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accounts- Wesley Hospital installs a new parking lot. The paving cost $30,000 and the ligh




Question;1.;Wesley Hospital installs a new parking lot. The paving cost;$30,000 and the lights to illuminate the new parking area cost $15,000. Which;of the following statements is true with respect to these additions?;$45,000 should be;debited to Land Improvements.;$30,000 should be;debited to the Land account.;$45,000 should be;debited to the Land account.;$15,000 should be;debited to Land Improvements.;2.;Equipment was purchased for $75,000. Freight charges amounted to;$3,500 and there was a cost of $10,000 for building a foundation and installing;the equipment. It is estimated that the equipment will have a $15,000 salvage;value at the end of its 5-year useful life. Depreciation expense each year;using the straight-line method will be;$17,700.;$12,300.;$14,700.;$12,000.;3.;On May 1, 2010, Pinkley Company sells office furniture for $90,000;cash. The office furniture originally cost $225,000 when purchased on January;1, 2003. Depreciation is recorded by the straight-line method over 10 years;with a salvage value of $22,500. What gain should be recognized on the sale?;$6,750.;$27,000.;$13,500.;$14,250.;4.;Equipment with an invoice price;of $20,000 was purchased and freight costs were $900. The cost of the equipment;would be $.;5.;Simon Company issued 4,000 shares of its $5 par value common stock;in payment of its attorney's bill of $35,000. The bill was for services;performed in helping the company incorporate. Simon should record this;transaction by debiting;Legal Expense for;$35,000.;6.;Organization Expense;for $35,000.;7.;Legal Expense for;$20,000.;8.;Organization Expense;for $20,000.;6. S. Lawyer performed;legal services for E. Corp. Due to a cash shortage, an agreement was reached;whereby E. Corp. would pay S. Lawyer a legal fee of approximately $10,000 by;issuing 5,000 shares of its common stock (par $1). The stock trades on a daily;basis and the market price of the stock on the day the debt was settled is;$1.80 per share.;Given this information, the journal entry for E. Corp. to record this;transaction is;Legal Expense;9,000;Common Stock;5,000;Paid-in Capital in Excess of Par ? Common;4,000;Legal Expense;9,000;Common Stock;9,000;Legal Expense;10,000;Common Stock;10,000;Legal Expense;9,000;Common Stock;5,000;Paid-in Capital in Excess of Par ? Common;5,000;7. Rancho Corporation;sold 200 shares of treasury stock for $40 per share. The cost for the shares;was $30. The entry to record the sale will include a;debit to Paid-in;Capital in Excess of Par Value for $2,000.;credit to Treasury;Stock for $8,000.;credit to Gain on Sale;of Treasury Stock for $6,000.;credit to Paid-in;Capital from Treasury Stock for $2,000.;8.;Match the items below by entering the appropriate code letter in;the space provided.;Treasury stock;- -;1;2;3;4;5;6;7;8;9;10;Legal capital;- -;1;2;3;4;5;6;7;8;9;10;Par value;- -;1;2;3;4;5;6;7;8;9;10;Preemptive right;- -;1;2;3;4;5;6;7;8;9;10;Retained earnings;- -;1;2;3;4;5;6;7;8;9;10;Cumulative feature;- -;1;2;3;4;5;6;7;8;9;10;Paid-in capital;- -;1;2;3;4;5;6;7;8;9;10;Board of directors;- -;1;2;3;4;5;6;7;8;9;10;Capital stock;- -;1;2;3;4;5;6;7;8;9;10;Limited liability;- -;1;2;3;4;5;6;7;8;9;10;1.;Unit of ownership in a;corporation.;2.;Total amount paid-in;on capital stock.;3.;Enables stockholders;to maintain their same percentage ownership when new shares are issued.;4.;The amount that must;be retained in the business for the protection of creditors.;5.;Creditors only have;corporate assets to satisfy their claims.;6.;Responsible to;stockholders for corporate activity.;7.;Corporation's own;stock that has been reacquired by the corporation but not retired.;8.;Net income retained in;the corporation.;9.;Preferred stockholders;have a right to receive current and unpaid prior-year dividends before common;stockholders receive any dividends.;10.;The amount assigned to;each share of stock in the corporate charter.;9.;The effect of the declaration of a cash dividend by the board of;directors is to;Increase;Decrease;a.;Stockholders' equity;Assets;b.;Assets;Liabilities;c.;Liabilities;Stockholders' equity;d.;Liabilities;Assets;a;b;c;d;10.;Indicate the respective effects of the declaration of a cash;dividend on the following balance sheet sections;Total Assets;Total Liabilities;Total Stockholders;Equity;a.;Increase;Decrease;No change;b.;No change;Increase;Decrease;c.;Decrease;Increase;Decrease;d.;Decrease;No change;Increase;a.;b.;c.;d.;11.;Jennifer Company reports the following amounts for 2010;Net income;$135,000;Average stockholders;equity;500,000;Preferred dividends;35,000;Par value preferred;stock;100,000;The 2010 rate of return;on common stockholders' equity is;27.0%.;25.0%.;22.5%.;33.8%.;12.;Norman Corporation had 250,000 shares of common stock outstanding;during the year. Norman declared and paid cash dividends of $200,000 on the;common stock and $160,000 on the preferred stock. Net income for the year was;$880,000. What is Norman's earnings per share?;$3.52;$2.88;$2.08;$2.72;13. On January 1, 2010;Grant Corporation issued $4,000,000, 10-year, 8% bonds at 102. Interest is;payable semiannually on January 1 and July 1. The journal entry to record this transaction;on January 1, 2010 is;Cash;4,080,000;Bonds Payable;4,080,000;Cash;4,000,000;Bonds Payable;4,000,000;Cash;4,080,000;Bonds Payable;4,000,000;Premium on Bonds Payable;80,000;Premium on Bonds Payable;80,000;Cash;4,000,000;Bonds Payable;4,080,000;14.;Four thousand bonds with a face value of $1,000 each, are sold at;103. The entry to record the issuance is;Cash;4,120,000;Premium on Bonds Payable;120,000;Bonds Payable;4,000,000;Cash;4,120,000;Discount on Bonds Payable;120,000;Bonds Payable;4,000,000;Cash;4,120,000;Bonds Payable;4,120,000;Cash;4,000,000;Premium on Bonds Payable;120,000;Bonds Payable;4,120,000;15.;If bonds with a face value of $150,000 are converted into common;stock when the carrying value of the bonds is $135,000, the entry to record the;conversion will include a debit to;discount on bonds;payable for $15,000.;bonds payable for;$150,000.;bonds payable equal to;the market price of the bonds on the date of conversion.;bonds payable for;$135,000.;16.;Match the items below by entering the appropriate code letter in;the space provided.;Operating lease;- -;1;2;3;4;5;6;7;8;9;10;11;12;Debenture bonds;- -;1;2;3;4;5;6;7;8;9;10;11;12;Premium on bonds;payable;- -;1;2;3;4;5;6;7;8;9;10;11;12;Straight-line method;of amortization;- -;1;2;3;4;5;6;7;8;9;10;11;12;Bonds;- -;1;2;3;4;5;6;7;8;9;10;11;12;Discount on bonds;payable;- -;1;2;3;4;5;6;7;8;9;10;11;12;Registered bonds;- -;1;2;3;4;5;6;7;8;9;10;11;12;Debt to total assets;ratio;- -;1;2;3;4;5;6;7;8;9;10;11;12;Effective-interest;method of amortization;- -;1;2;3;4;5;6;7;8;9;10;11;12;Serial bonds;- -;1;2;3;4;5;6;7;8;9;10;11;12;Bond indenture;- -;1;2;3;4;5;6;7;8;9;10;11;12;Capital lease;- -;1;2;3;4;5;6;7;8;9;10;11;12;1.;Produces a periodic;interest expense that is the same amount each interest period.;2.;A legal document that;sets forth the terms of a bond issue.;3.;Produces a periodic;interest expense equal to a constant percentage of the carrying value of the;bonds.;4.;A form of;interest-bearing notes payable used by corporations.;5.;Occurs when the;contractual interest rate is less than the market interest rate.;6.;Unsecured bonds issued;against the general credit of the borrower.;7.;A contractual;arrangement which is in effect a purchase of property.;8.;Bonds that mature in;installments.;9.;A contractual;arrangement that gives the lessee temporary use of property.;10.;Bonds issued in the;name of the owner.;11.;A solvency measure;that indicates the percentage of assets provided by creditors.;12.;Occurs when the;contractual interest rate is greater than the market interest rate.;17.;Bonds are frequently issued at;amounts greater or less than face value. Describe how the market interest rate;relative to the contractual interest rate, affects the selling price of bonds.;Also explain the rationale for requiring an investor to pay accrued interest;when a bond is purchased between interest payment dates.;18.;On January 1, 2010, Milton Company purchased at face value, a;$1,000, 6% bond that pays interest on January 1 and July 1. Milton Company has;a calendar year end.;The entry for the receipt of interest on July 1, 2010, is;Interest Receivable;60;Interest Revenue;60;Cash;60;Interest Revenue;60;Cash;30;Interest Revenue;30;Interest Receivable;30;Interest Revenue;30;19.;Barr Company acquires 60, 10%, 5 year, $1,000 Community bonds on;January 1, 2010 for $61,250. This includes a brokerage commission of $1,250.;If Barr sells all of its Community bonds for $62,500 and pays $1,500 in;brokerage commissions, what gain or loss is recognized?;Gain of $2,500;Loss of $250;Gain of $1,250;Gain of $250;20.;Decker Corporation purchased 1,000 shares of Kent common stock at;$75 per share plus $3,000 brokerage fees as a short-term investment. The shares;were subsequently sold at $80 per share less $3,400 brokerage fees. The cost of;the securities purchased and gain or loss on the sale were;Cost;Gain or Loss;$78,000;$2,000 gain;$75,000;$5,000 gain;$75,000;$1,400 loss;$78,000;$1,400 loss;21.;Lanier industries owns 45% of McCoy Company. For the current year;McCoy reports net income of $250,000 and declares and pays a $60,000 cash;dividend. Which of the following correctly presents the journal entries to;record Lanier's equity in McCoy's net income and the receipt of dividends from;McCoy?;Dec. 31;Stock Investments;85,500;Revenue from Investment in McCoy;Company;85,500;Dec. 31;Stock Investments;112,500;Revenue from Investment in McCoy;Company;112,500;Dec. 31;Cash;60,000;Stock Investments;60,000;Dec. 31;Revenue from Investment in;McCoy Company;112,500;Stock Investments;112,500;Dec. 31;Stock Investments;27,000;Cash;27,000;Dec. 31;Stock Investments;112,500;Revenue from Investment in McCoy;Company;112,500;Dec. 31;Cash;27,000;Stock Investments;27,000;22.;Joy Elle?s Vegetable Market had the following transactions during;2010;1. Issued $50,000 of par value common stock for cash.;2. Repaid a 6 year note payable in the amount of $22,000.;3. Acquired land by issuing common stock of par value $100,000.;4. Declared and paid a cash dividend of $2,000.;5. Sold a long-term investment (cost $63,000) for cash of $6,000.;6. Acquired an investment in IBM stock for cash of $12,000.;What is the net cash provided by financing activities?;$50,000;$28,000;$18,000;$26,000;23.;In Rooney Company, Treasury Stock increased $30,000 from a cash;purchase, and Retained Earnings increased $80,000 as a result of net income of;$124,000 and cash dividends paid of $44,000. Net cash used by financing;activities is;$30,000.;$44,000.;$74,000.;$110,000.


Paper#43683 | Written in 18-Jul-2015

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