Loading...

Pre School Quiz 2, Business - Accounting And Taxation

1
Free
On January 3, 2016, Maris Corporation issued 4,000 shares of $50 par convertible preferred stock at $90 per share. Each share is convertible into four shares of $10 par common stock.Required: a.Prepare the journal entry to record the issuance of the stock on January 3, 2016.b.On March 5, 2018, each share of preferred was converted. Prepare the journal entry to record this conversion.c.Assume that instead of the above circumstances regarding conversion, the company agrees to convert each share of preferred into ten shares of $10 par common stock on March 5, 2018. Prepare the journal entry to record this conversion.
2
Free
On January 1, 2016, Nelson Company gave 45 executives a performance-based stock option plan that allowed them to buy a maximum of 2,000 shares each of the company's $5 par common stock at $15 a share. On the grant date, the fair value per option was $8. The shares will be awarded based on the increase in sales over a four-year service and vesting period as follows:
3
Free
On January 1, 2016, Microprocessing Inc. awarded a fixed compensation stock option plan to 40 executives. The plan allows each executive to buy 2,000 shares of the company's $10 par common stock for $25 a share after a four-year service period. The fair value of each option on the grant date is $12. The company expects an annual executive turnover rate of 4%. In 2017, the rate changed to 2% for the entire service period. On December 31, 2019, 60,000 options vest and the rest are forfeited. On January 5, 2020, 10 executives of Microprocessing exercised their options.Required: a.Prepare the journal entries for 2016 through 2019.b.Prepare the journal entry for January 5, 2020.
4
Free
Bender borrows $200,000 from his uncle's bank and invests the proceeds in various corporate bonds. He pays $9,000 in interest on the loan during the current year. Bender reports investment income of $7,500 in the current year. How much of the interest expense is deductible by Bender?
5
Free
Righty, Inc., entered into a stock subscription contract that called for the purchase by investors of 15,000 shares of $12 par common stock at a price of $33 per share. The contract required a down payment of $15 per share, with the remaining $18 per share collectible at the end of three months.Required: a.Prepare the journal entry to record the stock subscription and down payment.b.The subscribers paid the remainder at the end of three months. Prepare the journal entry(ies) to record the final payment and the issuance of the shares of stock.
6
Toronto, Inc. issued 4,000 shares of $100 par preferred stock at $155 a share. Each share of stock has a warrant attached to it that allows the holder to purchase one share of $20 par value common stock at $50. Shortly after the preferred stock was issued, the stock sold for $150 ex-rights and the warrants sold for $10 each.Required: a.Prepare the journal entry to record the issuance of the preferred stock.b.Prepare the journal entry to record the exercise of 2,200 of the warrants.c.Prepare the journal entry to record the expiration of the remaining 1,800 warrants.
7
Sully Sports Cars Co. entered into a subscription contract with various investors. The terms were as follows: ​ · 2,000 shares of $5 par common at $24. · $10 down payment per share; two subsequent payments of $7 each. Required: a.Record the subscription and the receipt of the down payment.b.The first subsequent $7 payment was received from all subscribers.c.When the final $7 payment was due, 90% of the final total amount due was received and stock was issued. Record this receipt and stock issuance.d.The remaining 10% of the final payment was not received. According to contract provisions, half of any previous payments should be returned to the subscriber with the remaining half forfeited by the subscriber. Record the entry related to the default.
8
A firm's current products have sales of $100,000 and an average contribution margin ratio of 40%. If the firm add a new product with sales of $40,000 and variable costs of $20,000, the firm's new average contribution margin ration will be:
9
AmCo and BamCo form the AB General Partnership at the start of the current year with a land contribution by BamCo and a cash contribution by AmCo. BamCo’s contributed property is subject to a recourse mortgage assumed by the partnership. BamCo has an 80% interest in AB’s profits and losses. The land has been held by BamCo for the past 6 years as an investment. It will be used by AB as an operating asset in its parking lot business. Which of the following statements is correct?
10
Ashley holds a 65% interest in a business entity. Her basis for ownership interest is $300,000. The net income of the business for the tax year is $100,000 and the entity liabilities have increased by $60,000. Determine the effect of the earnings and the liabilities on Ashley’s basis for her ownership interest if the business is:  a.A C corporation.   b.An S corporation.  c.A partnership.
11
Jackson gives both his supervisor and her husband a $30 box of chocolates at Christmas. Jackson may claim only $25 as a deduction.
12
The following information is provided for Wolf Company: ​ Retained earnings$445,000 Preferred stock, 5%, $50 par100,000 Organization expense2,500 Additional paid-in capital on common stock? Additional paid-in capital from recall of preferred stock2,500 Premium on bonds payable5,700 Common stock, $10 par350,000 ​ If total contributed capital is $506,000, what is the amount of additional paid-in capital on common stock for Wolf Company?
13
The following information is provided for Miller Corporation: Common stock, $10 par$340,000 Bonds payable28,000 Additional paid-in capital from preferred stock conversion3,000 Retained earnings100,000 Additional paid-in capital on preferred stock10,000 Common stock subscribed30,000 Accumulated other comprehensive income5,600 Premium on bonds payable2,000 Preferred stock, 6%, $100 par80,000 ​ What is the amount of contributed capital for Miller Corporation?
14
During 2016, Goodfellow has the following transactions involving its common and preferred stock: a.Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 shares and 100,000 shares are authorized.b.Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share.c.When the market value of the common stock reached $15 a share, Goodfellow declared a 3-for-1 stock split, reducing the par value to $1.67 per share.Required:Prepare a journal entry for each transaction.
15
​ Exhibit 15-9 Groundcover, Inc. had never had a treasury stock transaction prior to 2016. It experienced the following treasury stock transactions during 2016: 4/1/2016: Reacquired 1,000 shares of its own $5 par common stock, originally sold at $12 a share, for $10 a share. This was the first time that Groundcover had reacquired its own stock. 4/8/2016: Reissued 400 shares at $8 a share. 5/2/2016: Reissued 500 shares at $13 a share. 5/10/2016: Retired the remaining 100 shares. Assume the cost method is used. ​ Refer to Exhibit 15-9. The entry to record the reissuance of 400 shares on 4/8/2016 would include a
16
Below is information obtained from Carver's 2016 annual report: ​ ​ ​ ​ 2016 2015 ​ Average Assets ​ $4,567.3 $4,235.2 ​ Average shareholder's equity 3,545.6 2,895.8 ​ Net sales ​ ​ 15,675.4 13,267.9 ​ Net income ​ ​ 1,257.8 987.9 ​ ​ Required: Compute the ROE for 2015 and 2016 using the DuPont model.
17
Chicago Cleaning Services provides nightly janitorial services at a monthly rate of $300. Customers have three payment options: Month-by-month payments$300One-year advance payment3,360 ($280 per month)Two-year advance payment6,480 ($270 per month)If Chicago Cleaning is an accrual basis taxpayer, then: I.all cash payments are taxable when they are received.II.one-year advance payments must be included in income in the year they are received.III.two-year advance payments are attributable to service in two years and, hence, must be included in income in the year they are received.IV.one-year advance payments may be deferred: $280 would be included in income for each month of service provided.​
18
Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the property, a gain results. If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to the application of the wherewithal to pay concept.
19
When a company acquires treasury stock, what effect does this transaction have on earnings per share and legal capital, respectively?
A message will be sent to your email address with instructions
 
 
 
 
 
 
 
 
 
 
 
...