,000) Cash
J. 400,000 Common Stock; 100,000 Paid-in Capital in Excess of Par
K. 100,000 Common Stock; 400,000 Paid-in Capital in Excess of Par
L. (400,000) Common Stock; (100,000) Paid-in Capital in Excess of Par
M. (100,000) Common Stock; (400,000) Paid-in Capital in Excess of Par
Ans: H. 500,000 Cash
You might also like to view...
Which of the following statements describes why accrual accounting better reflects a business's performance as compared to the cash basis?
a. Revenues are always recorded in the period in which they are earned when services and products are delivered. b. Comparability of financial statements is improved. c. Expenses are always recognized in the period in which they are incurred.
Which of the following is a provision of the Uruguay Round Agreement?
A. A wide range of services were to be excluded from GATT fair trade and market access rules. B. Tariffs on industrial goods were to be raised by more than one-third, and tariffs were to be scrapped on more than 50 percent on a wide range of services. C. The International Monetary Fund (IMF) was to be created to implement the GATT agreement. D. Barriers on trade in textiles were to be significantly reduced over 10 years. E. Average tariff rates imposed by developed nations on manufactured goods were to be raised by 20 percent of the value, the highest level in modern history.