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Accounting MCQs

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Question;1. Downing company issues $4,000,000 6%, 5 year bonds dated January 1,2014 on January 1, 2014. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue?;2. On January 1, 2014 Huber Co. sold 12% bonds with a face value of $1,000,000. The bonds mature in 5 years and interest is paid semiannually on June 30 and Dec 31. The bonds were sold for $ 1,077,250 to yield 10%. Using the effective interest method of amortization, interest expense for 2014 is;a) $100,000;b) $107,419;C) $107,700;d) $ 120,000;3. At the beginning of 2014, Winston corporation issued 10% bonds with a face value of $ 2,000,000. These bonds mature in 5 years, and the interest is paid semiannually on June 30 and Dec 31. The bonds were sold for $ 1,852,800 to yield 12%. Winston uses a calendar year reporting period. Using the effective interest method amortization, what amount of interest expense should be reported for 2014? Round answer;a) $ 221, 667;b) $ 222, 333;c) $ 223, 006;d) $ 229, 440;4. Manning company issued 10,000 shares of its $ 5 par value common stock having a fair value of $ 25 per share and 15,000 shares of its $15 par value preferred stock having a fair value of $ 20 per share for a lump sum of $ 530,000. How much of the proceeds would be allocated to the common stock?;a) $ 250,000b) $ 240,909c) $ 289,091d) $ 281,563;5. On September 1, 2014. Valdez Company reacquire 20,000 shares of its $10 par value common stock for $ 15 per share. Valdez uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit;a) Treasury stock for $ 200,000b) Common stock for $ 200,000c) Common stock for $ 200,000 and paid in capital excess of par for $ 75,000.d) Treasury stock for $ 300,000;6. Long co issued 100,000 shares of $ 10 par common stock for $ 1,200,000. A year later Long acquire 12,000 shares of its won common stock at $15 per share. Three months later Long Sold 6,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 6,000 treasury shares, Long should credit;a) Treasury stock for $ 114,000b) Treasury stock for $ 60,000 and paid in capital from treasury stock for $ 54,000c) Treasury stock for $ 90,000 and paid in capital from treasury stock for $ 24,000d) Treasury stock for $ 90,000 and paid in capital excess of par for $ 24,ooo;7. Luther inc has 4.000 shares of 6% $ 50 par value, cummulative preferred stock and 100,000 shares of $1 par value common stock outstanding at Dec 31, 2015 and Dec 31, 2014. The board of directors declared and paid a $ 10,000 dividend in 2014. In 2015, $ 48,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2015?;a) $ 34,000b) $ 24,000c) $ 14,000d) $ 12,000;8. A company issues $ 10,000,000, 7.8%, 20 year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and Dec 31, The proceeds from the bonds are $ 9,802,072. What is the interes expense for 2015, using the straight-line amortization?;a) $ 1,026,805b) $ 780,000c) $ 784,596d) $ 789,896;9. At Dec 31, 2014 the following balances existed on the books of Rentro Corporation;Bonds Payable $ 3,500,000Discount on Bonds Payable 280,000Interest Payable 84,000Unamortized bond issue costs 210,000;If the bonds are retired on January 1, 2015, at 102, what will Rentro report as a loss on redemption?;a) $ 350,000b) $ 472,500c) $ 560,000d) $ 644,000

 

Paper#43865 | Written in 18-Jul-2015

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