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32) Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31, 20xx, from the following: Retained Earnings, January 1, 20xx$2,000 Dividends paid during the year800 Net income for the year3,000 Correction of prior year error. Purchase of land recorded as rent expense1,000 33) Prepare a statement of retained.
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47) Prepare the following journal entries for Complex Company. March 15 Declared the stated dividend on 5,000 shares of $10 par, 5% preferred stock. April 15 Paid the dividend. 48) Prepare the following stock dividend journal entries for Tamera, Inc. June 19 Declared a 7% stock dividend to common stockholders. The stock has a.
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19.4   Learning Objective 19-4 1) Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings. This error would cause: A) the period's net income to be understated. B) the period end liabilities to be understated. C) the total period end stockholders' equity to be understated. D).
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17) Describe bond refunding and explain why it might be advantageous for a company. Using the following accounts: [1]Cash [2]Sinking fund [3]Equipment [4]Building [5]Land [6]Accounts payable [7]Notes payable [8]Bond payable [9]Bond interest expense payable [10]Premium on bonds payable [11]Discount on bonds payable [12]Common stock [13]Retained earnings [14]Sinking fund earned [15]Bond interest expense [16]Gain on retirement [17]Loss on retirement Indicate the account(s) to be debited and credited to record the.
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11) Bond Interest Payable is reported as a: A) current liability on the balance sheet. B) current liability on the income statement. C) contra-liability on the balance sheet. D) contra-liability on the income statement. 12) The carrying value of bonds is calculated by: A) subtracting the Premium on Bonds Payable account balance from the Bonds Payable.
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11) Bonds payable issued with collateral are called: A) debenture bonds. B) serial bonds. C) callable bonds. D) secured bonds. 12) Bonds that may be redeemed at a certain price level are known as: A) callable bonds. B) debenture bonds. C) serial bonds. D) convertible bonds. 13) Dividends paid to stockholders are: A) taxable to the recipient stockholder. B) taxable to the.
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21) A stock-split journal entry would include a: A) debit to Retained Earnings and a credit to Common Stock. B) debit to Common Stock and a credit to Cash. C) debit to Common Stock Dividend Distributable and a credit Common Stock. D) memorandum notation only. 22) The retained earnings section after a two-for-one stock split.
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20.1   Learning Objective 20-1 1) A special type of long-term interest-bearing note payable issued by a corporation to raise capital is called a: A) short-term note payable. B) bond payable. C) stock issue. D) treasury stock issue. 2) The contract rate for a bond is: A) the annual interest rate based on selling price. B) the annual interest.
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31) Dividends received on investments made in the stock of other companies is an example of a financing activity. 32) One section of a statement of cash flows is purchasing activities. 33) Changes in current assets and current liabilities accounts deal with financing activities. 34) An example of operating activities is the payment.
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20.3   Learning Objective 20-3 1) Bonds are issued for $10,000 at 8% on October 1. What is the adjusting entry on December 31? A) Bond Interest Expense 800 Bond Interest Payable 800 B) Bond Interest Expense 200 Bond Interest Payable 200 C) Bond Interest Payable 200 Bond Interest Expense 200 D) Bond Interest Payable 800 Bond Interest Expense 800 2) Bonds are issued for $80,000 at 12%.
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21.4   Learning Objective 21-4 1) Which of the following is not a cash flow from investing activities? A) Loaning cash to borrowers B) Payment of cash dividends C) Sale or purchase of land D) Cash received from the sales of stock 2) If $12,000 was generated from operations, $6,000 was used for investing activities, and $4,000.
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21.1   Learning Objective 21-1 1) A statement of cash flows: A) has three main sections: net cash flow from operating, investing, and financing activities. B) may be computed directly or indirectly. C) is a statement used to better understand the financing and investing activities. D) All of the above are correct. 2) The cash flow statement.
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31) The Accounts Payable balance has decreased during the year. How would this event affect the statement of cash flows operations section—indirect method? A) It is already included in the net income. B) It would affect the operations section positively. C) It would affect the operations section negatively. D) Does not affect the cash.
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31) Declaration of a cash dividend was recorded by debiting Operations Expense and crediting Cash. This error would cause: A) the period end assets to be overstated. B) the period end liabilities to be overstated. C) the period end stockholders' equity to be understated. D) None of the above are correct. 32) The declaration of.
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18.3   Learning Objective 18-3 1) If preferred dividends are limited to the stated rate of dividend, the preferred stock is: A) non-cumulative. B) cumulative. C) participating. D) nonparticipating. 2) Preferred stock that is given a right to share with the common stock in dividends in excess of a stated preferred dividend rate is called: A) nonparticipating. B) participating. C).
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20.2   Learning Objective 20-2 1) If a bond is issued at a premium, the effective interest rate is most likely ________ the contract interest rate. A) higher than B) lower than C) the same as D) Cannot be determined based on information given. 2) The entry to record the semiannual payment and amortization of the discount.
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41) The interest paid to bondholders is determined by: A) multiplying the bond's annual rate of interest by the face value. B) multiplying the market rate of interest by the face value. C) dividing the bond's annual rate of interest by the face value. D) dividing the face value by the bond's annual rate.
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19.1   Learning Objective 19-1 1) The price a corporation pays when it reserves the right to retire or redeem stock at a specific price is the: A) redemption value. B) book value per share. C) dividend per share. D) market value. 2) The price at which shares are bought and sold on the open market is.
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21) Hefley Corporation issued a 10%, $500,000, 8-year bond at 105. The entry to record the issuance transaction is to: A) debit Cash $500,000; credit Bonds Payable $500,000. B) debit Cash $525,000; credit Bonds Payable $525,000. C) debit Cash $525,000; credit Bonds Payable $500,000; credit Premium on Bonds Payable $25,000. D) debit Cash $500,000;.
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15) Rick's Internet Corporation balance in Retained Earnings is $30,000. The board of directors directs that $15,000 be appropriated for future business expansion. This will cause total retained earnings to: A) remain at $30,000. B) increase by $15,000. C) decrease by $15,000. D) increase or decrease $5,000, as determined by the board. 16) Changes in.
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18.2   Learning Objective 18-2 1) The entry to record MidIowa.net selling 800 shares of $6.00 par value common stock at $8.00 would be to: A) debit Cash $6,400; credit Common Stock $4,800; credit Paid-in Capital in Excess of Par Value-Common $1,600. B) debit Cash $4,800; credit Common Stock $4,800. C) debit Cash $6,400; debit.
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11) When treasury stock is reissued for more than cost: A) debit Cash; credit Treasury Stock and Paid-in Capital from Treasury Stock. B) debit Cash; credit Common Stock and Paid-in Capital from Common Stock. C) debit Cash; credit Treasury Stock. D) debit Cash; credit Treasury Stock and Retained Earnings. 12) Farm and Supply reissued 100.
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21) Carolina Company sold a machine for $12,000 cash, which had an original cost of $19,000 and accumulated depreciation of $6,000. The amount of cash provided by this sale is: A) $12,000. B) $13,000. C) $18,000. D) $19,000. 22) A transaction of issuance of stock in exchange for equipment would be recorded as a(n): A) operating.
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11) When comparing net cash provided by operating activities using the indirect versus direct method: A) net cash is higher using the indirect method B) net cash is lower using indirect method C) there is no difference between the two methods D) depreciation expense is used in the direct method. 12) Rick Corporation's Accounts Receivable.
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21.3   Learning Objective 21-3 1) The method of reporting cash flows from operating activities under which revenues and expenses on the income statement are adjusted to reflect the amount of cash received or expended for each item is the: A) direct method. B) indirect method. C) combination method. D) adjustment method. 2) Many accountants prefer which.
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19.2   Learning Objective 19-2 1) What are the annual dividends on preferred stock, $20 par, 2,000 shares authorized, 700 shares issued, and a dividend rate of 5%? A) $200 B) $20 C) $700 D) $70 2) What are the annual dividends on preferred stock, $20 par, 500 authorized, 250 shares issued, and a dividend rate of.
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Using the following accounts: [1]Cash [2]Subscription receivable common stock [3]Machinery [4]Building [5]Land [6]Organization costs [7]Preferred stock [8]Common stock [9]Paid in capital in excess of par preferred stock [10]Paid in capital in excess of par common stock [11]Common stock subscribed [12]Discount on common stock [13]Amortization expense organization costs Indicate the account(s) to be debited and credited to record the following transactions. 34) Sold common stock at.
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11) A sale of fixed assets for cash is a(n): A) managing activity. B) investing activity. C) financing activity. D) operating activity. 12) Cash flows from financing activities would include: A) issuance of long-term notes. B) cash purchase of stocks and bonds. C) cash from sale of stock investments. D) All of these answers are correct. 13) Payments of cash.
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16) Alpha-Omega Industries has 30,000 shares of $12 par common stock and 15,000 shares of $50 par, 5% preferred stock outstanding. Total dividends available are $162,000. Compute the dividends to be distributed to preferred and common stockholders under the following condition. The preferred stock is participating and non-cumulative with no dividends.
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18.4   Learning Objective 18-4 1) The journal entry for the receipt of a cash payment on common stock subscriptions would include: A) debiting Subscriptions Receivable-Common Stock ; crediting Common Stock. B) debiting Common Stock; crediting Subscriptions Receivable-Common Stock. C) debiting Cash; crediting Subscriptions Receivable-Common Stock. D) debiting Cash; crediting Common Stock Subscribed. 2) The Bean Counter.
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21) The primary difference between secured bonds and debenture bonds is: A) debenture bonds are paid on the same maturity date while secured bonds are paid on multiple dates. B) secured bonds are backed with specific assets while debenture bonds are not. C) secured bonds are registered with the issuing company while debenture.
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21) The records of Ashley Boutique showed Net Loss, $25,000; Depreciation Expense, $35,000; and increase in Supplies on Hand, $8,000. The amount of Net Cash Flow from Operating Activities using the indirect method is: A) $18,000. B) $ 2,000. C) ($18,000). D) ($2,000). 22) Accounts Receivable amounted to $215,000 at the beginning of the year.
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21.2   Learning Objective 21-2 1) When preparing the statement of cash flows by the indirect method, if current assets have increased the difference is: A) added to net income. B) added to investments. C) deducted from net income. D) subtracted from investments. 2) Using the indirect method for cash flows, depreciation expense is added to net.
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20.4   Learning Objective 20-4 1) Assume the following account balances immediately after an interest payment date: Bonds Payable $100,000 Premium on Bonds Payable 5,000 If the bonds are retired immediately at a total cost of $104,000, the journal entry to record this event is: A) Cash 104,000 Loss on Bond Retirement     1,000 Premium on Bonds Payable 5,000 Bonds Payable 100,000 B) Bonds Payable 100,000 Premium on.
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19.3   Learning Objective 19-3 1) Treasury stock was purchased and recorded as an asset. This error would cause: A) the period end assets to be understated. B) the period end liabilities to be overstated. C) the period end stockholders' equity to be overstated. D) None of the above is correct. 2) When treasury stock was sold.
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