Ac 410 Final Exam


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  1. Question: When common stock is issued at an amount greater than par value, the difference between the par value and the proceeds from the sale is recorded by
2. Question: On January 1, 2010, Marvel, Inc., grants a compensatory stock option plan to 10 of its executives. The plan allows each executive to buy 1,000 shares of its $1 par common stock at $30 a share after a three-year service period. The value of each option is estimated to be $8. The company estimates it will have an annual 2% employee turnover rate during the service period. What is the compensation expense for the year ended December 31, 2011?
3. Question: Battleground, Inc. had never had a treasury stock transaction prior to 2010. It experienced the following treasury stock transactions during 2010:
4/1/2010: Reacquired 1,000 shares of its own $5 par common stock, originally sold at $12 a share, for $10 a share. This was the first time that Battleground had reacquired its own stock.
4/8/2010: Reissued 400 shares at $8 a share.
5/2/2010: Reissued 500 shares at $13 a share.
5/10/2010: Retired the remaining 100 shares.
Assuming the cost method is used, the entry to record the reissuance of 400 shares on 4/8/2010 would include a
credit to Treasury Stock for $3,200
debit to Additional Paid-in Capital from Treasury Stock for $800
debit to Retained Earnings for $800
credit to Additional Paid-in Capital on Common Stock for $800
  4. Question: When calculating earnings per share, dividends declared on noncumulative preferred stock, but not paid, should be
5. Question: Which of the following items would not be included in a basic earnings per share calculation?
undeclared dividends on noncumulative preferred stock
declared dividends on noncumulative preferred stock
undeclared dividends on cumulative preferred stock