1. Murphy Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

a. Stock Dividends for $210,000.

b. Paid-in Capital in Excess of Par for $840,000.

c. Common Stock for $210,000.

d. Common Stock Dividends Distributable for $210,000.

2. Nick Corporation began business by issuing 400,000 shares of $5 par value common stock for $24 per share. During its first year, the corporation sustained a net loss of $100,000. The year-end balance sheet would show

a. Common stock of $1,900,000.

b. Common stock of $9,600,000.

c. Total paid-in capital of $9,500,000.

d. Total paid-in capital of $9,600,000.

3. Corporations invest in other companies for all of the following reasons except to

a. house excess cash until needed.

b. generate earnings.

c. meet strategic goals.

d. increase trading of the other companies stock.

4. On January 1, 2020, Sam's Company purchased at face value, a $1,000, 8% bond that pays interest on January 1 and July 1. Sam's Company has a calendar year end.

The entry for the receipt of interest on July 1, 2020, is

a. Cash...................................................................................... 80

Interest Revenue.......................................................... 80

b. Cash...................................................................................... 40

Interest Revenue.......................................................... 40

c. Cash...................................................................................... 80

Interest Revenue.......................................................... 80

d. Interest Receivable................................................................ 40

Interest Revenue.......................................................... 40

Important note:

PLEASE SHOW WORK FOR ALL QUESTIONS!