Question

Use the following information to answer the next three questions: On March 1st, Apple Inc. issued...

Use the following information to answer the next three questions:

On March 1st, Apple Inc. issued 1,000 shares of $3 par value stock for a selling price of $10 per share.

On May 1st, Apple Inc. purchased 100 of the 1000 shares issued on March 1st for $15 per share.

On June 1st, Apple reissued 100 shares for $20 per share.

1. What journal entry did Apple record on March 1st?

A.

Dr Cash $3k; Cr- Common Stock $3k; Dr-APIC $7k; Cr- Retained Earnings $7k.

B.

Dr Cash $10k; Cr- Common Stock $3k; Cr-APIC $7k

C.

Dr Cash $10k; Cr- Common Stock $7k; Cr-APIC $3k

D.

Cr Cash $10k; Dr- Common Stock $7k; Dr-APIC $3k

2. What journal entry did Apple record on May 1st?

A.

Dr. Common Stock $1,500; Cr- APIC $1,500

B.

Dr Treasury Stock $1,500; Cr. Common Stock $1,500

C.

Dr.- Cash $1,500; Cr. Treasury Stock $1,500

D.

Dr Treasury Stock $1,500; Cr- Cash $1,500

3. What journal entry did Apple record on June 1st?

A.

Dr.- Cash $2k; Cr. Treasury Stock $1,500; Cr. APIC $500

B.

Cr.- Cash $20k; Dr. Treasury Stock $15,000 Dr. APIC $5000

C.

Cr.- Cash $2k; Dr. Treasury Stock $1,500; Dr. APIC $500

D.

Dr.- Cash $20k; Cr. Treasury Stock $15,000 Cr. APIC $5000
Business   Accounting   
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Homework Answers

Answer #1
Date Account titles and explanation Debit(in $) Credit(in $)
Mar-01 Cash 10000
Common stock 7000
APIC-Common Stock 3000
So Option B is answer
May-01 Treasury Stock(100*$15) 1500
Cash(100*$15) 1500
So Option D is answer
Jun-01 Cash(100*$20) 2000
Treasury Stock(100*$15) 1500
APIC-Treasury Stock(100*$5) 500
So Option A is answer
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