ACCTG 433 ACTUAL EXAM 2026 QUESTIONS
WITH ANSWERS GRADED A+
◉ On September 14, 2021, Bramble Company reacquired 16300 shares
of its $1 par value common stock for $45 per share. Bramble uses the
cost method to account for treasury stock. The Journal entry to record
the reacquisition of the stock should debit. Answer: Treasury stock for
$733500
◉ The diluted EPS computation considers all of the following except the
impact of. Answer: antidilutive securities
◉ Martinez Corporation offered detachable 5-year warrants to buy one
share of common stock (par value $5) at $21 (at a time when the stock
was selling for $33). the price paid for 2600, $1000 bonds with the
warrants attached was $205300. the market price of the Martinez bonds
without the warrants was $182200, and the market price of the warrants
without the bonds was $23200. what amount should be allocated to the
warrants using the proportional method. Answer: 23189
◉ Treasury Stock. Answer: is not an asset; it's a contra stockholders'
equity. Keep the three points in mind:
, 1.A corporation may later sell treasury stock to obtain funds, but that
does not make treasury stock a balance sheet asset.
2.When a corporation buys back some of its stock, it has not acquired an
asset; it reduces net assets before cash is used.
3.The possession of treasury stock does not give the corporation the
right to vote, to exercise preemptive rights as a stockholder, to receive
cash dividends, or to receive assets upon corporate liquidation.
◉ Two acceptable methods of purchasing treasury stock. Answer: •Cost
method (more widely used).
•Par (Stated) value method.
Treasury stock reduces stockholders' equity.
◉ Sale of treasury Stock. Answer: •Above Cost
•Below Cost
Both increase total assets and stockholders' equity.
◉ Retiring Treasury Stock. Answer: Decision results in
•cancellation of the treasury stock and
a reduction in the number of shares of issued stock
WITH ANSWERS GRADED A+
◉ On September 14, 2021, Bramble Company reacquired 16300 shares
of its $1 par value common stock for $45 per share. Bramble uses the
cost method to account for treasury stock. The Journal entry to record
the reacquisition of the stock should debit. Answer: Treasury stock for
$733500
◉ The diluted EPS computation considers all of the following except the
impact of. Answer: antidilutive securities
◉ Martinez Corporation offered detachable 5-year warrants to buy one
share of common stock (par value $5) at $21 (at a time when the stock
was selling for $33). the price paid for 2600, $1000 bonds with the
warrants attached was $205300. the market price of the Martinez bonds
without the warrants was $182200, and the market price of the warrants
without the bonds was $23200. what amount should be allocated to the
warrants using the proportional method. Answer: 23189
◉ Treasury Stock. Answer: is not an asset; it's a contra stockholders'
equity. Keep the three points in mind:
, 1.A corporation may later sell treasury stock to obtain funds, but that
does not make treasury stock a balance sheet asset.
2.When a corporation buys back some of its stock, it has not acquired an
asset; it reduces net assets before cash is used.
3.The possession of treasury stock does not give the corporation the
right to vote, to exercise preemptive rights as a stockholder, to receive
cash dividends, or to receive assets upon corporate liquidation.
◉ Two acceptable methods of purchasing treasury stock. Answer: •Cost
method (more widely used).
•Par (Stated) value method.
Treasury stock reduces stockholders' equity.
◉ Sale of treasury Stock. Answer: •Above Cost
•Below Cost
Both increase total assets and stockholders' equity.
◉ Retiring Treasury Stock. Answer: Decision results in
•cancellation of the treasury stock and
a reduction in the number of shares of issued stock
