Question;#1Tallos Company reported retained earnings at December 31, 2013, of;$410,000. Tallos had 160,000 shares of common stock outstanding throughout;2014.;The following;transactions occurred during 2014.;1. An;error was discovered in 2012, depreciation expense was recorded at $60,000, but;the correct amount was $50,000.;2. A cash;dividend of $0.50 per share was declared and paid.;3. A 5%;stock dividend was declared and distributed when the market price per share was;$15 per share.;4. Net;income was $225,000.;Instructions;Prepare a retained earnings statement for 2014.;#2On June 30, 2014, Griffin, Inc. sold $3,000,000 (face value) of bonds.;The bonds are dated June 30, 2014, pay interest semiannually on December 31 and;June 30, and will mature on June 30, 2017. The following schedule was prepared;by the accountant for Griffin, Inc. for 2014.;Semi-Annual Interest;to Interest Unamortized Bond;Interest;Period be Paid Expense Amortization;Amount Carrying Value;$75,000 $2,936,625;1 $120,000 $131,625 $11,625 63,375 1,936,625;Instructions;On the basis;of the above information, answer the following questions. (Round your answer to;the nearest dollar or percent.);1. What is;the stated interest rate for this bond issue?;2. What is;the market interest rate for this bond issue?;3. What;was the selling price of the bonds as a percentage of the face value?;4. Prepare;the journal entry to record the sale of the bond issue on June 30, 2014.;5. Prepare;the journal entry to record the payment of interest and amortization on;December 31, 2014.;#3 An;inexperienced accountant for Riley Corporation made the following entries.;July 1 Cash 240,000;Common Stock 240,000;(Issued 15,000;shares of no-par common stock, stated value $10 per share);Sept. 1 Common;Stock 32,000;Retained Earnings 4,000;Cash 36,000;(Purchased 2,000;shares issued on July 1 for the treasury at $18 per share);Dec. 1 Cash 20,000;Common Stock 16,000;Gain on Sale of Stock 4,000;(Sold 1,000 shares;of the treasury stock at $20 per share);Instructions;(a) On;the basis of the explanation for each entry, prepare the entry that should;have been made for the transactions. (Omit explanations);(b) Prepare;the correcting entries that should be made NOW to correct the accounts;of Riley Corporation. (i.e. DO NOT REVERSE THE ORIGINAL ENTRY).;#4 Presented;below are three independent situations;(a) Foreman;Corporation purchased (called) $380,000 of its bonds on June 30, 2014, at 102;and immediately retired them. The carrying value of the bonds on the retirement;date was $371,500. The bonds pay semiannual interest and the interest payment;due on June 30, 2014, has been made and recorded.;(b) Shittu;Inc. purchased (called) $400,000 of its bonds at 96 on June 30, 2014, and;immediately retired them. The carrying value of the bonds on the retirement;date was $395,000. The bonds pay semiannual interest and the interest payment;due on June 30, 2014, has been made and recorded.;(c) Estivariz;Company has $80,000, 10%, 12-year convertible bonds outstanding. These bonds;were sold at face value and pay semiannual interest on June 30 and December 31;of each year. The bonds are convertible into 40 shares of Estivariz $4 par;value common stock for each $1,000 par value bond. On December 31, 2014, after;the bond interest has been paid, $30,000 par value of bonds were converted. The;market value of Estivariz?s common stock was $38 per share on December 31;2014. (Hint: See Ch. 15, p.679-680, 10e or p.695-696, 11e);Instructions;For each of;the independent situations, prepare the journal entry to record;the retirement or conversion of the bonds.;#5Garcia Company;purchased 50 Pear Company 12%, 10-year, $1,000 bonds on January 1, 2014, for;$52,000. Garcia Company also had to pay $500 of broker's fees. The bonds pay;interest semiannually, on January 1 and July 1. On January 1, 2015, after;receipt of interest, Garcia Company sold 30 of the bonds for $30,500.;Instructions;Prepare the journal entries to record the;transactions described above.;#6The following information is available for;Perryman Corporation for the year ended December 31, 2014: Sales $900,000;Other revenues and gains $72,000, Operating expenses $110,000, Cost of goods;sold $520,000, Other expenses and losses $32,000, Preferred stock dividends;$30,000. The company's tax rate was 20%, and it had 40,000 shares outstanding;during the entire year.;Instructions;(a) Prepare a corporate income;statement.;(b) Calculate earnings per;share.;#7 Bouvier Corporation issues a $9,000,000, 5%, 20-year mortgage note;payable on December 31, 2014, to obtain needed financing for the construction;of a building addition. The terms provide for semiannual installment payments;of $289,409 on June 30 and December 31.;Instructions;(a) Prepare;the journal entries to record the mortgage loan on December 31, 2014, and the;first installment payment.;(b) Will;the amount of principal reduction in the second installment;payment be more or less than with the first installment payment?;(Hint: Remember when I drew the graph of;a level mortgage payment on the board? AND What is interest?);#8Natal Company purchased 35,000 shares of common stock of Pear;Corporation as a long-term investment for $700,000. During the year, Pear;Corporation reported net income of $300,000 and paid dividends of $100,000.;Instructions;(a) Assuming;that the 35,000 shares represent a 10% interest in Pear;Corporation;1. Prepare;the journal entry to record the investment in Pear Corporation stock.;2. Prepare;any entries that Natal Company should make in accounting for its investment in;Pear Corporation stock during the year.;3. What;is the balance of the Stock Investments account on Natal Company's books at the;end of the year?;(b) Repeat requirements (a) 1. 2. and 3. above;except assume that the 35,000 shares represent a 20% interest in;Pear Corporation.;#9Presented below are three different aircraft lease transactions that;occurred for Jewell Airways in 2014. All the leases start on January 1, 2014. In;no case does Jewell Airways receive title to the aircraft during or at the end;of the lease period, nor is there a bargain purchase option.;Lessor;Allstate Insurance Premier Leasing GE Capital Leasing;Type of;property 747;Aircraft 727 Aircraft L-1011 Aircraft;Yearly rental $8,508,645 $6,357,660 $2,851,861;Lease term 15;years 20 years 15 years;Estimated;economic life 25;years 25 years 25 years;Fair market;value of;leased asset $80,000,000 $63,000,000 $32,000,000;Present value;of lease;rental payments $73,000,000 $54,000,000 $28,000,000;Instructions;(a) Which;of the above leases are operating leases and which are capital leases? Explain;your answer. (Hint: OWNS);(b) How;should the lease transaction with Allstate Insurance be recorded in 2014?;(c) How should the lease transaction with GE;Capital Leasing be recorded in 2014?;#10On;January 1 Littke Corporation purchased 35% equity in Pear Corporation for;$220,000. At December 31 Pear declared and paid a $60,000 cash dividend and;reported net income of $200,000.;Instructions;(a) Journalize the transactions.;(b) Determine the amount to be reported as an investment in Pear stock;at December 31 by Littke Corporation.
Paper#40466 | Written in 18-Jul-2015Price : $37