Question 1

When a company retires its outstanding bonds prior to their maturity by purchasing them in the secondary market:

Accepted Answer

A) a loss results when the purchase price is less than the carrying value of the bonds 
B) any unamortized discount or premium is immediately charged to interest expense 
C) the Bonds Payable account is debited for an amount equal to the maturity value of the bonds 
D) a gain results when the carrying value of the bonds is less than the purchase price
Of the bonds 
A) a loss results when the purchase price is less than the carrying value of the bonds 
B) any unamortized discount or premium is immediately charged to interest expense 
C) the Bonds Payable account is debited for an amount equal to the maturity value of the bonds 
D) a gain results when the carrying value of the bonds is less than the purchase price
Of the bonds

Question 2

The amortization of a discount on bonds payable:

Accepted Answer

A) has no effect on the cash payments for interest reported in the operating activities section of the statement of cash flows 
B) decreases the cash payments for interest reported in the operating activities section of the statement of cash flows 
C) increases the cash payments for interest reported in the operating activities section of the statement of cash flows 
D) is reported in the financing activities section of the statement of cash flows 
A) has no effect on the cash payments for interest reported in the operating activities section of the statement of cash flows 
B) decreases the cash payments for interest reported in the operating activities section of the statement of cash flows 
C) increases the cash payments for interest reported in the operating activities section of the statement of cash flows 
D) is reported in the financing activities section of the statement of cash flows

Question 3

The account "Stock Dividends Distributable" would be shown on a company's financial statements as:

Accepted Answer

A) contributed capital 
B) an expense 
C) a liability 
D) revenue 
A) contributed capital 
B) an expense 
C) a liability 
D) revenue

Question 4

The Collyer Corporation authorizes the issuance of 5,000,000 shares of $1par common stock and 1,000,000 shares of 10%,$50 par cumulative preferred stock.Events affecting the stockholders' equity section during the first year of operations (2010)are listed below.
(1.)500,000 shares of common stock were issued for $20 per share.
(2.)25,000 shares of preferred stock were sold at $52 per share.
(3.)A building with a fair market value of $860,000 was acquired for a cash payment of
$200,000 and 30,000 shares of common stock.
(4.)3,000 shares of common stock were repurchased for $15 per share.
(5.)Reissued 1,000 shares of the treasury stock for $20 per share.
(6.)Collyer generated $1,500,000 of income its first year and paid no dividends.
Required:
(A.)Record the transaction described above.
(B.)Prepare the stockholders' equity section of Collyer Corporation.

Accepted Answer

The answer of The Collyer Corporation authorizes the issuance of...

Question 5

The two major elements of stockholders' equity are

Accepted Answer

A) retained earnings and distributable earnings 
B) contributed capital and donated capital 
C) paid-in capital and contributed capital 
D) paid-in capital and retained earnings 
A) retained earnings and distributable earnings 
B) contributed capital and donated capital 
C) paid-in capital and contributed capital 
D) paid-in capital and retained earnings

Question 6

On September 1,2010,Trego Contractors purchased machinery by paying $15,000 down and signing a 4-year,10% installment note for the $60,000 balance.The loan agreement called for 8 semiannual payments beginning March 1,2011.Assume Trego has a 12/31 fiscal year end.
A.Determine the amount of each semiannual payment (round to the nearest dollar).
B.Prepare journal entries for the first two payments, including the accrual at year end.
C.Show how this note would impact the Trego's income statement, balance sheet and cash flow statements for the 12/31/10 fiscal year.

Accepted Answer

The answer of On September 1,2010,Trego Contractors purchased machinery by...

Question 7

The journal entry to record the interest payment of a bond payable issued at a discount would include a:

Accepted Answer

A) debit to Discount on Bonds Payable 
B) debit to Interest Expense 
C) credit to Bonds Payable 
D) debit to Cash 
A) debit to Discount on Bonds Payable 
B) debit to Interest Expense 
C) credit to Bonds Payable 
D) debit to Cash

Question 8

"If a firm issues bonds at more than face value,the difference is a gain which should be recognized in the period of issuance." Is this statement correct? Explain.

Accepted Answer

This statement is false; if bonds are is

Question 9

As a discount on notes payable is amortized:

Accepted Answer

A) the carrying value of the note and interest expense are increased. 
B) both the carrying value of the note is and interest expense are unchanged 
C) the carrying value of the note decreases and interest expense increases 
D) the carrying value of the note increases and the interest expense decreases 
A) the carrying value of the note and interest expense are increased. 
B) both the carrying value of the note is and interest expense are unchanged 
C) the carrying value of the note decreases and interest expense increases 
D) the carrying value of the note increases and the interest expense decreases

Question 10

The cash payment on an installment note would appear on the statement of cash flows in the:

Accepted Answer

A) operating activities section 
B) investing activities section 
C) financing activities section 
D) operating and financing activities sections 
A) operating activities section 
B) investing activities section 
C) financing activities section 
D) operating and financing activities sections

Question 11

The journal entry to record the distribution of a small common stock dividend would include a:

Accepted Answer

A) credit to Paid-in-Capital in Excess of Par--Common Stock 
B) debit to Stock Dividends Distributable 
C) credit to Retained Earnings 
D) debit to Common Stock 
A) credit to Paid-in-Capital in Excess of Par--Common Stock 
B) debit to Stock Dividends Distributable 
C) credit to Retained Earnings 
D) debit to Common Stock

Question 12

Mustang Corporation issued 5,000 shares of $1 par value common stock in exchange for a some equipment with an asking price of $75,000.The stock was sold the day before at a price of $13 per share.The journal entry to record this exchange includes a:

Accepted Answer

A) credit to Paid-in-Capital in Excess of Par--Common Stock for $60,000 
B) credit to Common Stock for $60,000 
C) debit to equipment for $5,000 
D) debit to equipment for $75,000 
A) credit to Paid-in-Capital in Excess of Par--Common Stock for $60,000 
B) credit to Common Stock for $60,000 
C) debit to equipment for $5,000 
D) debit to equipment for $75,000

Question 13

Rollins Corporation has 1,000,000 shares of $4 par value common stock authorized,and 375,000 shares issued and outstanding.The stock had a market value of $22 per share when the board of directors declared a stock dividend.Prepare the journal entries to record the declaration and distribution of the stock dividend assuming (
A)a 10% stock dividend was declared and (b)a 60% stock dividend was declared.

Accepted Answer

@#IMG-DLM& 
*375,000 x 10% = 37,500 x $2

Question 14

Which of the following is true about a stock dividend.

Accepted Answer

A) Assets decrease and owners' equity decreases 
B) Assets increase and Liabilities increase 
C) Contributed Capital increases and Retained earnings decreases 
D) Liabilities decrease and Contributed Capital Increases 
A) Assets decrease and owners' equity decreases 
B) Assets increase and Liabilities increase 
C) Contributed Capital increases and Retained earnings decreases 
D) Liabilities decrease and Contributed Capital Increases

Question 15

Harper Corporation entered into the following transactions:
July 1 Paid $15 per share to purchase 12,000 shares of its $1 par value common stock for
the treasury.
Oct.5 Sold 4,000 shares of the treasury stock purchased on July 1,at a price of $18 per
share.
Nov.8 Sold 5,000 shares of the treasury stock purchased on July 1,at a price of $13 per
share.
Dec.9 Sold the remaining shares of treasury stock for $10 per share.
Prepare journal entries for the above transactions.

Accepted Answer

@#IMG-DLM& 
*$12,000 - $10,000

Question 16

Foster Corporation has 800,000 shares of $3 par value common stock authorized,and 350,000 shares issued and outstanding.The market value of the stock is $22 per share.The journal entry to record the declaration of a 75% stock dividend would include a:

Accepted Answer

A) credit to dividend payable for $1,800,000 
B) credit to Common Stock Dividends Distributable for $787,500 
C) debit to Retained Earnings for $5,775,000 
D) credit to Common Stock Dividends Distributable for $4,987,500 
A) credit to dividend payable for $1,800,000 
B) credit to Common Stock Dividends Distributable for $787,500 
C) debit to Retained Earnings for $5,775,000 
D) credit to Common Stock Dividends Distributable for $4,987,500

Question 17

All of the following would reduce the balance in Retained Earnings except:

Accepted Answer

A) cash dividends 
B) large stock dividends 
C) small stock dividends 
D) the acquisition of treasury stock 
A) cash dividends 
B) large stock dividends 
C) small stock dividends 
D) the acquisition of treasury stock

Question 18

When a corporation issues its own stock in payment for goods or services,the least appropriate value to use in recording the transaction is

Accepted Answer

A) appraised value of the goods or services 
B) market value of the goods or services 
C) market value of the stock 
D) par value of the stock 
A) appraised value of the goods or services 
B) market value of the goods or services 
C) market value of the stock 
D) par value of the stock

Question 19

Olio Corporation has 900,000 shares of $1 par value common stock authorized,and 550,000 shares issued and outstanding.The market value of the stock is $18 per share.The journal entry to record the declaration of a 10% stock dividend would include a:

Accepted Answer

A) credit to dividend payable for $90,000 
B) credit to Common Stock Dividends Distributable for $90,000 
C) debit to Retained Earnings for $990,000 
D) credit to Paid-in-Capital in Excess of Par for $55,000 
A) credit to dividend payable for $90,000 
B) credit to Common Stock Dividends Distributable for $90,000 
C) debit to Retained Earnings for $990,000 
D) credit to Paid-in-Capital in Excess of Par for $55,000

Question 20

The total cash payments made in the year of maturity relative to an interest bearing note would be reported on the statement of cash flows in the:

Accepted Answer

A) operating activities section 
B) investing activities section 
C) financing activities section 
D) both a and c are correct 
A) operating activities section 
B) investing activities section 
C) financing activities section 
D) both a and c are correct

When a company retires its outstanding bonds prior to their maturity by purchasing them in the secondary market:

The amortization of a discount on bonds payable:

The account "Stock Dividends Distributable" would be shown on a company's financial statements as:

The two major elements of stockholders' equity are

The journal entry to record the interest payment of a bond payable issued at a discount would include a:

"If a firm issues bonds at more than face value,the difference is a gain which should be recognized in the period of issuance." Is this statement correct? Explain.

As a discount on notes payable is amortized:

The cash payment on an installment note would appear on the statement of cash flows in the:

The journal entry to record the distribution of a small common stock dividend would include a:

Mustang Corporation issued 5,000 shares of $1 par value common stock in exchange for a some equipment with an asking price of $75,000.The stock was sold the day before at a price of $13 per share.The journal entry to record this exchange includes a:

Which of the following is true about a stock dividend.

Foster Corporation has 800,000 shares of $3 par value common stock authorized,and 350,000 shares issued and outstanding.The market value of the stock is $22 per share.The journal entry to record the declaration of a 75% stock dividend would include a:

All of the following would reduce the balance in Retained Earnings except:

When a corporation issues its own stock in payment for goods or services,the least appropriate value to use in recording the transaction is

Olio Corporation has 900,000 shares of $1 par value common stock authorized,and 550,000 shares issued and outstanding.The market value of the stock is $18 per share.The journal entry to record the declaration of a 10% stock dividend would include a:

The total cash payments made in the year of maturity relative to an interest bearing note would be reported on the statement of cash flows in the:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

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Exam 15: Recording and Evaluating Capital Resource Process Activities: Financing

When a company retires its outstanding bonds prior to their maturity by purchasing them in the secondary market:

The amortization of a discount on bonds payable:

The account "Stock Dividends Distributable" would be shown on a company's financial statements as:

The two major elements of stockholders' equity are

The journal entry to record the interest payment of a bond payable issued at a discount would include a:

"If a firm issues bonds at more than face value,the difference is a gain which should be recognized in the period of issuance." Is this statement correct? Explain.

As a discount on notes payable is amortized:

The cash payment on an installment note would appear on the statement of cash flows in the:

The journal entry to record the distribution of a small common stock dividend would include a:

Mustang Corporation issued 5,000 shares of $1 par value common stock in exchange for a some equipment with an asking price of $75,000.The stock was sold the day before at a price of $13 per share.The journal entry to record this exchange includes a:

Which of the following is true about a stock dividend.

Foster Corporation has 800,000 shares of $3 par value common stock authorized,and 350,000 shares issued and outstanding.The market value of the stock is $22 per share.The journal entry to record the declaration of a 75% stock dividend would include a:

All of the following would reduce the balance in Retained Earnings except:

When a corporation issues its own stock in payment for goods or services,the least appropriate value to use in recording the transaction is

Olio Corporation has 900,000 shares of $1 par value common stock authorized,and 550,000 shares issued and outstanding.The market value of the stock is $18 per share.The journal entry to record the declaration of a 10% stock dividend would include a:

The total cash payments made in the year of maturity relative to an interest bearing note would be reported on the statement of cash flows in the:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters