Info
Warning
Danger

Study Resources (Accounting)

31.Which type of dividends do NOT reduce total shareholders' equity? a) cash dividends b) stock dividends c) property dividends d) liquidatingdividends 32.The declaration and issuance of a stock dividend larger than 25% generally a) increases common shares outstanding and increases total shareholders' equity. b) increases retained earnings and increases total shareholders' equity. c) may increase or decrease common.
48 Views
View Answer
Pr. 14-81Entries for bonds payable Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds by Glendale Corp. Show calculations and round to the nearest dollar. March 1 Issued $200,000 (face value) 8% bonds for $218,040, including accrued interest. Interest is payable semi-annually on December 1.
14 Views
View Answer
Pr. 14-85 Accounting for a troubled debt settlement Santa Ltd., who owes Claus Corp. $600,000 in notes payable, is in financial difficulty. To eliminate the debt, Claus agrees to accept from Santa land having a fair value of $455,000 and a recorded cost of $340,000. Instructions a)Calculate the amount of gain or loss.
19 Views
View Answer
Ex. 14-76 Accounting for a troubled debt restructuring On December 31, 2014, Riverside Inc. is in financial difficulty and cannot pay a $350,000 note (with $35,000 accrued interest payable) to Stockton Corp. Stockton agrees to forgive the accrued interest, extend the maturity date to December 31, 2016, and reduce the interest.
10 Views
View Answer
  Exercises Ex. 14-64 Underwriting for bond issues Explain the difference between firm underwriting and best efforts underwriting. Ex. 14-65 Terms related to long-term debt Place the letter of the best matching phrase before each term.      1.Debenture     6.Debt to total assets ratio      2.Bearer bonds     7.Term bonds      3.Income bonds     8.Leverage      4.Carrying value     9.Callable bonds      5.Stated rate     10.Market rate a)Bonds that mature on a single date. b)Rate set by.
14 Views
View Answer
Multiple Choice—Computational 71.Berlin Corporation was organized on January 1, 2017, with 400,000 no par value common shares authorized. During 2017, the corporation had the following share transactions: Jan 5Issued 150,000 shares at $10 per share Apr 6Issued 50,000 shares at $12 per share Jun 8Issued 50,000 shares at $14 per share Jul 28Purchased 20,000 shares.
40 Views
View Answer
PROBLEMS Pr. 14-78Bond interest and discount amortization On June 1, 2017, Santa Ana Corp. sold 10-year, $500,000 (face value) bonds for $438,800. The bonds have a stated interest rate of 8% and a yield of 10%, and pay interest annually on May 31 of each year. The bonds are to be accounted.
11 Views
View Answer
91.Sarajevo Ltd. currently has outstanding 20,000 no par value common shares with a carrying value of $200,000, and 10,000 no par value, $0.60, cumulative, fully participating preferred shares with a carrying value of $100,000. Dividends on the preferred shares are one year in arrears. Assuming that Sarajevo wishes to distribute.
31 Views
View Answer
Pr. 13-82Refinancing of short-term debt At their last year end, December 31, 2017, the liabilities outstanding of Copper Corp. included the following: 1.Cash dividends on common shares, $100,000, payable on January 15, 2018 2.Note payable to Manitoba Bank, $850,000, due January 20, 2018 3.Serial bonds, $2,000,000, of which $500,000 matures during 2018 4.Note payable to.
9 Views
View Answer
Ex. 15-127Share subscriptions On April 28, 2017, SwedenInc. accepted subscriptions for 10,000 of its no par value common shares. At this time, the shares were selling for $45 each.A 40% down payment was received with the remainder due in six months. On October 28, 2017the balance of the subscription price was.
12 Views
View Answer
31.The times interest earned ratio is calculated by dividing a) net income by interest expense. b) income before taxes by interest expense. c) income before income taxes and interest expense by interest expense. d) net income and interest expense by interest expense. 32.The debt to total assets ratio is calculated by dividing a) total liabilities by.
23 Views
View Answer
Ex. 15-130Reacquisition of shares For numerous reasons, a corporation may reacquire its own shares. When a corporationdoes this, the CBCA requires that the purchased shares be cancelled. Instructions Explain how a corporation would account for each of the following: a)Purchase of shares at a price less than the carrying value of the shares b)Purchase of.
12 Views
View Answer
Pr. 14-84Bond accounting, ratios, debt covenants Superior Equipment Corporation is a public Canadian company manufacturing high-precision equipment. On January 1, 2014, Superior issued a 12%, $10,000,000 bond, maturing in ten years. At January 1, 2017, the bond had a carrying value of $9,300,000. Interest is payable semi-annually on June 30 and.
15 Views
View Answer
81.The shareholders' equity section of Zagreb Corp. at December 31, 2016 was: Common shares, no par value; authorized 20,000 shares; issued and outstanding 10,000 shares..................$50,000 Retained earnings......................................200,000 $250,000 On February 28, 2017, when the market value of Zagreb’s shares was $12 per share, the board of directors declared a 15% stock dividend, and accordingly.
30 Views
View Answer
Pr. 13-83Employee-related liabilities Identify and account for the major types of employee-related liabilities Pr. 13-84Asset Retirement Obligation Extraction Friendly Ltd. (EFL) specializes in extracting ore. It prides itself for following high environmental standards in the extraction process. On January 1, 2013, EFL purchased the rights to use a parcel of land from the.
8 Views
View Answer
Ex. 14-75Accounting for a troubled debt settlement At December 31, 2014, Oscar Ltd. owes Wilde Corp. for a $300,000 note payable, plus accrued interest of $27,000. Oscar is now in financial difficulty and cannot repay Wilde. To settle the debt, Wilde agrees to accept from Oscar equipment with a fair value.
8 Views
View Answer
11.If bonds are issued between interest dates, the entry on the books of the issuing corporation could include a a) debit to Interest Payable. b) credit to Interest Receivable. c) credit to Interest Expense. d) credit to Unearned Interest. 12.When the interest payment dates of a bond are May 1 and November 1, and a.
12 Views
View Answer
Pr. 13-86Warranties Alaska Computer Company sells computers for $2,000 each, which includes a 3-year warranty that requires the company to perform periodic services and to replace defective parts. During 2017, Alaska sold 500 computers on account. Based on past experience, the company has estimated the total 3-year warranty costs at $80.
14 Views
View Answer
Pr. 14-79Bond interest and discount amortization On October 1, 2017, Irvine Corp. issued $400,000 8% bonds, due on October 1, 2022. Interest is to be paid semi-annually on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Irvine has a calendar year end. Instructions a)Complete the following.
14 Views
View Answer
Exercises Ex. 15-125Lump sum issuance of shares BertramCorp. is authorized to issue 15,000 no par value common shares and 5,000 no par value preferred shares. On January 16, 2017, the corporation sold 50 common shares and 75 preferred shares for a lump sum of $18,000. The common were selling at $50 and.
12 Views
View Answer
11.Aye Corp. sells common shares on a subscription basis. The Common Shares account should be credited when the a) shares are subscribed for. b) first payment is made. c) last payment is made. d) last payment is made and the shares are issued. 12. Subscriptions Receivable are reported as a) a non-currentasset. b) a currentasset. c) a deduction.
56 Views
View Answer
Ex. 14-66 Amortization of discount or premium On May 1, 2014, Salinas Industries Ltd. issued $2,000,000, 8% bonds and received cash proceeds of $1,774,526. The bonds pay interest semi-annually on May 1 and November 1. The maturity date on these bonds is November 1, 2026. Salinas uses the effective-interest method of.
25 Views
View Answer
PROBLEMS Pr. 15-146Issuance of shares for cash, noncash consideration, and by subscription Presented below is information related to RhodesiaCorp.: 1.Rhodesia is granted a charter that authorizes issuance of 100,000 no par value preferred shares and an unlimited number of nopar value common shares. 2.10,000 common shares are issued for land with a fair value.
10 Views
View Answer
Ex. 14-77 Accounting for troubled debt a)What are the general rules for measuring and recognizing gain or loss by the debtor on a settlement of troubled debt, which includes the transfer of non-cash assets? b)What are the general rules for measuring and recognizing a gain and for recording future payments by the.
9 Views
View Answer
Ex. 15-137Dividends on preferred shares At December 31, 2017, Russia Inc. has outstanding the following shares: 5,000, $3.20, no par value preferred shares with a carrying value of $200,000, and40,000 no parvalue common shares with a carrying value of $600,000. No dividends have been paid since December 31, 2014. The corporation now desires.
33 Views
View Answer
*Ex. 15-141Calculation of selected financial ratios Cuba Corp. provides the following information for 2017: Preferred shares, 8%, par value $100, cumulative, callable: Call price per share.................................$105 Shares outstanding.................................5,000 Dividends in arrears.................................none Common shares, no par value: Shares issued.....................................60,000 Dividends paid per share.............................$1.60 Market price per share...............................$36.00 Carrying value.....................................$800,000 Retained earnings (after closing)..........................$175,000 Treasury shares (common)...............................$125,000 Number of treasury shares held.......................5,000 Net income for 2017....................................$260,000 Instructions Calculate.
34 Views
View Answer
Ex. 15-139Lump sum issuance of par value shares ChileCorp. issued 2,000 common shares and 400 preferred shares to an investor for $72,000 cash. Instructions a)Prepare the journal entry for the issuance, assuming the par value of the common shares was $5 and the market value was $30, and the par value of the.
11 Views
View Answer
*Ex. 15-143Treasury shares ZambiaLtd.currently has 150,000 no par value common shares outstanding, with a carrying value of $3,900,000. Instructions Record the following transactions: a)Purchased 1,500 common shares at $29 per share, to be held as treasury shares b)Sold 800 treasury shares at $30 a share c)Retired the rest of the treasury shares *Ex. 15-144Financial reorganization The following shareholders’.
13 Views
View Answer
Pr. 14-82Entries for bonds payable Prepare journal entries to record the following transactions relating to long-term bonds of Lancaster Inc. Show calculations and round to the nearest dollar. a)On June 1, 2017, Lancaster Inc. issued $400,000, 6% bonds for $391,760, including accrued interest. The bonds were dated February 1, 2017, and interest.
15 Views
View Answer
MULTIPLE CHOICE—Conceptual 1.The residual interest in a corporation belongs to the a) management. b) creditors. c) common shareholders. d) preferred shareholders. 2.Which statement is correct regarding real estate income or investment trusts? a) They are often set up as unlimited purpose trust funds. b) They are considered to be special purpose entities. c) The unitholders (investors) do not pay.
29 Views
View Answer
PROBLEMS Pr. 13-80Common types of current liabilities Define and identify common types of current liabilities and how they are valued. Pr. 13-81Accounts and Notes Payable Below are selected transactions of Blackbird Ltd. for 2017: 1.On May 10, the company purchased goods from Jay Corp. for $60,000, terms 2/10, n/30. Purchases and accounts payable are recorded.
11 Views
View Answer
Pr. 14-83Accounting for bond issuance and retirement Twilight Corp. desired to raise cash to fund its expansion by issuing long-term bonds. The corporation hired an investment banker to manage the issue (best efforts underwriting) and also hired the services of a lawyer, an audit firm, etc. On June 1, 2017, Twilight.
72 Views
View Answer
21.Which of the following transactions wouldNOT result in a decrease to retained earnings? a) declaration and issuance of a stock dividend b) incurrence of a net loss for the period c) reacquisition ofshares for less than the original issue price d) correctionof an error in which depreciation expense was understated in a prior period 22.Which.
17 Views
View Answer
111.If, instead of holding the 4,000 shares as treasury shares, Oslo had decided to cancel them, Oslo should debit a) Common Shares for $48,000 and Retained Earnings for $12,000. b) Contributed Surplus for $48,000 and Retained Earnings for $12,000. c) Contributed Surplus for $60,000. d) Common Shares for $60,000. *112.London Corporation has 50,000 no par.
14 Views
View Answer
MULTIPLE CHOICE—Conceptual 1.Which of the following is NOT generally classified as a long-term liability? a) stock dividends distributable b) pension liabilities c) mortgages payable d) lease liabilities 2.Restrictions included in restricted covenants do NOT generally include a) working capital restrictions. b) limits on executive compensation. c) dividend restrictions. d) limitations on incurring additional debt. 3.A contract representing the covenants and other.
36 Views
View Answer
Ex. 15-132Items affecting retained earnings What are the items that increase or decrease retained earnings? Ex. 15-133Stock dividends Describe the accounting treatment for the declaration of acommon stock dividend. Ex. 15-134Stock dividends and stock splits Indicate the principal effects of a stock dividend versus a stock split as they affect the issuing corporation. Respond in.
11 Views
View Answer
Ex. 15-135Dividends on preferred shares On December 31, 2017, the shareholders' equity of Finland Corporation shows the following: Preferred shares—$6, no par, 8,000 shares outstanding.......$ 400,000 Common shares—no par, 60,000 shares outstanding.........800,000 Retained earnings......................................240,000 Total shareholders' equity................................$1,440,000 Assumethat preferred dividends were last paid on December 31, 2015, and that all of the company's retained earnings are.
21 Views
View Answer