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On January 12, Year 1, Gilliam Corporation issued 550 shares of $12 par-value common stock for $15 per share. The number of shares authorized is 5,000, and the number of shares outstanding prior to this transaction was 1,200. Which of the following describes the effect of the January 12 transaction on the financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityCash+Accounts Receivable=Accounts Payable+Common Stock+Paid-in Capital in Excess of ParRevenue−Expense=Net IncomeA.(6,600)+ = +6,600+ − = 6,600 FAB.(8,250)+ = +8,250+ − = 8,250 FAC.(8,250)+ = +6,600+1,650 − = 8,250 FAD.(8,250)+ = +6,600+1,650 − = 6,600 IA

At the end of the accounting period, Houston Company had $7,000 of common stock, paid-in capital in excess of par value–common of $8,800, retained earnings of $7,500, and $4,750 of treasury stock. What is the total amount of stockholders’ equity?

A company recognizes $5,300 of uncollectible accounts expense under the direct write-off method. Which of the choices below is true?

Ron Company experienced an accounting event that had the following effects on its financial statements. Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenues−Expenses=Net Income$ (4,800)= +$ (4,800) −$ 4,800=$ (4,800) Which of the following events could have caused these effects?

Which of the following statements is true regarding aging accounts receivable?

On October 1, Year 1 Hernandez Company loaned $60,000 cash to Acosta Company. The one-year note carried a 6% rate of interest. Which of the following shows how the December 31, Year 1 recognition of accrued interest will affect Hernandez’s financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expense=Net IncomeA.900= +900900− =900900 IAB.900= +900900− =900 C.2,700= +2,7002,700− =2,7002,700 IAD.2,700= +2,7002,700− =2,700

At the end of the current accounting period, Ringgold Company recorded depreciation of $15,000 on its equipment. What is the effect of this event on the company’s balance sheet?

At the end of the accounting period, Houston Company had $12,000 of common stock, paid-in capital in excess of par value–common of $11,000, retained earnings of $12,000, and $4,000 of treasury stock. What is the total amount of stockholders’ equity?

To comply with restrictive bond covenants, Chang corporation appropriated $104,000 of retained earnings. Which of the following shows how the appropriation will affect Chang’s financial statements?

Why are bonds sometimes issued at a discount?