Accounting Miscellaneous Problems

$16.00

Description

8. Royce Company is considering the purchase of some new equipment that will cost the company $180000. The equipment is estimated to have a 3 year life and no savage value. The equipment is expected to generate the cash inflows described below over the life of the equipment. Royce’s cost of capital is 10%
Cash inflows in year 1 $110000
Cash inflows in year 2 $105000
Cash inflows in year 3 $95000
The NPV of the investment in the equipment is :
9. Companies acquire funds from three sources. Which of the following is not one of the sources?
– Owners Contributions
– Earnings generated by the company
– Debt
– Bankruptcy

10. Sage, Rosemary and Thyme are partners in the Music Company. Their partnership income sharing agreement provides that Sage and Thyme are to receive salary allowances of $29700 and $16800 respectively and that any remaining income or loss is to be divided equally among all partners. If the company’s income was $39000, Thyme’s share would be:
11. Boston Corp. just issued 10000 shares of $par value common stock for $9 per share. The journal entry to record this transaction is:
12. The journal entry to record the declaration of a cash dividend is:
13. Julia Enterprises owns some equipment with an original cost of $120800 and accumulated depreciation of $50800. If the equipment is sold for $78500 in cash, the entry to record this event is:
14. The journal entry to record a payment on an installment note would look like:
15. Robinson Industries purchased a copier system with a cost of $57000 and a salvage of $5000. It was expected that the copier would last for four years. Calculate the depreciation expense at the end of year 1 using straight line method:
16. Comprehensive income includes all of the following except:
17. Which of the following statement is true? Earnings per share
18. Match each of the following accounts to its proper balance sheet classifications. USE OOE for other owner’s equity items that are not contributed capital or retained earnings
1. Goodwill
2. Mortgage Payable
3. Benefit Pension Plans
4. Bonds, Payable due within one year
5. Deferred Charges
6. Investment in Kolinchak, Inc.
7. Accounts Receivables
8. Mining Property
9. Treasury Stock
10. Common stock

OL: Other Liabilities
PPE: Property Plant and Equipment:
CL: Current Liabilities:
INT: Intangibles:
INV: Investments:
CC: Contributed Capitals:
CA: Current Asset:
LTL: Long- Term Liabilities:
OOE: Other Owner’s Equity:
OA: Other Assets:

20. The total of the operating, investing and financing sections of the Statement of Cash Flows is equal to the change in cash from one Balance sheet date to another is true
21. Which of the following is not the primary purpose of the statement of cash flows?
22. A variety of transactions follow: Identify each transaction as on operating, investing, financing event
1. Purchases a building for $120000
2. Sold $50000 of common stock
3. Borrowed $50000 on a long term notes payable
4. Collected $67000 on accounts receivable
5. Paid $20000 on accounts payable
6. Sold $100000 of land and building
23. Wolff enterprises generated $657830 of cash flows from operating activities, used $55670 of cash flows in its investing activities and received $32540 of cash flows from financing activities during the fiscal year. Its weighted average common shares outstanding were $500000 ad it has no preferred stock. What is Wolf’s cash flow per share?
24. If sales for 2012 and 2011 were $924000 and $880000, respectively then the percentage change shown in a horizontal analysis would be:
25. Krishna Imports has total shareholders’ equity of $1298000 on September 30. The company issues only no-par common stock and had 300000 shares outstanding on that date. During the fiscal year September 30, the company earned net income of $186600 and paid dividends totaling $67800. The stock was selling for $15 per share. Compute the Earnings per share

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Accounting miscellaneous problems

$16.00

Description

Perfect systems borrow $94,000 cash on May 15, 2011, by signing a 60-day, 12% notes.

1. On what date this note mature
2. Suppose the face value of note equals $94,000, the principal of the loan. Prepare the journal entries to record (a) issuance of the note and (b) payment of the note at maturity.

10-1
Note round amounts to the nearest whole dollar; assume no reversing entries are used
On January 1, 2011, Kidman Enterprise issues a bond that have a $1,700,000 Par value, mature in 20 years and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par.
1. How much interests will Kidman pay (in cash) to the bondholders every six months?
2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2011; (b) The first interest payment on June 30, 2011; and (c) the second interest payment on December 31, 2011.
3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 98 and (b) 102.

10-16

Ramirez Company is considering a project that will require a $500,000 loan. It presently has total liabilities of $200,000 and total asset of $620,000
1. Compute Ramirez’s (a) present debt-to-equity ratio and (b) the debt-to-equity ratio assuming it borrows $500,000 to fund the project.
2. Evaluate and discuss the level of risk involved if Ramirez borrows the funds to pursue the project.

11-2

Aloha Corporation issues 6,000 shares of its common stock for $144,000 cash on February 20. Prepare journal entries to record this event under each of the following separate situations.
1. The stock has neither par nor stated value.
2. The stock has $20 par value
3. The stock has $8 stated value

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