Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 1.3.2E
Multiple-Choice Questions on Reported Balances [AICPA Adapted]
Select the correct answer for each of the following questions.
2. On January 1, 20X1, Portland Corporation issued 10,000 shares of common stock in exchangefor all of Stockton Corporation’s outstanding stock. Condensed balance sheets of Portlandand Stockton immediately before the combination follow:
![Chapter 1, Problem 1.3.2E, Multiple-Choice Questions on Reported Balances [AICPA Adapted] Select the correct answer for each of](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9781259916977/Chapter-1/images/html_16977-1-1.3.2e_image001.jpg)
Portland’s common stock had a market price of $60 per share on January 1, 20X1. The marketprice of Stockton’s stock was not readily determinable. The fair value of Stockton’s net identifiable assets was determined to be $570,000. Portland’s investmentin Stockton’s stock will bestated in Portland’s
a. $350,000.
b. $500,000.
c. $570,000.
d. $600,000.
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Required information
The following information applies to the questions displayed below]
Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $1 par value. During its first
year, the following selected transactions were completed:
a. Issued 5,400 shares of common stock for cash at $24 per share.
b. Issued 1,400 shares of common stock for cash at $27 per share.
3. Prepare the stockholders' equity section as it should be reported on the year-end balance sheet. At year-end, the accounts
reflected net income of $200.
INCENTIVE CORPORATION
Balance Sheet (Partial)
At December 31
Stockholders' Equity
Contributed Capital:
Total Contributed Capital
Total Stockholders' Equity
Required information
[The following information applies to the questions displayed below.]
Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $1 par value. During its first
year, the following selected transactions were completed:
a. Issued 5,400 shares of common stock for cash at $24 per share.
b. Issued 1,400 shares of common stock for cash at $27 per share.
Required:
1. Complete the table below, indicating the account, amount, and direction of the effect for the above transactions. (Enter any
decreases to account balances with a minus sign.)
Assets
Liabilities
Stockholders' Equity
Required information
[The following information applies to the questions displayed below.]
Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $2 par value. During its first
year, the following selected transactions were completed:
a. Issued 5,500 shares of common stock for cash at $20 per share.
b. Issued 1,500 shares of common stock for cash at $23 per share.
Required:
1. Complete the table below, indicating the account, amount, and direction of the effect for the above transactions. (Enter any
decreases to account balances with a minus sign.)
Assets
Liabilities
Stockholders' Equity
а.
b.
Chapter 1 Solutions
Advanced Financial Accounting
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