Accounting Final

Galveston, Inc. has 308,000 shares authorized, 140,000 shares issued, and 14,000 shares of treasury stock. How many shares are outstanding?

126,000 outstanding = issued - treasury 126,000 = 140,000 - 14,000

Lyndale, Inc.'s sales are $513,000 and $360,000 during the current and prior years, respectively. The percentage change is:

42.5% (current year - prior year)/prior year x 100

Cash flows from investing activities include cash:

inflows from the sale of long-term investments

Horizontal analysis

is used to identify trends over time

What does the par value of a stock represent?

it is a legal concept not related to the market value of a stock

What is the purpose of the statement of cash flows?

it is intended to provide a cash-based view of a company

A stock dividend transfers:

retained earnings to contributed capital

In a common size income statement, each item on the income statement is expressed as a percentage of

sales revenue

The three key pieces of information that are stated on a bond certificate are the

stated interest rate, the face value of the bond, and the maturity date

Gross earnings for the pay period are $100,000. Required payroll deductions are: Social Security $6,700; Medicare $1,450; Federal Income tax $18,000 and State income tax $3,850. The journal entry to record wages paid includes a:

$100,000 debit to salaries and wages expense

Yamhill, Inc. began on January 1, 2016 by issuing 200,000 shares of $1 par value common stock and 2,000 shares of $100 par value, 5%, cumulative preferred stock. No dividends were declared in 2016 or 2017. In 2018, Yamhill declared and paid the preferred stockholders and a $0.50 dividend to its common stockholders. Assuming all shares originally issued are outstanding, the total dividend declared and paid in 2018 equals:

$130,000

Hermosa Vista Company issued $200,000 % year, 7% bonds and received $202,274 in cash. The market rate of interest when the bonds were issued was 6.5%. What is the amount of interest paid to bondholders?

$14,000 interest paid = face value x stated interest rate $200,000 x 0.07 = $14,000

A one-year, $15,000, 6% note is signed on April 1. If the not is repaid on September 1 of the same year, how much interest expense is incurred?

$375 Interest = P x R x T $15,000 x 0.06 x 5/12 = $375

Payroll deductions

are amounts subtracted from employees' gross earnings to determine their net pay

A contingent liability is:

a potential obligation that depends on a future event

Mountain View Co. buys back 3,000 shares of its $10 par value common stock from investors at $126 per share. This stock repurchase would be recorded with a debit to:

Treasury stock and a credit to cash for $378,000 (3,000 x $126 = $378,000)

Sales tax collected by a company is normally reported as

a current liability

If shares of common stock are issued at a market price greater than par value, the amount in excess of par should be credited to:

additional paid-in capital

Stock splits and large stock dividends have which of the following similarities or differences in their effects and requirements for a journal entry?

both change the number of shares outstanding, effect on par value per share only changes for a stock split, journal entry required only for a stock dividend

Which of the following would be included in cash flows from investing activities?

cash used to purchase equipment

The entry to record the initial borrowing of cash by issuing a promissory not will include a debit to _____________ and a credit to ___________

cash, notes payable

On November 1, 2018, Sky Mountain Co. borrowed $200,000 cash on a 1-year, 6% note payable that requires Sky Mountain to pay both principal and interest on October 31, 2019. Given no prior adjusting entries have been recorded, the adjusting journal entry on December 31, 2018, Sky Mountain's year-end, would include a:

credit to interest payable of $2,000