Accounting Final
Sara Company's Cash account shows an ending balance of $650. The bank statement shows a $29 service charge and an NSF check for $150. A $240 deposit is in transit, and outstanding checks total $420. What is Sahara's adjusted cash balance?
471
Marvin Corporation has the following information reported on the balance sheet as of December 31, 2017: Common Stock, $10 par value (authorized 20,000 shares)=$80,000 Treasury Stock (2,000 shares)=$30,000 Based on the information above, how many shares of common stock are outstanding?
6.000
Bloom Corporation issued 60,000 shares of common stock. Bloom purchased 4,000 shares and later reissued 1,000 shares. How many shares are issued and outstanding?
60.000 issued and 57.000 outstanding
A bond with a face value of $90,000 and a quoted price of 106 has a selling price of:
90.000*1.06=95.400
perpetual inventory system
A detailed inventory system in which a company maintains the cost of each inventory item, and the records continuously show the inventory that should be on hand.
Sarbanes-Oxley Act
A law passed by Congress that requires the CEO and CFO to certify that their firm's financial statements are accurate. also requires that an outsider auditor must evaluate a public companys internal controls
preferred stock
A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.
periodic inventory system
An inventory system in which a company does not maintain detailed records of goods on hand throughout the period and determines the cost of goods sold only at the end of an accounting period.
journal entry for 2% bonus on $60.000 net income
B = .02(60.000-B) B = 1.200-.02B 1.02B = 1.200 B = 1.176
Madison Bank lends Neenah Paper Company $110,000 on January 1, 2017. Neenah signs a $110,000, 6%, 6-month note. The journal entry made by Neenah on January 1, 2017 will debit:
Cash for $110,000 and credit Notes Payable for $110,000.
per share cash dividend
EPS = (net income - preferred stock dividends) ÷ (outstanding shares) For example, if company ABCWXYZ has 20 million shares outstanding, had a net income of $10 million, and paid out a dividend of $1 million to its preferred stockholders for the last fiscal year; the EPS is 45 cents ($10 million - $1 million) ÷ (20 million shares outstanding).
discount bond
Market interest rate is higher than the contractual interest rate
cash dividend
On the date of declaration, the board of directors resolves to pay a certain dividend amount in cash to those investors holding the company's stock on a specific date. The date of record is the date on which dividends are assigned to the holders of the company's stock. On the date of payment, the company issues dividend payments.
Cash Basis Accounting
Reporting income when the cash is received and expenses when the cash is paid.
When bonds are issued at a discount, which of the following would be included in the journal entry to record the issuance? (check all that apply)
a debit to discount on bonds payable a credit to bonds payable
compound journal entry
a journal entry that is characterized by having multiple debits and or multiple credits
trial balance
a list of all accounts with their balances at a point in time
Straight-Line Amortization
a simplified method of amortizing a bond discount or premium that allocates an equal dollar amount to each interest period
FOB destination
a situation in which the buyer takes ownership at the delivery point
retailer
a type of merchandiser that buys merchandise either from a manufacturer or a wholesaler and then sells those goods to customers
promissory note
a written contract with a promise to pay a supplier a specific sum of money at a definite time
which of the following accounts is not closed
accumulated depreciation
Before a company can pay dividends to the common stockholders, the owners of cumulative preferred stock must receive:
all dividends in arrears plus the current year's dividends
bond investment that matures in four years. the investor plans to hold the bond for the full four years
amortized cost
purchase allowance
an amount granted to the purchaser as an incentive to keep goods that are not as ordered
asset
an economic resource that is expected to be of benefit in the future
which cost is NOT recorded as part of the cost of a building
annual building maintenance
accounts receivable
asset
cash
asset
land
asset
office supplies
asset
accounts payable is in
balance sheet
accounts receivable is in
balance sheet
cash is in
balance sheet
common stock is in
balance sheet
land is in
balance sheet
office supplies is in
balance sheet
accounting equation
basic tool of accounting states as assets = liabilities + equity
FOB shipping point
buyer takes title to the goods after the goods leave the sellers place of business
A company issues 1,000,000 shares of $0.50 par value, cumulative preferred stock for $18,000,000. The stated dividend is $1 per share. Which journal entry is needed for the sale?
debit cash 18.000.000 credit preferred stock 500.000 credit paid-in capital in excess of par-preferred 17.500.000
On March 15 th , ABC decided to sell 200 shares of its treasury stock it purchased in problem 8 at $12 per share.
debit cash 2.400 credit treasury stock - common 2.400
On Jun 30 th , 2019 ABC Inc issued 1,000 shares of preferred stock with $1 par value for $25 per share. Record the journal entry for the issuance of preferred stock at a premium
debit cash 25.000 credit preferred stock - $1 par value 1.000 credit paid-in capital in excess of par - preferred stock 24.000
Declared a $0.30 per share cash dividend on the common stock outstanding.
debit cash dividends credit common dividends payable
On November 15 th , 2019 UCA Inc declared a cash dividend of $2 per share on 10,000 shares of common stock. It paid out the dividends on December 1 st . Record the November 15 th Journal entry.
debit cash dividends 20.000 credit dividends payable - common 20.000
Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued. The journal entry to record Kunze's purchase of 5000 shares of common stock at $4 per share would be:
debit treasury stock 20.000 credit cash 20.000
Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued. The journal entry to record Kunze's purchase of 10,000 shares of common stock at $3 per share would be:
debit treasury stock 30.000 credit cash 30.000
purchased 2.200 shares of treasury stock at $24 per share
debit treasury stock 52.800 credit cash 52.800
Unearned Revenue: In the month of March, Wampus Cat Inc collected $1800 in cash for services to be provided equally over April, May and June of 2019. Each month they performed a third of the services per the agreement b. Record the entry on April 30 th , for services completed.
debit unearned revenue 600 credit service revenue 600
ABC Inc made sales on account of $50,000 on June 10 th . The company estimates their warranty cost will be 5% of sales. On June 30 th , they had an actual warranty cost of $750 they paid in cash b. Record the entry on 6/30 to record their actual warranty cost they paid.
debit warranty claim payable 750 credit cash 750
estimates warranty expense at 2% of sales of $430.000
debit warranty expense 8.600 credit estimated warranty payable 8.600
The journal entry to record a semiannual interest payment on a bond payable issued at par:
debits Interest Expense and credits Cash.
treasury stock has a
debit balance, the opposite of other stockholders' equity accounts.
liability
debts that are owed to creditors
expense
decreases in equity that occur in the course of selling goods or services
account
detailed record of all increases and decreases that have occurred in a particular asset, liability, or equity during a period
Journal entry recorded, disclosure recorded, or no action needed: Probable Contingent Liability that can no be estimated
disclosure is recorded
purchase discount
discount that businesses offer to purchasers as an incentive for early payment
company invested 45k in yale co stock. the investment represented 5% of the voting stock of yale co. if yale co stock investment paid dividends, what account is credited
dividend revenue
noncumulative stock
does not pay unpaid or omitted dividends
cumulative stock
entitles investors to missed dividends
common stock
equity
dividends
equity
rent expense
equity
salaries expense
equity
service revenue
equity
net loss
excess of total expenses over total revenues
net income
excess of total revenues over total expenses
available for sale debt investment
fair value
Which of the following is NOT considered to be an advantage of forming a corporation?
government regulation. double taxed?
rent expense is in
income statement
salaries expense is in
income statement
service revenue is in
income statement
revenue
increases in equity that occur in the course of selling goods or services
How does the declaration of a cash dividend affect the accounting equation?
increases to liabilities and a decrease to stockholders' equity
On December 31, 2018 Smart Touch Learning signed a $60,000 note payable. The note will be paid over five years with payments of $12,000 plus 6% interest due on each December 31. Which of the following is true regarding the first payment made on December 31, 2019?
interest expense is 3.600
Wininger Corporation has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 25,000 shares of $1 par value common stock outstanding on December 31, 2017 and December 31, 2018. The board of directors declared and paid a $2,000 dividend in 2017. In 2018, $18,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2018?
$8.000
arrears
involves the omitted dividends on cumulative preferred stock. For example, if a corporation has cumulative preferred stock and due to a shortage of cash decides to omit the dividend on those preferred shares, the preferred dividend is in arrears. The result of having these dividends in arrears is that the owners of the common stock cannot receive a dividend until the preferred stock's dividends in arrears are paid and the preferred stock's current year dividend is also paid. or late payments lol
The calculation to determine the number of outstanding shares of stock is the number of:
issued shares minus number of treasury shares
debit
left side of a t account
accounts payable
liability
chart of accounts
list of all accounts with their account numbers
how does treasury stock affect outstanding stock
maybe nothing. not too sure tho
on a post-closing trial balance? dividends
no
on a post-closing trial balance? interest expense
no
on a post-closing trial balance? rent expense
no
on a post-closing trial balance? service revenue
no
At December 31 year-end, Crain Corporation has an $8,400 note receivable from a customer. Interest of 10%has accrued for 10 months on the note. What will Crain's financial statements report for this situation at December 31
note receivable of 8400 and interest receivable of 700
Failure to record an accrued liability for wages earned by employees causes a company to:
overstate stockholders' equity
A company buys treasury stock for $10 per share. The company later sells the treasury stock for $11 per share. What is the difference between the resale price and the cost of the treasury stock called?
paid-in capital from treasury stock transactions
If a corporation issues 6000 shares of $5 par value common stock for $91,000, the journal entry would include a credit to:
paid-in capital in excess of par - common for $61.000
When a company issues common stock at a price per share greater than its par value per share, the excess should be credited to:
paid-in capital in excess of par-common
debtor
party to a credit transaction who takes on an obligation/payable
creditor
party who receives a receivable and will collect cash in the future
normally used for relatively inexpensive goods
periodic
achieves better control over merchandise inventory
perpetual
keeps a running computerized record of merchandise inventory
perpetual
uses bar codes to keep up to the minute records of inventory
perpetual
requires a physical count of inventory to determine the quantities on hand
perpetual and periodic
The carrying amount of bonds issued at a discount is calculated by:
premium on Bonds Payable is a credit, and it is added to the Bonds Payable account to determine the carrying amount.
ledger
record holding all the accounts of a business, changes in those accounts, and their balances
journal
record of transactions in date order
primary purpose of a stock split
reduce the market price of the stock per share and increase the number of shares
statement of retained earnings
report how the companys ret earnings balance changed from the beg to the end of the period
Accrual Basis Accounting
reporting income when it is earned and expenses when they are incurred
statement of cash flows
reports on a business cash receipts and cash payments during a period
balance sheet
reports on an entitys assets, liabilities, and stockholders equity as of a specific date
income statement
reports on an entitys revenues, expenses, and net income or loss for the period
dividends is in
retained earnings
statement of retained earnings with stocks
retained earnings + net income = a a - dividends - stock dividends declared = new retained earnings
credit
right side of a t account
invoice
sellers request for cash from the purchaser
normal balance
side of an account where increases are recorded
what increases paid-in capital by the same amount that it decreases retained earnings
stock dividend
what has no effect on total stockholders' equity
stock dividend + stock split
stock dividend
stock dividend is the issuance by a company of its common stock to its common shareholders without any consideration. If the company issues less than 25 percent of the total number of previously outstanding shares, then treat the transaction as a stock dividend. To record a stock dividend, transfer from retained earnings to the capital stock and additional paid-in capital accounts an amount equal to the fair value of the additional shares issued.
outstanding stock
stock in the hands of stockholders
An increase in the number of issued and outstanding shares of stock along with a proportional reduction in the stock's par value is a
stock split
in a balance sheet, treasury stock is
subtracted from the total paid-in capital + retained earnings
credit terms
terms of purchase or sale as stated on the invoice
authorized stock
the amount of stock that a corporation is authorized to sell as indicated in its charter
Orlando Corporation incorporated on January 2, 2017. During 2017, Orlando had the following transactions: issued 50,000 shares of common stock at $45 per share. The par value per share is $1. purchased 3,000 shares of treasury stock at $26 per share had net income of $400,000. What is the total amount of stockholders' equity as of December 31, 2017?
(50.000*$45)+400.000-(3000*$26)= 2.572.000
On December 31 st 2018, Stanford Inc received $15,000 cash in exchange for a 3 year, 5% note payable. Each year, they will pay $5,000 in principal plus interest. Prepare an amortization table for the life of the note. Also record the journal entry for the 12/31/18 transaction
(table in emailed study guide) Journal entry: debit cash 15.000 credit note payable 15.000
Bank reconciliation
-company -bank reconciliation -date -Bank: -balance, date -add: deposit in transit -sum the two -less: outstanding checks -subtract that from sum -Book: -balance, date -add: bank collection, interest revenue -less: service charge -adjusted book balance, date
balance sheet
-company name -balance sheet -date -assets -list all assets -total assets -liabilities -list all liabilities -total liabilities -stockholders equity -common stock -ret earn -total stockholders equity -total liabilities + stockholders equity
income statement
-company name -income statement -year ended _____________ -revenues: -list all revenues -total revenues -expenses: -list all expenses -total expenses -net income
statement of retained earnings
-company name -statement of ret earn -year ended ___________ -beginning ret earn -net income for the year -add previous two -dividends -end ret earn (subtract div from sum)
which of the following investments is most likely classified as a held to maturity debt investment
10 year bonds
On November 1, 2017, a company signed a promissory note. The interest and principal are due on July 1, 2018. What accounts relating to the note payable will be reported on the financial statements for the fiscal year ending December 31, 2017?
Short−term notes payable and interest payable will be reported on the balance sheet.
dividend
The portion of corporate profits paid out to stockholders
revenue recognition principle
The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied.
what decreases both total assets and total stockholders' equity
cash dividend
What decreases retained earnings
cash dividend + stock dividend
what has no effect on liability
cash dividend + stock dividend + stock split
separation of duties is important for internal control of
cash payments and cash receipts
which of the following accounts may appear on a post-closing trial balance
cash, salaries payable, and retained earnings
If a corporation has only one class of stock, it is understood to be:
common stock
If a corporation issues 3,000 shares of $1 par value common stock for $10,000, the journal entry would include a credit to:
common stock for $3.000
investment in more than 50% of the investee companys stock
consolidation
Double taxation means that the:
corporation pays taxes on its earnings and the shareholders pay taxes on the dividends received from the corporation.
costs of goods sold
cost of the merchandise inventory that the business has sold to customers
On January 1, Hanley Corporation issued $2,200,000, 10-year, 6% bonds at 102. The journal entry to record this transaction would include a:
credit to Premium on Bonds Payable $44,000.
company owns 25% of the voting stock of pink co. and can exercise significant influence, dividends received will be
credited to equity investments-pink co
If stock is issued for an asset other than cash, the asset should be recorded on the books of the corporation at the:
current market value of the asset
How should you record a capital expenditure
debit an asset
journalize the distribution of the stock dividend
debit common stock dividend distributable credit common stock
distributed the stock dividend
debit common stock dividend distributable credit common stock-$10 par value
Declared a 5% stock dividend on the common stock. The market value of Morrissey's stock was $24 per share.
debit stock dividends credit common stock dividend distributable credit paid-in capital in excess of par-common
journalize the purchase of treasury stock
debit treasury stock credit cash
issued stock
the number of shares sold to investors; includes treasury shares
Amortization
the reduction of a loan balance through payments made over a period of time
Which one of the following is NOT a stockholder's right of ownership in a corporation?
the right to decide if a dividend should be distributed
Mr. Jorgensen, a shareholder in the Best Corporation, owns 9,000 shares of its common stock. Mr. Jorgensen receives a 4% stock dividend. After the stock dividend, Mr. Jorgensen will have a:
total of 9.360 shares of Best corp's common stock
capital stock
total shares of ownership in a corporation
what do closing entries accomplish
transfer revenues, expenses, and dividends to the retained earnings account zero out revenues, expenses, and dividends bring the retained earnings account to its correct ending balance
posting
transferring amounts from the journal to the ledger
Previously issued stock that a corporation purchases from shareholders is called:
treasury stock
wholesaler
type of merchandiser that buys goods form manufacturers and then sells them to retailers
overstating ending inventory causes
understates cogs and overstates net income
investment in 25% of the investee companys stock of which the investor has significant influence
use equity
on a post-closing trial balance? accounts payable
yes
on a post-closing trial balance? accumulated depreciation - furniture
yes
on a post-closing trial balance? office supplies
yes
on a post-closing trial balance? retained earnings
yes
on a post-closing trial balance? unearned revenue
yes
Burkert Company has 50,000 shares of $1 par value common stock issued and outstanding. The company also has 1,000 shares of $100 par value, 6% cumulative preferred stock outstanding. Burkert did not pay the preferred dividends in 2016 and 2017. For the common stockholders to receive a dividend in 2018, the board of directors must declare dividends in excess of:
$18.000
A share of 5% preferred stock has a par value of $60 and market value of $80. The owners of the preferred stock will receive a dividend of:
$3.00 per share
The Good Word Store reported the following figures: Retained Earnings, January 31, 2017............$37,000,000 Retained Earnings, January 31, 2018............$17,000,000 Total Stockholders' Equity, January 31, 2017.............$31,000,000 Total Stockholders' Equity, January 31, 2018.............$27,000,000 The company's fiscal year ends on January 31 each year. Dividends declared for the fiscal year ending January 31, 2018 are $16,000,000. What is the net income or net loss for the fiscal year ending January 31, 2018?
$4.000.000 net loss
Cubs Corporation issues $500,000, 10%, 5-year bonds on Jan 1, 2014 for $479,000. Interest is paid annually on January 1. If Cubs Corporation uses the straight-line method of amortization of bond discount, the amount of interest expense recorded at December 31, 2014 would be
$54,200
Stockholders' equity section of the balance sheet. YIKES
( {}{}{} denotes a line change) Paid-in capital: {}{}{} a. Preferred stock-$7, no-par value; 100k shares authorized, 700 shares issued and outstanding =30.000{}{}{} b. Common stock-$1 par value; 500k shares authorized, 2.050 shares issued/outstanding=2.050 c. Paid-in capital in excess of par-common=25.450 d. Total Paid-in capital=a+b+c=57.500 e. Retained Earnings=net income=40.000 Total stockholders' equity = d+e = 97.500
Purple Bear Inc took out a $120,000 mortgage payable on 12/31/18 to buy a building. The building was also for the full $120,000. Prepare a 4 month amortization schedule for the mortgage. The first month is provided. The Monthly payment will be $750 and the mortgage has a 5% interest. Also record the 12/31/19 transaction.
(table in emailed study guide) debit building 120.000 credit mortgage payable 120.000
Purple Bear Inc took out a $120,000 mortgage payable on 12/31/18 to buy a building. The building was also for the full $120,000. Prepare a 4 month amortization schedule for the mortgage. The first month is provided. The Monthly payment will be $750 and the mortgage has a 5% interest. Also record the first payment on 1/31/19.
(table in emailed study guide) debit note payable 250 debit interest expense 500 credit cash 750
On December 31 st 2018, Stanford Inc received $15,000 cash in exchange for a 3 year, 5% note payable. Each year, they will pay $5,000 in principal plus interest. Prepare an amortization table for the life of the note. Also record the journal entry for the 12/31/19 1st year payment.
(table in emailed study guide) debit note payable 5.000 debit interest expense 750 credit cash 5750
1. Purchased equipment costing $10,000 by issuing a one-year, 6% note payable 2. accrued interest on the note payable 3. paid the note payable plus interest at maturity
1. debit equipment 10.000 credit notes payable 10.000 2. debit interest expense 350 credit interest payable 350 3. debit note payable 10.000 debit interest expense 250 debit interest payable 350 credit cash 10.600
1. Made sales of $22,000. McGinn estimates that warranty expense is 6% of sales 2. Paid $800 to satisfy warranty claims. 3. Estimated vacation benefits expense to be $3,500. 4. McGinn expected to pay its employees a 2% bonus on net income after deducting the bonus. Net income for the year is $60,000.
1. debit warranty expense 1.320 credit warranty liability 1.320 2. debit warranty liability 800 credit cash 800 3. debit vacation benefits expense 3.500 credit vacation benefits payable 3.500 4.
Element Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $20.00 per share. Common Stock, $5.00 par, 324,000 shares authorized, 160,000 shares issued and outstanding $800,000 Paid−In Capital in Excess of Par—Common 137,000 Retained Earnings 305,000 Total Stockholders' Equity $1,242,000. After a 2−for−1 stock split, what is the number of issued shares?
320.000
Mr. Seider, a shareholder in the Greenfield Corporation, owns 5,000 shares of their common stock, which represents 35% of the outstanding common stock of Greenfield Corporation. Mr. Seider receives a 5% stock dividend. After the stock dividend, what is Mr. Seider's ownership in Greenfield Corporation's common stock?
35% ownership
journalize the declaration of the stock dividend
debit stock dividends credit common stock dividend distributable credit paid-in capital in excess of par-common
Lawson Enterprises estimates that it will have to pay $75,000 in warranty repairs next year.
record an expense and a liability based on estimated amounts
ABC Inc has retail sales that are subject to their states sales tax laws. In December of 2019, their only sale was for an item for $15,000 plus 6% state sales tax. The customer paid in cash A) Record the entry on 12/23/2019 for the sale of the item. You may omit the cost of goods entry.
Debit Cash 15900 Credit Sales Revenue 15000 Credit sales tax payable 900
face value (par value)
Sum of money that the corporation promises to pay at the bond's expiration. In most cases it is also the amount that the bondholder gives to the corporation today. Unless otherwise stated, a par value of $1,000 should be assumed.
A(n) _________ schedule details each loan payment's allocation between principal and interest and the beginning and ending loan balances.
amortization
The authority to declare a dividend lies with the:
board of directors
What is one advantage of issuing bonds rather than issuing stock for a company?
bonds do not affect the ownership percentage of the corporation
A company has 600,000 shares issued and outstanding of $1 par common stock. After a 2-for-1 stock split, which of the following statements is FALSE? a. number of shares issued is $1.200.000 b. the par value per share deacreases to $0.50 per share c. the number of shares issued is 300.000 d. the number of shares outstanding is 1.200.000
c. the number of shares issued is 300.000
Zeman, Inc. declares and distributes a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding. If the market value of the common stock is $25, the journal entry to record the stock dividend would include a:
credit paid-in capital in excess of par - common 45.000
At the end of the year, a company makes a journal entry to accrue the interest expense on a short−term note payable. As a result of this transaction:
current liabilities increase and stockholders' equity decreases
Unearned Revenue: In the month of March, Wampus Cat Inc collected $1800 in cash for services to be provided equally over April, May and June of 2019. Each month they performed a third of the services per the agreement a. Record the March 20 th Payment from the client to Wampus Cat Inc
debit cash 1800 credit unearned revenue 1800
Issued 700 shares of preferred stock for cash of 30.000
debit cash 30.000 credit preferred stock - no par value 30.000
On June 30 th , 2019 ABC Inc issued 5,000 shares of common stock with a par value of $1, for $10 a share. Record the journal entry for the issuance of common stock at a premium
debit cash 50.000 credit common stock - $1 par value 5.000 credit paid-in capital in excess of par - common stock 45.000
Issued 250 shares of common stock to the promoters who organized the corporation, receiving cash of $7,500.
debit cash 7.500 credit common stock - $1 par value 250 credit paid-in capital in excess of par value-common stock 7.250
journalize the declaration of the cash dividend
debit cash dividends credit dividends payable -common
Declared a cash dividend
debit cash dividends credit dividends payable-preferred
Oxford Inc has 1,000 outstanding shares of 5%, $25 par value preferred stock. The preferred dividend is 5% of the par value and is stated as such on their stock certificate. In 2019, they declared $50,000 in dividends on all of their stock on December 20 th . Oxford had $1,250 dividend in arrears and their preferred stock was cumulative. Record the December 20 th entry for their dividends.
debit cash dividends 50.000 credit dividends payable - common 47.500 credit dividends payable - preferred 2.500 (2018 dividend in arrears of 1.250 plus 2019 dividends of 1.250. Common stock gets the rest)
Belleview Water Sports has 18,000 shares of $3 par value common stock outstanding. Belleview distributes a 15% stock dividend when the market value of its stock is $20 per share. Journalize the distribution of the stock dividend
debit common stock dividend distributable 8.100 credit common stock -$3 par value 8.100
On November 15 th , 2019 UCA Inc declared a cash dividend of $2 per share on 10,000 shares of common stock. It paid out the dividends on December 1 st . Record the December 1st journal entry.
debit dividends payable -common 20.000 credit cash 20.000
journalize the payment of the cash dividend
debit dividends payable-common credit cash
paid dividend
debit dividends payable-preferred credit cash
warranty claims paid in the amount of 6.400
debit estimated warranty payable 6.400 credit cash 6.400
Income Tax: At the end of the year, its determined ABC Inc will owe $5,000 in Federal Income taxes. a. Record the entry on 12/31/19 for the accrued liability for income tax expense
debit income tax expense 5000 credit income tax payable 5000
Income Tax: At the end of the year, its determined ABC Inc will owe $5,000 in Federal Income taxes. b. Record the entry on 3/15/19 for the payment of taxes with cash
debit income tax payable 5000 credit cash 5000
Issued 1.800 shares of common stock in exchange for land with a market value of 20.000
debit land 20.000 credit common stock - $1 par value 1.800 credit paid-in capital in excess of par - common stock 18.200
James is party to a lawsuit for copyright violation of $160,000. James's attorney advises that it is probable James will lose this lawsuit. The attorney estimates the loss at $160,000.
debit loss from lawsuit 160.000 credit lawsuit payable 160.000
Highflyer Inc received $9,000 worth of merchandise inventory in exchange for a 6 month note payable at 10% on June 15, 2019. The note payable is to be paid equally over the 6 months, plus interest. a. Record the entry on June 15, 2019 when they received the merchandise inventory in exchange for a note payable
debit merchandise inventory 9000 credit note payable 9000
Highflyer Inc received $9,000 worth of merchandise inventory in exchange for a 6 month note payable at 10% on June 15, 2019. The note payable is to be paid equally over the 6 months, plus interest. b. Record the July 15, 2019 entry for the first note payable payment
debit note payable 1500 debit interest expense 75 credit cash 1575
Dolanski Company declares and distributes a 30% common stock dividend when it has 50,000 shares of $10 par common stock outstanding. The market price per share is $30 at the date of declaration. Which journal entry is prepared?
debit retained earnings 150.000 credit common stock 150.000
ABC Inc has retail sales that are subject to their states sales tax laws. In December of 2019, their only sale was for an item for $15,000 plus 6% state sales tax. The customer paid in cash B) Record the entry on 1/20/2020 when they paid the sales tax.
debit sales tax payable 900 credit cash 900
Belleview Water Sports has 18,000 shares of $3 par value common stock outstanding. Belleview distributes a 15% stock dividend when the market value of its stock is $20 per share. Journalize the declaration of the stock dividend
debit stock dividends 54.000 credit common stock dividend distributable 8.100 credit paid-in capital in excess of par - common 45.900
Smith Corporation issues $2,100,000, 10-year, 8% bonds payable at a price of 97. The journal entry to record the issuance will include a:
debit to Cash for $2,037,000.
On January 1, 2016, a bond was issued at a discount. The journal entry to record the semiannual interest payment on July 1, 2016 would include a:
debit to Interest Expense, a credit to Discount on Bonds Payable and a credit to Cash.
On December 30 th , ABC Inc decided to buy back 500 shares of previously issued common stock at $12 per share. Record the purchase of treasury stock.
debit treasury stock - common 6.000 credit cash 6.000
ABC Inc made sales on account of $50,000 on June 10 th . The company estimates their warranty cost will be 5% of sales. On June 30 th , they had an actual warranty cost of $750 they paid in cash a. Record the entry on 6/10 to accrue the warranty expense. Ignore the sales and cogs entry
debit warranty expense 2500 credit warranty claim payable 2500
James estimated warranty expense on sales for the second half of the year of $470,000 at 2%
debit warranty expense 9.400 credit estimated warranty payable 9.400
Gulf Oil Refinery had a gas explosion on one of its oil rigs. Gulf believes it is likely that it will have to pay environmental clean-up costs and damages in the future due to the gas explosion. Gulf cannot estimate the amount of the damages.
describe the situation in a note to the financial statements
Journal entry recorded, disclosure recorded, or no action needed: Reasonably Possible Contingent Liability
disclosure is recorded
Weaver, Inc. is being sued by a former employee. Weaver believes that there is a remote chance that the employee will win. The employee is suing Weaver for damages of $40,000.
do not disclose
Monthly sales are $490,000. Warranty costs are estimated at 6% of monthly sales. Warranties are honored with replacement products. No defective products are returned during the month. At the end of the month, the company should record a journal entry with a credit to:
estimated warranty payable for 29.400
Preferred stockholders
generally have no voting rights, due to their preferred status, which affords them first crack at dividends, before common stockholder are paid
In the first week of 2019, Grace worked 45 hours. She is paid $10 an hour and makes time and a half for any hours worked over 40 in a week. Her Federal income tax withholding is 20%, FICA Social Security tax is 6.2%, FICA Medicare tax is 1.45%, she had $50 of health insurance deducted, and a charitable contribution to United Way or $10. Calculate her gross pay, and show the calculation to arrive at her net(take-home) pay.
gross pay=($10*40)+($15*5)=$475 Income Taxes=$475*.2=$95 Social Security Tax=$475*.062=$29.45 Medicare tax=$475*.0145=$6.89 Health insurance=$50 United Way=$10 Net Pay=$283.66
Declaring and distributing stock dividends:
has no effect on total stockholders' equity
A small stock dividend will:
have no effect on total assets or total stockholders' equity
premium bond
high than the market rate of interest
Journal entry recorded, disclosure recorded, or no action needed: Probable Contingent Liability that can be estimated
journal entry is recorded
A(n) ___________ payable is a long-term debt that is backed with a security interest in specific property.
mortgage
Journal entry recorded, disclosure recorded, or no action needed: Remote Contingent Liability with no value estimated
no action needed
Journal entry recorded, disclosure recorded, or no action needed: Remote Contingent Liability with value estimated
no action needed
What is the overall effect of the stock dividend on Belleview's total assets? total stockholders' equity?
no effect on either
James is party to a patent infringement lawsuit of $220,000. James's attorney is certain it is remote that James will lose this lawsuit.
no entry required
entry for date of record
nothing
A _______ corporation is a corporation whose stock can be purchased on an organized stock exchange.
public
A premium on bonds payable occurs when the issue price of a bond is greater than the face value of the bond.
true
