Q&A Hero

Q: information that is not generally reported for each class of stock on the balance sheet is a.the market value b.the par value c.shares authorized d.shares issued

Q: On August 3, Sonar Sales decides to establish a $275 petty cash fund to relieve the burden on Accounting.​a. Journalize the establishment of the fund.b. On August 11, the petty cash fund has receipts for mail and postage of $124.75, contributions and donations of $53.25, meals and entertainment of $63.85, and $32.75 in cash. Journalize the replenishment of the fund.c. On August 12, Sonar Sales decides to increase petty cash to $400. Journalize this transaction.

Q: all of the following are normally found in a corporations stockholders equity section except a.dividends in arrears b.common stock c.paid-in capital d.retained earnings

Q: two classifications appearing in the paid-in capital section of the balance sheet are a.preferred stock and common stock b.paid-in capital and retained earnings c.capital stock and additional paid-in capital d.capital stock and treasury stock

Q: You began your new job as the accountant at Bolivar Industries during the month of December. During your first month, you found several warning signs related to control issues, as follows:(1) While looking through the invoices, you found Invoices 213–242, 245–271, and 275–290. It appears that invoices 243, 244, 272, 273, and 274 are missing.(2) During the month, Clerk #3 issued $250 in refunds as compared to Clerks #1, #2, and #4 who issued less than $50 each.(3) The daily cash receipts and bank deposits reconcile, except on Tuesdays during the month.(4) Business is generally brisk during the holiday season, but two weeks before Christmas there was a sudden increase in slow payments.​a. What kinds of issues could be associated with these warning signs?b. List three controls that could be put in place regarding the cash refunds mentioned in (a) (2).

Q: paid-in capital in excess of stated value would appear on a balance sheet under the category a.capital stock b.retained earnings c.additional paid-in capital d.contra to stockholders equity

Q: The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Journalize the transactions for each of the two days of cash receipts from sales.a. Actual cash in cash register, $5,412.36; cash receipts per cash register tally, $5,413.07.b. Actual cash in cash register, $3,712.95; cash receipts per cash register tally, $3,712.16.

Q: in the stockholders equity section of the balance sheet a.common stock dividends distributable will be classified as part of additional paid-in capital b.common stock dividends distributable will appear in its own subsection of the stockholders equity c.additional paid-in capital appears under the sub-section paid-in capital d.dividends in arrears will appear as a restriction of retained earnings

Q: The bank statement for Farmer Co. indicates a balance of $7,735 on June 30. After the journals for June were posted, the cash account had a balance of $4,098. Prepare a bank reconciliation on the basis of the following reconciling items:(1) Cash sales of $742 were erroneously recorded in the cash receipts journal as $724.(2) Deposits in transit not recorded by bank, $425.(3) Bank debit memo for service charges, $35.(4) Bank credit memo for note collected by bank, $2,475 including $75 interest.(5) Bank debit memo for $256 NSF (not sufficient funds) check from Janice Smith, a customer.(6) Checks outstanding, $1,860.

Q: cerner corporation began business by issuing 150,000 shares of $5 par value common stock for $24 per share. during its first year, the corporation sustained a net loss of $30,000. the year-end balance sheet would show a.common stock of $750,000 b.common stock of $3,600,000 c.total paid-in capital of $3,570,000 d.total paid-in capital of $2,850,000

Q: The following information is from Madison Corporation’s accounting records for May. Check No. 3269 was returned as a double payment and voided. Checks that have not cleared the bank include No. 3252, No. 3260, and series No. 3275–3278. Check No.AmountCheck No.Amount3247$ 32.643263$ 24.873248400.00326445.003249309.22326533.783250256.003266756.7732513,212.17326784.34325256.893268789.00325398.02326948.90325447.55327034.4132551,124.773271872.003256250.00327222.00325768.003273562.383258215.563274512.00325938.553275603.50326092.65327667.00326144.613277301.61326272.96327847.88​In addition to the list of checks, Madison had Check No. 2264 for $32.98 and Check No. 2655 for $45.99 outstanding previously that have not cleared.a. Create an outstanding checks list for Madison at the end of May.b. What is the total amount of checks that cleared the bank (written in May)?

Q: Racer Corporation’s December 31, 2012 balance sheet showed the following:Racer’s total stockholders’ equity wasa.$55,140,000b.$46,860,000c.$54,510,000d.$53,880,000

Q: Racer Corporation’s December 31, 2012 balance sheet showed the following:Racer declared and paid a $75,000 cash dividend on December 15, 2012. If the company’s dividends in arrears prior to that date were $18,000, Racer’s common stockholders receiveda.$57,000b.$27,000c.$33,000d.no dividend

Q: Accompanying a bank statement for Marsh Land Properties is a credit memo for payment on a $15,000 one-year note receivable and $900 of interest collected by the bank. Marsh Land Properties had been notified by the bank at the time of collection, but had made no entries. Journalize the entry that should be made by Marsh Land to bring the accounting records up to date.

Q: Racer Corporation’s December 31, 2012 balance sheet showed the following:Racer’s total paid-in capital wasa.$46,860,000b.$47,490,000c.$46,230,000d.$27,060,000

Q: Match each of the following items with how it would appear on the bank statement (a–d). Each letter may be used more than once. Some letters may not be used.a. With a debit memo entry that increases the account balanceb. With a debit memo entry that decreases the account balancec. With a credit memo entry that increases the account balanced. With a credit memo entry that decreases the account balanceCorrection of the bank’s error recording a $300 check as $30

Q: danley corporation began business by issuing 100,000 shares of $5 par value common stock for $24 per share. during its first year, the corporation sustained a net loss of $20,000. the year-end balance sheet would show a.common stock of $500,000 b.common stock of $2,400,000 c.total paid-in capital of $2,380,000 d.total paid-in capital of $1,900,000

Q: Nance Corporation’s December 31, 2012 balance sheet showed the following:Nance’s total stockholders’ equity wasa.$36,760,000b.$31,240,000c.$36,340,000d.$35,920,000

Q: Nance Corporation’s December 31, 2012 balance sheet showed the following:Nance declared and paid a $50,000 cash dividend on December 15, 2012. If the company’s dividends in arrears prior to that date were $12,000, Triad’s common stockholders receiveda.$38,000b.$18,000c.$22,000d.no dividend

Q: Nance Corporation’s December 31, 2012 balance sheet showed the following:Nance’s total paid-in capital wasa.$31,240,000b.$31,660,000c.$30,820,000d.$18,040,000

Q: what is the total stockholders equity based on the following account balances?Common Stock $1,100,000Paid-In Capital in Excess of Par 100,000Retained Earnings 360,000Treasury Stock 60,000a.$1,200,000b.$1,620,000c.$1,560,000d.$1,500,000

Q: what is the total stockholders equity based on the following account balances?Common Stock $400,000Paid-In Capital in Excess of Par 50,000Retained Earnings 175,000Treasury Stock 25,000a.$650,000b.$625,000c.$600,000d.$450,000

Q: what is the total stockholders equity based on the following account balances?Common Stock $1,500,000Paid-In Capital in Excess of Par 120,000Retained Earnings 570,000Treasury Stock 60,000a.$1,890,000b.$2,130,000c.$2,250,000d.$1,380,000

Q: all of the following statements regarding retained earnings are true except a.retained earnings represents a claim on cash b.a debit balance in retained earnings indicates a deficit c.some companies may restrict availability of retained earnings for dividends d.retained earnings is net income that a company retains in a business

Q: Match each of the following reconciling items to its proper placement (a–d) on the bank statement. Each letter may be used more than once. Some letters may not be used.a. Bank statement adjustmentb. Company’s records adjustmentc. Eitherd. NeitherDeposit in transit

Q: hutchinson company had retained earnings of $10,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. cash of $2,000 had been set aside for the plant expansion. how much of retained earnings is available for dividends? a.$7,000 b.$8,000 c.$10,000 d.$5,000

Q: the following selected amounts are available for thomas company.Retained earnings (beginning) $2,000Net loss 200Cash dividends declared 200Stock dividends declared 200what is its ending retained earnings balance?a.$1,700b.$1,800c.$1,400d.$1,600

Q: placing a restriction on retained earnings will a.assure that a company has sufficient cash for a specific purpose b.increase total stockholders equity c.communicate to readers a portion of retained earnings is unavailable for dividends d.decrease total stockholders equity

Q: when retained earnings are restricted, total retained earnings a.are unaffected b.increase c.decrease d.may increase or decrease

Q: oxford inc. was authorized to issue 50,000 £10 par value ordinary shares. as of december 31, 2011, the company had issued 22,000 shares at an average price of £22 per share. during 2011, the company felt that the shares were undervalued so it purchased 5,000 treasury shares at £18 per share. when the share price rebounded later in the year, the company sold 2,000 of the treasury for £25. retained earnings was £829,000 at december 31, 2011. total equity at december 31, 2011 is a.£1,223,000 b.£1,259,000 c.£1,273,000 d.£1,381,000

Q: oxford inc. was authorized to issue 50,000 £10 par value ordinary shares. as of december 31, 2011, the company had issued 22,000 shares at an average price of £22 per share. during 2011, the company felt that the shares were undervalued so it purchased 5,000 treasury shares at £18 per share. when the share price rebounded later in the year, the company sold 2,000 of the treasury for £25. retained earnings was £829,000 at december 31, 2011. the amount of share premium reported on the december 31, 2011 statement of financial position is a.£140,000 b.£264,000 c.£278,000 d.£484,000

Q: On January 1, Swanson Corporation had 60,000 ordinary shares with a €10 par value outstanding. On March 17, the company declared a 15% share dividend to shareholders of record on March 20. Market value of the shares was €13 on March 17. The shares were distributed on March 30. The entry to record the transaction of March 30 would include aa. credit to Cash for €90,000.b. debit to Ordinary Share Dividends Distributable for €90,000.c. credit to Share Premium–Ordinary for €27,000.d. debit to Cash Dividends for €27,000

Q: Match each of the following reconciling items to its proper treatment (a–d) on the bank reconciliation. Each letter may be used more than once.a. Added to the cash balance according to the company’s recordsb. Subtracted from the cash balance according to the company’s recordsc. Added to the cash balance according to the bank statementd. Subtracted from the cash balance according to the bank statementCheck issued for $420 incorrectly recorded by the company as $240

Q: On January 1, Swanson Corporation had 60,000 ordinary shares with a €10 par value outstanding. On March 17, the company declared a 15% share dividend to shareholders of record on March 20. Market value of the shares was €13 on March 17. The entry to record the transaction of March 17 would include aa. credit to Cash Dividends for €27,000.b. credit to Cash for €117,000.c. credit to Ordinary Share Dividends Distributable for €90,000.d. debit to Ordinary Share Dividends Distributable for €90,000.

Q: Anders, Inc has 5,000 shares of 5%, €100 par value, cumulative preference shares and 20,000 ordinary shares with a $1 par value outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a €45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the ordinary shareholders in 2011?a. €15,000b. €25,000c. €45,000d. €0

Q: manner, inc. has 5,000 shares of 5%, 100 par value, noncumulative preference shares and 20,000 ordinary shares with a 1 par value outstanding at december 31, 2011. there were no dividends declared in 2010. the board of directors declares and pays a 45,000 dividend in 2011. what is the amount of dividends received by the ordinary shareholders in 2011? a.0 b.25,000 c.45,000 d.20,000

Q: looper, inc. has 25,000 shares of 6%, 100 par value, noncumulative preference shares and 50,000 ordinary shares with a 1 par value outstanding at december 31, 2011. there were no dividends declared in 2010. the board of directors declares and pays a 250,000 dividend in 2011. what is the amount of dividends received by the common shareholders in 2011? a.0 b.150,000 c.250,000 d.100,000

Q: Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 8%, €50 par value preference shares which it sold for €54 per share at the beginning of 2009. The company has never paid preference dividends. As of December 31, 2011, dividends in arrears area. €88,000.b. €132,000.c. €162,000.d. €142,560.

Q: la vida corporation issued 18,000 shares of no-par value ordinary shares for 29.50 per share. which of the following statements is true? a.share premiumordinary account will increase by 207,000 b.the cash account will increase by 18,000 c.retained earnings account will increase by 513,000 d.share capitalordinary account will increase by 531,000

Q: jahnke corporation issued 5,000 shares of 2 par value ordinary shares for 11 per share. the journal entry to record the sale will include a.a debit to cash for 10,000 b.a credit to share premiumordinary for 45,000 c.a credit to share capitalordinary for 55,000 d.a debit to retained earnings for 22,000

Q: Mark Remington, the president and CEO of Earth Systems, Inc., a waste management firm, was recently hospitalized, suffering from exhaustion and a heart ailment. Immediately prior to his hospitalization, Earth Systems had experienced a sharp decline in its stock price, and trading activity became almost nonexistent. The primary reason for this was concern expressed in the media over a new untested waste management system implemented by the company.Mr. Remington had been unwilling to submit the procedure to testing before implementation, but he reluctantly agreed to limited tests after the system was operational. No problems have been identified by the tests to date.The other members of management called a meeting to determine what they should do. Terry Jackson, the marketing manager, suggested that the company purchase a large number of shares of treasury stock. In that way, investors might notice that activity had picked up, and might decide to buy some more shares. This plan would use up most of the company’s available cash, so that there will be no money available for a cash dividend. Earth Systems has paid cash dividends every quarter for over ten years.Required:1. Is Mr. Jackson’s suggestion ethical? Explain.2. Is it ethical to discontinue the cash dividend? Explain.

Q: what is the formula for the payout ratio? what does it indicate?

Q: linda merton asks, "since stock dividends don't change anything, why declare them?" what is your answer to linda?

Q: Match each of the following elements of internal control to a phrase (a–e) that applies to it.a. Provides reasonable assurance that business goals will be achievedb. Used by management for guiding operations and ensuring compliance with requirementsc. Overall attitude of management and employeesd. Used to locate weaknesses and improve controlse. Identifies, analyzes, and assesses likeliness of vulnerabilitiesInformation and communication

Q: (a)preferred stock may be cumulative. discuss this feature. (b)how are dividends in arrears presented in the financial statements?

Q: for what reasons might a company like ibm repurchase some of its stock (treasury stock)?

Q: companies frequently issue both preferred stock and common stock. what are the major differences in the rights of stockholders between these two classes of stock?

Q: define par value, and discuss its significance in accounting.

Q: match the items below by entering the appropriate code letter in the space provided.A. Controller B. Deficit C. Payout ratio D. Stock dividend E. Declaration date F. Preemptive rightG. Par valueH. Legal capitalI. Treasury stockJ. Cumulative feature____ 1. The date the board of directors formally declares a dividend.____ 2. The amount that must be retained in the business for the protection of creditors.____ 3. Preferred stockholders have a right to receive current and unpaid prior-year dividends before common stockholders receive any dividends.____ 4. The chief accounting officer.____ 5. Measures the percentage of earnings distributed in the form of dividends to common stockholders.____ 6. The amount assigned to each share of stock in the corporate charter.____ 7. A debit balance in retained earnings.____ 8. Enables stockholders to maintain their same percentage ownership when new shares are issued.____ 9. Corporation’s own stock that has been reacquired by the corporation but not retired.____ 10. A pro rata distribution of the corporation’s own stock to stockholders.

Q: Match each of the following activities to an element of internal control (a–c). Each letter may be used more than once.a. Risk assessmentb. Control proceduresc. MonitoringHiring and properly training competent personnel

Q: the paid-in capital section of the balance sheet consists of two classifications: ______________________ and ______________________.

Q: a debit balance in retained earnings is identified as a ________________.

Q: both a stock split and a stock dividend will _________________ the number of shares outstanding and have _________________ on total stockholders equity.

Q: the entry to record the declaration of a stock dividend increases _________________, and decreases ________________.

Q: When there are major changes in a company's strategy, business structure, or operations, evaluations of controls are usually performed by a. external auditors b. internal auditors c. senior management d. the Securities and Exchange Commission

Q: three important dates associated with dividends are the: (1)___________________, (2)__________________, and (3)__________________.

Q: A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is a. a deposited check returned for insufficient funds b. collection of a note receivable for the company c. a service charge d. notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket

Q: the _______________ feature of preferred stock gives the preferred stockholders the right to receive current-year dividends and unpaid prior-year dividends before common stockholders receive any dividends.

Q: a corporations own stock that has been reacquired by the corporation and held for future use is called __________________ and is deducted from total _____________________ on the balance sheet.

Q: Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Determine the adjusted balance on May 31.Cash balance per company records, May 31 $5,400Deposits in transit 375Notes receivable and interest collected by bank 650Bank charge for check printing 40Outstanding checks 2,400NSF check 140 a. $5,870 b. $6,245 c. $4,930 d. $3,845

Q: The debit made in the journal to reimburse the petty cash fund is to a. Petty Cash b. Accounts Receivable c. Cash d. various accounts for which the petty cash was disbursed

Q: par value of stock represents the __________________ per share that must be retained in the business for the protection of corporate ___________________.

Q: The type of account and normal balance of Petty Cash is a(n) a. revenue, credit b. asset, debit c. liability, credit d. expense, debit

Q: stockholders generally have the right to share in corporate _______________ and in ______________ upon liquidation.

Q: A voucher is usually supported by a. a supplier's invoice b. a purchase order c. a receiving report d. All of these choices

Q: if the market interest rate for a bond is higher than the stated interest rate, the bond will sell at: a.a premium b.a discount c.par d.both a and b correct

Q: The amount of the outstanding checks is included on the bank reconciliation as a(n) a. deduction from the balance per company's records b. addition to the balance per bank statement c. deduction from the balance per bank statement d. addition to the balance per company's records

Q: the contractual interest rate on a bond is often referred to as the: a.callable rate b.the maturity rate c.market rate d.stated rate

Q: all of the following statements regarding convertible bonds are true except a.if the market price of common stock increases substantially, bondholders with convertible bonds benefit b.convertible bonds can be converted into common stock at the option of the issuing company c.bondholders with convertible bonds receive interest on the bonds until conversion d.convertible bonds sell at a higher price and pay a low rate of interest than those without the conversion option

Q: A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts? a. debit Accounts Payable; credit Cash b. debit Cash; credit Accounts Receivable c. debit Cash; credit Accounts Payable d. debit Accounts Receivable; credit Cash

Q: Which of the following reflects a weak internal control system? a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.

Q: the present value of a bond is also known as its a.face value b.market price c.future value d.deferred value

Q: A necessary element of internal control is a. a database b. systems design c. systems analysis d. information and communication

Q: a bond with a face value of $200,000 and a quoted price of 98 has a selling price of a.$196,500 b.$196,100 c.$196,010 d.$197,000

Q: During a bank reconciliation process, a. outstanding checks and deposits in transit are added to the bank statement balance b. outstanding checks are subtracted and deposits in transit are added to the bank statement balance c. outstanding checks and deposits in transit are subtracted from the bank statement balance d. outstanding checks are added and deposits in transit are subtracted from the bank statement balance

Q: a bond with a face value of $100,000 and a quoted price of 104 has a selling price of a.$104,250 b.$104,025 c.$100,425 d.$104,000

Q: a bond with a face value of $200,000 and a quoted price of 97 has a selling price of a.$194,500 b.$194,050 c.$194,004 d.$195,000

Q: Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is a(n) a. deduction from the balance per company's records b. addition to the balance per bank statement c. deduction from the balance per bank statement d. addition to the balance per company's records

Q: Pilger Corporation has cash on hand at year-end of $201,000 and a negative cash flow from operations of $144,000. What is the ratio of cash to monthly cash expenses? a. 12.0 months b. 7.2 months c. 1.4 months d. 16.8 months

Q: a bond with a face value of $200,000 and a quoted price of 102 has a selling price of a.$240,450 b.$204,050 c.$200,450 d.$204,500