Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Accounting
Q:
Assume Garrison Guitar Company declared a $0.28 per share cash dividend and that the company has 25,000 shares authorized, 19,000 shares issued, and 12,000 shares of common stock outstanding. The general journal entry to record the dividend declaration is:
A. Retained Earnings
3,360 Common Dividends Payable 3,360 B. Common Dividends Payable
5,320 Cash 5,320 C. Retained Earnings
5,320 Common Dividends Payable 5,320 D. Common Dividends Payable
3,360 Cash 3,360 E. Retained Earnings
7,000 Common Dividends Payable 7,000
Q:
A company declared a $0.50 per share cash dividend. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:
A. Retained Earnings
4,000 Common Dividends Payable 4,000 B. Common Dividends Payable
4,000 Cash 4,000 C. Retained Earnings
4,500 Common Dividends Payable 4,500 D. Common Dividends Payable
4,500 Cash 4,500 E. Retained Earnings
5,000 Common Dividends Payable 5,000
Q:
A company's board of directors votes to declare a cash dividend of $0.75 per share. The company has 15,000 shares authorized, 10,000 issued, and 9,500 shares outstanding. The total amount of the cash dividend is:
A. $375
B. $4,125
C. $7,125
D. $7,500
E. $11,250
Q:
A liquidating dividend is:
A. Only declared when a corporation closes down.
B. A return of a part of the original investment back to the stockholders.
C. Not allowed under federal law.
D. Only paid in assets other than cash.
E. Only paid in shares of stock.
Q:
The date the board of directors votes to pay a dividend is called the:
A. Date of stockholders' meeting
B. Date of declaration
C. Date of record
D. Date of payment
E. Liquidating date
Q:
A premium on common stock:
A. Is the amount paid in excess of par by purchasers of newly issued stock.
B. Is the difference between par value and issue price when the amount paid is below par
C. Represents profit from issuing stock.
D. Represents capital gain on sale of stock.
E. Is prohibited in most states.
Q:
A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $60,000. The entry to record this exchange is:
A. Land
60,000 Common Stock 50,000 Paid-In Capital in Excess of Par Value, Common Stock 10,000 B. Land
60,000 Common Stock 60,000 C. Land
50,000 Common Stock 50,000 D. Common Stock
50,000 Paid-In Capital in Excess of Par Value, .Common Stock
10,000 Land 60,000 E. Common Stock
60,000 Land 60,000
Q:
A company issued 60 shares of $100 par value stock for $7,000 cash. The total amount of paid-in capital in excess of par is:
A. $100
B. $600
C. $1,000
D. $6,000
E. $7,000
Q:
A company issued 60 shares of $100 par value stock for $7,000 cash. The total amount of contributed capital is:
A. $100
B. $600
C. $1,000
D. $6,000
E. $7,000
Q:
A corporation issued 300 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:
A. A $1,800 credit to Common Stock.
B. A $1,500 debit to Organization Expenses.
C. A $300 credit to Contributed Capital in Excess of Par Value, Common Stock.
D. A $1,800 debit to Legal Expenses.
E. A $1,800 credit to Cash.
Q:
A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include:
A. A debit to Common Stock for $60,000.
B. A debit to Land for $60,000.
C. A credit to Land for $60,000.
D. A credit to Contributed Capital in Excess of Par Value, Common Stock for $24,000.
E. A credit to Common Stock for $84,000.
Q:
A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include:
A. A debit to Contributed Capital in Excess of Par Value, Common Stock, for $42,000.
B. A debit to Cash for $140,000.
C. A credit to Common Stock for $182,000.
D. A credit to Common Stock for $140,000.
E. A credit to Contributed Capital in Excess of Par Value, Common Stock, for $182,000.
Q:
A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:
A. A debit to Organization Expenses for $3,000.
B. A debit to Organization Expenses for $5,000.
C. A credit to Common Stock for $5,000.
D. A credit to Contributed Capital in Excess of Par Value, Common Stock, for $5,000.
E. A debit to Contributed Capital in Excess of Par Value, Common Stock, for $2,000.
Q:
The Discount on Common Stock account reflects:
A. The difference between the par value of stock and its issue price when the issue price is below par value.
B. One share's portion of the issued corporation's net assets recorded in its accounts.
C. The difference between the par value of the stock and the amount contributed by stockholders when the amount contributed is more than par value.
D. An amount of assets defined by state law that stockholders must invest and leave invested in a corporation.
E. The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock.
Q:
A company has 500 shares of $50 par value preferred stock outstanding and the call price of its preferred stock is $60 per share. It also has 20,000 shares of common stock outstanding and the total value of its stockholders' equity is $680,000. The company's book value per common share equals:
A. $31.71
B. $32.50
C. $32.75
D. $33.17
E. $60.00
Q:
A company has 1,000 shares of $100 par preferred stock. It also has 25,000 shares of common stock outstanding and its total stockholders' equity equals $500,000. The book value per common share is:
A. $15.38
B. $16.00
C. $19.23
D. $20.00
E. $100.00
Q:
A company has 40,000 shares of common stock outstanding. The stockholders' equity applicable to common shares is $470,000 and the par value per common share is $10. The book value per share is:
A. $0.09
B. $1.75
C. $10.00
D. $11.75
E. $47.50
Q:
Book value per share:
A. Reflects the value per share if a company is liquidated at balance sheet amounts.
B. Is assets divided by equity.
C. Is assets divided by the number of common share outstanding.
D. Measures the worth of assets.
E. Is equal to par value per share.
Q:
A company paid $0.75 in cash dividends per share. It has earnings per share of $3.50 and a market price per share of $37.50. Its dividend yield equals:
A. 11.7%
B. 2.0%
C. 10.9%
D. 21.4%
E. 46.7%
Q:
A company paid $0.48 in cash dividends per share. It has earnings per share of $4.20 and a market price per share of $30.00. Its dividend yield equals:
A. 1.60%
B. 6.25%
C. 8.75%
D. 11.40%
E. 14.00%
Q:
Stocks that pay relatively large cash dividends on a regular basis are referred to as:
A. Small capital stocks
B. Mid capital stocks
C. Growth stocks
D. Large capital stocks
E. Income stocks
Q:
Dividend yield is the percent of cash dividends paid to common shareholders relative to the:
A. Common stock's market value.
B. Earnings per share.
C. Investors' purchase price of the stock.
D. Amount of retained earnings.
E. Amount of cash.
Q:
A company has net income of $3,000,000. It has 600,000 weighted-average common shares outstanding and a price-earnings ratio of 17. What is the market value per share of this company's stock?
A. $5
B. $85
C. $176,470.58
D. $84.90
E. $17
Q:
A company has net income of $2,800,000. It also has 400,000 weighted-average common shares outstanding and a price-earnings ratio of 20. What is the market value per share of this company's stock?
A. $2.85
B. $140
C. $20,000
D. $.35
E. $2,857.14
Q:
A company has net income of $850,000. It also has 125,000 weighted-average common shares outstanding and a market value per share of $115. The company's price-earnings ratio is equal to:
A. 16.9
B. 14.7
C. 92.0
D. 13.5
E. 8.0
Q:
A company has a market value per share of $73.00. Its net income is $1,750,000 and the weighted-average number of shares outstanding is 350,000. The company's price-earnings ratio is equal to:
A. 20.9
B. 4.2
C. 14.6
D. 20.0
E. 6.8
Q:
The price-earnings ratio is calculated by dividing:
A. Market value per share by earnings per share.
B. Earnings per share by market value per share.
C. Dividends per share by earnings per share.
D. Dividends per share by market value per share.
E. Market value per share by dividends per share.
Q:
A company had net income of $250,000. On January 1, there were 12,000 shares of common stock outstanding. On May 1, the company issued an additional 9,000 shares of common stock. The company declared a $7,900 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company had earnings per share of:
A. $13.45
B. $13.89
C. $11.53
D. $26.90
E. Amount cannot be determined as problem does not state if there are any dividends in arrears.
Q:
Shamrock Company had net income of $30,000. On January 1, there were 8,000 shares of common stock outstanding. On April 1, the company issued an additional 2,000 shares of common stock. The company declared a $2,700 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company has an earnings per share of:
A. $2.87
B. $2.73
C. $3.41
D. $3.16
E. $3.75
Q:
Shamrock Company had net income of $30,000. On January 1, there were 8,000 shares of common stock outstanding. On April 1, the company issued an additional 2,000 shares of common stock. There were no other stock transactions. The company has earnings per share of:
A. $3.75
B. $3.00
C. $3.33
D. $15.00
E. $3.16
Q:
A company can reserve the right to retire bonds before their maturity date by issuing _______________ bonds.
Q:
The issue price of bonds is found by computing the present value of the bond's cash payments, discounted at the _______________ rate of interest at the time of issuance.
Q:
The _______________ amortization method allocates bond interest expense over the life of the bonds in a way that yields a constant rate of interest.
Q:
The _________________________ method of amortizing a bond discount allocates an equal portion of the total bond interest expense to each interest period.
Q:
The process of systematically reducing a bond discount to zero over the life of the bond is called ______________________________.
Q:
When the bond contract rate of interest is above the market rate of interest for that bond, the bond sells at a _____________.
Q:
The rate of interest that borrowers are willing to pay and lenders are willing to accept for a particular bond and its risk level is the ____________________ of interest.
Q:
The interest rate specified in the bond indenture that is paid by the issuer of the bond is called the ___________________ of interest.
Q:
A bond with a par value of less than $1,000 is called a ______________ bond.
Q:
The legal document identifying the rights and obligations of both the bondholders and the issuer is called the ____________________________________.
Q:
___________________ bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity.
Q:
_____________________ bonds can be exchanged for a fixed number of shares of the issuing corporation's common stock.
Q:
Unsecured bonds are also called ____________________ and are backed by the issuer's general credit standing.
Q:
____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds at maturity.
Q:
_______________ bonds are bonds that mature at more than one date, often in a series and thus are usually repaid over a number of periods.
Q:
______________ bonds are bonds that are scheduled for maturity on one specified date.
Q:
_______________ bonds have specific assets of the issuing company pledged as collateral.
Q:
Return on equity _______________ when the expected rate of return from the acquired assets is greater than the rate of interest on the bonds used to finance the asset acquisition.
Q:
____________________ leases are long-term or noncancelable leases by which the lessor transfers substantially all risks and rewards of ownership to the lessee.
Q:
_________________________ leases are short-term or cancelable leases in which the lessor retains the risks and rewards of ownership.
Q:
A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments) to employees after they retire.
Q:
The ____________ concept is the idea that cash paid (or received) in the future has less value now than the same amount of cash paid (or received) today.
Q:
An _______________ is a series of equal payments at equal time intervals.
Q:
The carrying value of a bond payable at any point in time equals par value minus any unamortized _______________ or plus any unamortized _______________.
Q:
Most mortgage contracts grant the lender the right to _______________ on the property if the borrower fails to pay in accordance with the terms of the debt agreement.
Q:
An ________________________________ is an obligation requiring a series of payments to the lender.
Q:
A company issues bonds with a par value of $900,000 on their stated issue date. The bonds mature in 10 years and pays 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. What is the selling price of the bond?
Q:
On January 1, 2013, Silver issues $300,000 of 12%, 20-year bonds at a price of 96. What is the total bond interest expense that will be recognized over the life of the bond?
Q:
On January 1, 2013, Timley issues $2,200,000 of 6%, 12-year bonds at a price of 105 that pay interest semiannually. The straight-line method is used to amortize any bond premium or discount. What is the journal entry to record the first interest payment?
Q:
On January 1, 2013, Timley issues $2,200,000 of 6%, 12-year bonds at a price of 105 that pay interest semiannually. The straight-line method is used to amortize any bond premium or discount. What is the journal entry to record the issuance of the bonds on January 1, 2013?
Q:
A company purchased two new trucks for a total of $250,000 on January 1, 2013. The company paid $40,000 cash and gave a $210,000, three-year, 8% note for the remaining balance. The note is to be paid in three annual end-of-year payments beginning December 31, 2013. Assume the annual installment payments are to consist of equal amounts of principal plus accrued interest. Prepare a note amortization table using the format below. Period Ending Date
Beginning Balance
Debit Interest Expense
Debit Notes Payable
Credit Cash
Ending Balance 12/31/13 12/31/14 12/31/15
Q:
A company previously issued $2,000,000, 10% bonds, receiving a $120,000 premium. On the current year's interest date, after the bond interest was paid and after 40% of the total premium had been amortized, the company purchased the entire bond issue on the open market at 98 and retired it. Prepare the journal entry to record the retirement of these bonds.
Q:
A company has 10%, 20-year bonds outstanding with a par value of $500,000. The company calls the bonds at 96 when the unamortized discount is $24,500. Calculate the gain or loss on the retirement of these bonds.
Q:
A company calls $150,000 par value of bonds with a carrying value of $147,950. The company calls the bonds at $151,000. Prepare the journal entry to record the retirement of the bonds.
Q:
A company has $200,000 par value, 10% bonds outstanding. Prepare the company's journal entry to retire the bonds at the date of maturity.
Q:
A company issued 10%, five-year bonds with a par value of $2,000,000, on January 1, 2013. Interest is to be paid semiannually each June 30 and December 31. The bonds were sold at $2,162,290 to yield the buyers an 8% annual return. The company uses the effective interest method of amortization.
(1) Prepare an amortization table for the first two semiannual payment periods using the format shown below. Semiannual Interest Period
Cash Interest Paid
Bond Interest Expense
Premium Amortization
Unamortized Premium
Carrying Value (2) Prepare the general journal entry to record the first semiannual interest payment.
Q:
On January 1, 2013, a company issued 10%, 10-year bonds payable with a par value of $720,000. The bonds pay interest each July 1 and January 1. The bonds were sold for $817,860 cash, which provides the holders an annual yield of 8%. Prepare the issuer's general journal entry to record the first semiannual interest payment assuming the effective interest method is used.
Q:
Walker Corporation issued 14%, five-year bonds with a par value of $5,000,000 on January 1, 2013. Interest is to be paid semiannually on each June 30 and December 31. The bonds were issued at $5,368,035 cash when the market rate for this bond was 12%.
(a) Prepare the general journal entry to record the issuance of the bonds on January 1, 2013.
(b) Show how the bonds would be reported on Walker's balance sheet at January 1, 2013.
(c) Assume that Walker uses the effective interest method for amortizing any discount or premium on bonds. Prepare the general journal entry to record the first semiannual interest payment on June 30, 2013.
(d) Assume instead that Walker uses the straight-line method for amortizing any discount or premium on bonds. Prepare the general journal entry to record the first semiannual interest payment on June 30, 2013.
Q:
On August 1, 2013, a company issues bonds with a par value of $600,000. The bonds mature in 10 years and pay 6% annual interest, payable each February 1 and August 1. The bonds sold at $592,000. The company uses the straight-line method of amortizing bond discounts and premiums. The company's year-end is December 31. Prepare the general journal entry to record the interest accrued at December 31, 2013.
Q:
On August 1, 2013, a company issues bonds with a par value of $600,000. The bonds mature in 10 years and pay 6% annual interest, payable each February 1 and August 1. The bonds sold at $632,000. The company uses the straight-line method of amortizing bond premiums and discounts. The company's year-end is December 31. Prepare the general journal entry to record the interest accrued at December 31, 2013.
Q:
On January 1, 2013, a company issued 10%, 10-year bonds payable with a par value of $720,000. The bonds pay interest on July 1 and January 1. The bonds were issued for $817,860 cash, which provided the holders an annual yield of 8%. Prepare the general journal entry to record the first semiannual interest payment, assuming the company uses the straight-line method of amortization.
Q:
On January 1, 2013, a company issued 10-year, 10% bonds payable with a par value of $500,000 and received $442,647 in cash proceeds. The market rate of interest at the date of issuance was 12%. The bonds pay interest semiannually on July 1 and January 1. The issuer uses the straight-line method for amortization. Prepare the issuer's general journal entry to record the first semiannual interest payment on July 1, 2013.
Q:
Martin Corporation issued $3,000,000 of 8%, 20-year bonds payable at par value on January 1, 2013. Interest is payable each June 30 and December 31.
(a) Prepare the general journal entry to record the issuance of the bonds on January 1, 2013.
(b) Prepare the general journal entry to record the first interest payment on June 30, 2013.
Q:
On June 1, a company issued $200,000 of 12% bonds at their par value plus accrued interest. The interest on these bonds is payable semiannually on January 1 and July 1. Prepare the issuer's journal entry to record the bond issuance of June 1.
Q:
On October 1 of the current year a corporation sold, at par plus accrued interest, $1,000,000 of its 12% bonds, which were dated July 1 of this year. What amount of bond interest expense should the company report on its current year income statement?
Q:
On January 1, 2013, Leyden Corporation leased a truck, agreeing to pay $15,252 every December 31 for the entire six years of the lease. The present value of the lease payments, at 6% interest is $75,000. The lease is considered a capital lease.
(a) Prepare the general journal entry to record the acquisition of the truck based on a capital lease.
(b) Prepare the general journal entry to record the first lease payment on December 31, 2010.
(c) Record straight-line depreciation on the truck on 12/31/13, assuming a 6-year life and no salvage value.
Q:
On January 1, 2013, the Plimpton Corporation leased some equipment for two years, paying $15,000 per year each December 31. The lease is considered to be an operating lease. Prepare the general journal entry to record the first lease payment on December 31, 2013.
Q:
On March 1, a company issues bonds with a par value of $300,000. The bonds mature in 10 years and pay 6% annual interest, payable each June 30 and December 31. The bonds sell at par value plus interest accrued since January 1. Prepare the general journal entry to record the issuance of the bonds on March 1.
Q:
Assume that a company has a loan agreement that provides it with cash today and that the company must pay $25,000 one year from today, $15,000 two years from today, and $5,000 three years from today. The company agrees to pay 10% interest. The following factors are from the present value of $1 table: Periods Interest rate 10% 1 0.9091 2 0.8264 3 0.7513 What is the amount of cash the company receives today?
Q:
A company enters into an agreement to make five annual year-end payments of $3,000 each, which will begin one year from now. The annual interest rate is 6%. The present value of an annuity factor for five periods, 6%, is 4.2124. What is the present value of these five payments?