acct 212 exam 1

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acct 212   exam    1     

award:
3 out of
3.00 points

Exercise 13-2 Accounting for par, stated, and no-par stock issuances
L.O. P1

Aloha
Corporation issues 10,000 shares of its common stock for $134,200 cash on
February 20.

1.

Assume
the stock has neither par nor stated value. Prepare journal entries to record
this event. (Omit the “$” sign in
your response.)

2.

Assume
the stock has a $12 par value. Prepare journal entries to record this
event. (Omit the “$” sign in your
response.)

3.

Assume
the stock has an $6.0 stated value. Prepare journal entries to record this
event. (Omit the “$” sign in your
response.)

Worksheet

Exercise 13-2 Accounting for par, stated, and no-par stock issuances
L.O. P1

2.

award:
3 out of
3.00 points

Exercise 13-4 Stock issuance for noncash assets L.O. P1

Soku
Company issues 18,000 shares of $9 par value common stock in exchange for land
and a building. The land is valued at $238,000 and the building at $365,000.

Prepare
the journal entry to record issuance of the stock in exchange for the land
and building. (Omit the “$” sign in
your response.)

Worksheet

Exercise 13-4 Stock issuance for noncash assets L.O. P1

3.

award:
2.50 out of
3.00 points

Exercise 13-6 Stock dividends and splits L.O. P2

On June 30, 2011, Quinn Corporation’s common stock is priced at $26.0
per share before any stock dividend or split, and the stockholders’ equity
section of its balance sheet appears as follows.

Common stock—$6 par value, 90,000 shares authorized,
36,000 shares issued and outstanding

$

216,000

Paid-in capital in excess of par value, common stock

100,000

Retained earnings

316,000



Total stockholders’ equity

$

632,000






Assume that the company declares and
immediately distributes a 100% stock dividend. This event is recorded by
capitalizing retained earnings equal to the stock’s par value. Answer these
questions about stockholders’ equity as it exists after issuing
the new shares.

1a.

What is the retained earnings balance?(Omit the
“$” sign in your response.)

1b.

What is the amount of total stockholders’ equity?(Omit the
“$” sign in your response.)

1c.

How many shares are outstanding?

Assume that the company implements a
2-for-1 stock split instead of the stock dividend in part 1. Answer these
questions about stockholders’ equity as it exists after issuing
the new shares.

2a.

What is the retained earnings balance?(Omit the
“$” sign in your response.)

2b.

What is the amount of total stockholders’ equity?(Omit the
“$” sign in your response.)

2c.

How many shares are outstanding?

4

award:
3 out of
3.00 points

Exercise 13-8 Dividends on common and noncumulative preferred stock L.O.
C2

Wade’s
outstanding stock consists of 45,000 shares of noncumulative 8.40%
preferred stock with a $10 par value and also 112,500 shares of common stock
with a $1 par value. During its first four years of operation, the
corporation declared and paid the following total cash dividends.

2011

$

30,000

2012

22,000

2013

100,000

2014

197,000


Determine
the amount of dividends paid each year to each of the two classes of
stockholders. (Leave no cells blank – be
certain to enter “0” wherever required. Omit the “$” sign
in your response.)

Compute
the total dividends paid to each class for the four years combined. (Omit the “$” sign in your response.)

Worksheet

Exercise 13-8 Dividends on common and noncumulative preferred stock
L.O. C2

5.

award:
3 out of
3.00 points

Exercise 13-9 Dividends on common and cumulative preferred stock L.O. C2

Wade’s
outstanding stock consists of 48,000 shares of cumulative 7.00%
preferred stock with a $10 par value and also 120,000 shares of common stock
with a $1 par value. During its first four years of operation, the
corporation declared and paid the following total cash dividends.

2011

$

27,000

2012

28,725

2013

66,100

2014

98,600


Determine
the amount of dividends paid each year to each of the two classes of
stockholders. (Leave no cells blank – be
certain to enter “0” wherever required. Omit the “$” sign
in your response.)

Determine
the total dividends paid to each class for the four years combined. (Omit the “$” sign in your response.)

Worksheet

Exercise 13-9 Dividends on common and cumulative preferred stock L.O.
C2

6.

award:
3 out of
3.00 points

Exercise 13-11 Preparing a statement of retained earnings L.O. C3

The
following information is available for Ballard Company for the year ended
December 31, 2011.

a.

Balance
of retained earnings, December 31, 2010, prior to discovery of error,
$860,000.

b.

Cash
dividends declared and paid during 2011, $27,000.

c.

It
neglected to record 2009 depreciation expense of $39,600, which is net of
$5,600 in income taxes.

d.

The
company earned $210,000 in 2011 net income.

Prepare a 2011 statement of retained earnings for
Ballard Company. (Amounts to be deducted
should be indicated with a minus sign. Omit the “$” sign in your
response.)

Worksheet

Exercise 13-11 Preparing a statement of retained earnings L.O. C3

7.

award:
3 out of
3.00 points

Exercise 13-12 Earnings per share L.O. A1

Guess Company reports $1,325,000 of net income for 2011 and declares
$185,500 of cash dividends on its preferred stock for 2011. At the end of
2011, the company had 390,000 weighted-average shares of common stock.

1.

What amount of net income is available to common stockholders for
2011?(Omit the “$” sign in your response.)

2.

What is the company’s basic EPS for 2011?(Round your answer to
2 decimal places. Omit the “$” sign in your response.)

8.

award:
3 out of
3.00 points

Exercise 13-13 Earnings per share L.O. A1

Franklin
Company reports $1,475,000 of net income for 2011 and declares $206,500 of
cash dividends on its preferred stock for 2011. At the end of 2011, the
company had 250,000 weighted-average shares of common stock.

1.

What
amount of net income is available to common stockholders for 2011? (Omit the “$” sign in your response.)

2.

What is
the company’s basic EPS for 2011? (Round your
answer to 2 decimal places. Omit the “$” sign in your response.)

Worksheet

9.

award:
2.40 out of
3.00 points

Exercise 13-14 Dividend yield computation and interpretation L.O. A3

Company

Annual Cash
Dividend per Share

Market Value
per Share

1

$

13.00

$

173.33

2

10.00

107.53

3

11.90

120.20

4

1.90

127.60


Compute
the dividend yield for each of these four separate companies. (Round your answers to 1 decimal place. Omit the
“%” sign in your response.)

Which
company’s stock would probably not be classified as an
income stock?

10.

award:
3 out of
3.00 points

Exercise 13-15 Price-earnings ratio computation and interpretation L.O.
A2

Company

Earnings
per Share

Market Value
per Share

1

$

10.00

$

160.00

2

8.00

81.60

3

6.00

79.20

4

43.00

301.00


Compute
the price-earnings ratio for each of these four separate companies. (Round your answers to 1 decimal place.)

Which
stock might an analyst likely investigate as being potentially undervalued by
the market?

Company 4 .gif” alt=”correct”>

Worksheet

Exercise 13-15 Price-earnings ratio computation and interpretation
L.O. A2

12.

award:
2.70 out of
3.00 points

Exercise 13-17 Accounting for equity under IFRS L.O. C3, P1

Unilever
Group reports the following equity information for the years ended December
31, 2007 and 2008 (euros in millions).

December
31

2008

2007

Share
capital

€

488

€

488

Share
premium

126

167

Other
reserves

(6,459

)

(3,415

)

Retained
profit

15,813

15,175





Shareholders’
equity

€

9,968

€

12,415










1.

Match
each of the three account titles share capital, share premium, and retained
profit with the usual account title applied under U.S. GAAP.

2.

Prepare
Unilever’s journal entry, using its account titles, to record the issuance of
capital stock assuming that its entire par value stock was issued on December
31, 2007, for cash. (Enter answers in
millions of euros and not in whole euros.
Omit
the “€” sign in your response.)

3.

What
were Unilever’s 2008 dividends assuming that only dividends and income
impacted retained profit for 2008 and that its 2008 income totaled
€2,681? (Enter answers in millions of euros
and not in whole euros.
Omit the
“€” sign in your response.)

13.

award:
2.40 out of
3.00 points

Exercise 14-1 Recording bond issuance and interest L.O. P1

On
January 1, 2011, Kidman Enterprises issues bonds that have a $1,600,000 par
value, mature in 20 years, and pay 8% interest semiannually on June 30 and
December 31. The bonds are sold at par.

1.

How
much interest will Kidman pay (in cash) to the bondholders every six
months? (Do not round intermediate
calculations. Omit the “$” sign in your response.)

Semiannual
cash interest payment

$ 3,200 .gif” alt=”incorrect”>

2.

Prepare
journal entries for the following.

(a)

The
issuance of bonds on January 1, 2011. (Omit
the “$” sign in your response.)

(b)

The
first interest payment on June 30, 2011. (Do
not round intermediate calculations.
Omit
the “$” sign in your response.)

(c)

The
second interest payment on December 31, 2011. (Do not round intermediate calculations. Omit the “$” sign in your response.)

General Journal

Debit

Credit

Bond
interest expense
.gif” alt=”correct”>

3,200 .gif” alt=”incorrect”>

Cash .gif” alt=”correct”>

3,200 .gif” alt=”incorrect”>

3.

Prepare
the journal entry for issuance of bonds assuming.

(a)

The
bonds are issued at 98. (Omit the
“$” sign in your response.)

(b)

The
bonds are issued at 102. (Omit the
“$” sign in your response.)

Worksheet

Exercise 14-1 Recording bond issuance and interest L.O. P1

Worksheet

Exercise 13-17 Accounting for equity under IFRS L.O. C3, P1

14.

award:
2 out of
3.00 points

Exercise 14-6 Recording bond issuance and premium amortization L.O. P1,
P3

Jobbs
Company issues 6%, five-year bonds, on December 31, 2010, with a par value of
$98,000 and semiannual interest payments.

Semiannual Period-End

Unamortized Premium

Carrying Value

(0)

12/31/2010

$

8,071

$

106,071

(1)

6/30/2011

7,264

105,264

(2)

12/31/2011

6,457

104,457


Use the
above straight-line bond amortization table and prepare journal entries for
the following.

(a)

The
issuance of bonds on December 31, 2010. (Omit
the “$” sign in your response.)

(b)

The
first interest payment on June 30, 2011. (Omit
the “$” sign in your response.)

(c)

The
second interest payment on December 31, 2011. (Omit the “$” sign in your response.)

Worksheet

Exercise 14-6 Recording bond issuance and premium amortization L.O.
P1, P3

16.

award:
3 out of
3.00 points

Exercise 15-1 Accounting for short-term held to-maturity securities L.O.
P2

Prepare
journal entries to record the following transactions involving the short-term
securities investments of Maxwell Co., all of which occurred during year
2011.

a.

On
February 15, paid $274,000 cash to purchase FTR’s 90-day short-term debt
securities ($274,000 principal), dated February 15, that pay 8% interest
(categorized as held-to-maturity securities). (Omit the “$” sign in your response.)

b.

On May
16, received a check from FTR in payment of the principal and 90 days’
interest on the debt securities purchased in transaction a. (Do not round your intermediate calculations. Use 360 days
a year. Omit the “$” sign in your response.)

Worksheet

Exercise 15-1 Accounting for short-term held to-maturity securities
L.O. P2

17.

award:
3 out of
3.00 points

Exercise 15-2 Accounting for short-term trading securities L.O. P1

Prepare
journal entries to record the following transactions involving the short-term
securities investments of Smart Co., all of which occurred during year 2011.

a.

On
March 22, purchased 720 shares of FIX Company stock at $19 per share plus a
$230 brokerage fee. These shares are categorized as trading securities. (Omit the “$” sign in your response.)

b.

On
September 1, received a $4 per share cash dividend on the FIX Company stock
purchased in transaction a. (Omit
the “$” sign in your response.)

c.

On
October 8, sold 360 shares of FIX Co. stock for $29 per share, less a $220
brokerage fee. (Do not round your
intermediate calculations. Omit the “$” sign in your response.)

Worksheet

Exercise 15-2 Accounting for short-term trading securities L.O. P1

19.

award:
3 out of
3.00 points

Exercise 15-6 Accounting for trading securities L.O. P1

Forex
Co. purchases various investments in trading securities at a cost of $75,000
on December 27, 2011. (This is its first and only purchase of such
securities.) At December 31, 2011, these securities had a fair value of
$84,000.

1.

Prepare
the December 31, 2011, year-end adjusting entry for the trading securities’
portfolio. (Omit the “$” sign in
your response.)

2.

Prepare
the January 3, 2012, entry when Forex sells a portion of its trading
securities (that had originally cost $37,500) for $39,750. (Omit the “$” sign in your response.)

Worksheet

Exercise 15-6 Accounting for trading securities L.O. P1

20.

award:
3 out of
3.00 points

Exercise 15-7 Adjusting available-for-sale securities to fair value L.O.
P3

On
December 31, 2011, Rollo Company held the following short-term investments in
its portfolio of available-for-sale securities. Rollo had no short-term
investments in its prior accounting periods.

Cost

Fair Value

Vicks
Corporation bonds payable

$

66,500

$

61,100

Pace
Corporation notes payable

54,000

46,100

Lake
Lugano Company common stock

86,500

83,900


Prepare
the December 31, 2011, adjusting entry to report these investments at fair
value. (Omit the “$” sign in your
response.)

Worksheet

Exercise 15-7 Adjusting available-for-sale securities to fair value
L.O. P3

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