ANSWER THE FOLLOWING QUESTIONS CORRECTLY

7. In 2006, Marly Corp. acquired 9,000 shares of its own $1 par value common stock at $18 per share. In 2007, Marly issued 4,000 of these shares at $25 per share. Marly uses the cost method to account for its treasury stock transactions. What accounts and what amounts should Marly credit in 2007 to record the issuance of the 4,000 shares?
     Treasury     Additional     Retained     Common
        Stock          Paid-in Capital     Earnings         Stock     
a.     $72,000          $70,000
b.     $72,000     $28,000
c.          $96,000          $4,000
d.          $68,000     $28,000     $4,000

8.      The following information is available for Alley Corporation:
January 1, 2008     Shares outstanding     1,250,000
April 1, 2008     Shares issued     200,000
July 1, 2008     Treasury shares purchased     75,000
October 1, 2008     Shares issued in a 100% stock dividend     1,375,000
The number of shares to be used in computing earnings per common share for 2008 is
a.     2,825,500.
b.     2,737,500.
c.     2,725,000.
d.     1,706,250.