chapter 12-

On January​ 1, 2019, Burton Sales issued $21,000 in bonds for$29,800. These are eightminus−year bonds with a stated rate of 99​% and pay semiannual interest. Burton Sales uses the straightminus−line method to amortize the bond premium. Immediately after the issue of the​ bonds, the ledger balances are as​ follows: Bonds Payable 21,000 Premium on Bonds Payable 8,800 After the first interest payment on June​ 30, 2019, what is the balance of Premium on Bonds​ Payable? (Round your intermediate answers to the nearest​ dollar.

credit of 8250

​O'Malley, Inc. issued 70,000 shares of common stock in exchange for manufacturing equipment. The equipment has a fair value of $1,230,000. The stock has a par value of $0.01 per share. The journal entry to record this transaction includes a​ ________.

credit to Paidminus−In Capital in Excess of Parlong dash—Common for $ 1 ,229 ,300

Preferred stockholders​ ________.

receive a dividend preference over common stockholders

Connecticut, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance​ sheet: ​Connecticut, Inc. Comparative Balance Sheet December​ 31, 2019 and 2018 2019 2018 Increase​ / ​(Decrease) Cash $22,000 $21,000 $1,000 Accounts Receivable 31,000 37,000 ​(6,000​) Merchandise Inventory 55,000 26,000 29,000 Plant and Equipment 124,000 92,000 32,000 Accumulated Depreciationminus−Plant and Equipment ​(48,000​) ​(44,000​) ​(4,000​) Total Assets $184,000 $132,000 $52,000

$(18,000​)

Arkansas Corp. is preparing its statement of cash flows using the indirect method. It provides the following information about transactions for the​ year: Plant​ assets, netlong dash—beginning ​balance: $110,000 Plant​ assets, netlong dash—ending ​balance: $148,000 Equipment was purchased for $63,000 with cash. Equipment with a net asset value of​ $12,000 was sold for $16,800. Depreciation Expense of $15,000 was recorded during the year. What was the amount of net cash provided by​ (used for) investing​ activities?

$(46,200​)

On January​ 1, 2018, Waller Sales issued $ $19,000 in bonds for $ 15 $15,300. These are eightminus−year bonds with a stated rate of 1111​%, and pay semiannual interest. Waller Sales uses the straightminus−line method to amortize the bond discount. After the second interest payment on December​ 31, 2018, what is the bond carrying​ amount? (Round your intermediate answers to the nearest​ cent, and your final answer to the nearest​ dollar.)

$15,763

Adventure Travel signed a 1111​%, 1010minus−year note for $158,000. The company paid an installment of $2,800 for the first month. After the first​ payment, what is the principal​ balance? (Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.)

$156,648

On July​ 1, 2018, Electrical Services issued $40,000 of 1212​% bonds that mature in five years. The bonds were issued at a​ premium, for a total of $41,800. The bonds pay semiannual interest payments on June 30 and December 31 of each year. On December​ 31, 2018, what is the total amount paid to​ bondholders?

$2,400

The following information is from the December​ 31, 2018 balance sheet of Millner Corporation. Preferred​ Stock, $100 par $550,000 Paidminus−In Capital in Excess of Parlong dash—Preferred 41,000 Common​ Stock, $1 par 270,000 Paidminus−In Capital in Excess of Parlong dash—Common 570,000 Retained Earnings 171,500 Total​ Stockholders' Equity $1,602,500 What was the average issue price of the common stock​ shares? ​(Round your answer to the nearest​ cent.)

$3.11

The following information is from the December​ 31, 2018 balance sheet of Millner Corporation. Preferred​ Stock, $100 par ​$560,000 ​Paid-In Capital in Excess of Parlong dash—Preferred ​43,000 Common​ Stock, $1 par ​190,000 ​Paid-In Capital in Excess of Parlong dash—Common ​510,000 Retained Earnings ​191,500 Total​ Stockholders' Equity ​$1,494,500 ​' What was the average issue price of the common stock​ shares? ​(Round your answer to the nearest​ cent.)

$3.68

On March​ 31, 2018, Water​ Front, Inc. shows the following data on its balance​ sheet: ​Stockholders' Equity Common​ Stock, $1.00 ​Par, 1 1,160,000 shares authorized 210,000 shares​ issued, 190,000 shares outstanding $210,000 Paidminus−In Capital in Excess of Parlong dash—Common ,570,000 Retained Earnings ,760,000 Treasury​ stock,15,000 shares at $38.00 ​ (570,000​) Total​ Stockholder's Equity $6,970,000 Assume that Water Front sells 1,400 shares of treasury stock at $34.00 per share. What is total​ stockholders' equity after this​ transaction?

$7,017,600

​chapter 14 August, Inc. had the following transactions in​ 2018, its first year of​ operations: bullet• Issued 28,000 shares of common stock. The stock has par value of $4.00 per share and was issued at $19.00 per share. bullet• Issued 1,100 shares of $130.00 par value preferred stock at par. bullet• Earned net income of $36,000. bullet• Paid no dividends. At the end of​ 2018, what is total​ stockholders' equity?

$711,000

The face value is $ 84 comma 000$84,000​, the stated rate is 1010​%, and the term of the bond is eight years. The bond pays interest semiannually. At the time of​ issue, the market rate is 88​%. What is the present value of the bond at the issue​ date? Present value of​ $1: ​4% ​5% ​6% ​7% ​8% 15 0.555 0.481 0.417 0.362 0.315 16 0.534 0.458 0.394 0.339 0.292 17 0.513 0.436 0.371 0.317 0.270 18 0.494 0.416 0.350 0.296 0.250 19 0.475 0.396 0.331 0.277 0.232

$93,794

Outdoor Lighting Supply expects the following for​ 2018: Net cash provided by operating activities of $280,000 Net cash provided by financing activities of $63,000 Net cash provided by investing activities of $79,000 Cash dividends paid to stockholders of $20,000 Outdoor expects to spend $154,000 to modernize its showroom. How much free cash flow does Outdoor expect for​ 2018?

106,000

Healthy​ Farmer, Inc. has 43,000 shares of common stock outstanding and 10,000 shares of preferred stock outstanding. The common stock is $0.10 par​ value; the preferred stock is 44​% noncumulative with a $100.00 par value. On October​ 15, 2019, the company declares a total dividend payment of $53,000. What is the total amount of dividends that will be paid to the common​ stockholders?

13,000

Daniel Corporation had net income for 2018 of $74,000. Daniel had 14,000 shares of common stock outstanding at the beginning of the year and 18,000 shares of common stock outstanding at the end of the year. There were 11,000 shares of preferred stock outstanding all year. During​ 2018, Daniel declared and paid preferred dividends of $25,000. On December​ 31, 2018, the market price of​ Daniel's common stock is $42.00 per share and the market price of its preferred stock is $69.00 per share. What is​ Daniel's price/earnings ratio at December​ 31, 2018? ​(Round any intermediate calculations and your final answer to the nearest cent​.)

13.73

On November​ 1, 2018, Cleveland Services issued $ 306,000 of fiveminus−year bonds with a stated rate of 1515​%. The bonds were issued at​ par, and Cleveland makes semiannual payments on April 30 and October 31. On December​ 31, 2018, Cleveland made an adjusting entry to accrue interest at yearminus−end. No further entries were made until April​ 30, 2019, when the first payment was made. What amount of interest expense was recorded for the period of January 1 to April​ 30, 2019?​ (Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.)

15,300

New Orleans Chemicals Company follows the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance​ sheet: New Orleans Chemicals Company Comparative Balance Sheet December​ 31, 2018 and 2017 2018 2017 ​Increase/ ​(Decrease) Common Stock $30,000 $2,300 $27,700 Retained Earnings 158,000 91,000 67,000 Treasury Stock ​(8,400​) ​(5,500​) ​(2,900​) Total Equity $179,600 $87,800 $91,800

22,000

Scotland Corporation had net income for 2018 of 77,000. Scotland had 6,000 shares of common stock outstanding at the beginning of the year and 28,000 shares of common stock outstanding at the end of the year. There were 11,000 shares of preferred stock outstanding all year. During​ 2018, Scotland declared and paid preferred dividends of $22,000. What is​ Scotland's earnings per​ share? (Round the answer to two decimal​ places.)

3.24

chapter 12 Alden Corp. has the following balances as of December​ 31, 2019: Total Assets $ 93 ,000$93,000 Total Liabilities 73,000 73,000 Total Equity 20,000 20,000 Calculate the debt to equity ratio.​ (Round your answer to two decimal​ points.)

3.65

Refer to the following list of liability balances at December​ 31, 2018. Accounts Payable ​$22,000 Employee Health Insurance Payable ​1,450 Employee Income Tax Payable 400 Estimated Warranty Payable​ (Due 2019) ​1,200 Longminus−Term Notes Payable​ (Due 2022) ​37,000 FICAlong dash—OASDI Taxes Payable ​1,560 Sales Tax Payable ​1,270 Mortgage Payable​ (Due 2023) ​7,000 Bonds Payable​ (Due 2024) ​53,000 Current Portion of​ Long-Term Notes Payable ​7,500 What is the total amount of current​ liabilities?

35,380

The 2019 balance sheet for Standard Electronics reported the following items long dash— with 2018 figures given for​ comparison: Standard Electronics Balance Sheet As of December​ 31, 2019 Standard Electronics Balance Sheet As of December​ 31, 2018 Total Assets $570,000 $484,000 Total Liabilities 322,000 275,000 Total​ Stockholders' Equity​ (all common) 248,000 209,000 Total Liabilities and ​Stockholders' Equity $570,000 $484,000 Net income for 2019 was $18,000. Compute the rate of return on common​ stockholders' equity for 2019.​ (Round your final answer to two decimal​ places.)

7.88

Refer to the following list of liability balances at December​ 31, 2019. Accounts Payable $24,000 Employee Health Insurance Payable 1,350 Employee Income Tax Payable 400 Estimated Warranty Payable​ (Due 2020) 900900 Longminus−Term Notes Payable​ (Due 2022) 33,000 FICAlong dash—OASDI Taxes Payable 1,560 Sales Tax Payable 370370 Mortgage Payable​ (Due 2023) 9,000 Bonds Payable​ (Due 2024) 57,000 Current Portion of Longminus−Term Notes Payable 5,500 What is the total amount of longminus−term ​liabilities?

99,000

Which of the following statements is​ true?

Appropriations of retained earnings require journal​ entries, but restrictions on retained earnings are usually reported in notes to the financial statements.

On March​ 1, 2018, Lewis Services issued a 88​% longminus−term notes payable for $ 18 comma 000$18,000. It is payable over a 33minus−year term in $ 6 comma 000$6,000 principal installments on March 1 of each​ year, beginning March​ 1, 2019. Which of the following entries needs to be made on March​ 1, 2018?

Cash 18,000 Notes Payable 18,000

Why would a corporation issue bonds payable instead of issuing​ stock?

Debt is a less expensive source of capital than stock.

On January​ 1, 2019, Agree Company issued $73,000 of fiveminus−​year, 88​% bonds when the market interest rate was 1212​%. The issue price of the bonds was 1$68,401. Agree uses the effectiveminus−interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. Which of the following is the correct journal entry to record the first interest​ payment? (Round all amounts to the nearest whole​ dollar.)

Interest Expense 44,104 Discount on Bonds Payable 1,184 Cash 2,920

Which of the following is true of the statement of cash​ flows?

It covers a span of time and is dated the same as the income statement.

chapter 13 Which of the following is true of the Premium on Bonds Payable​ account? (The bonds are due in ten​ years.)

It is added to the Bonds Payable balance and shown with​ long-term liabilities on the balance sheet.

Which of the following statements accurately describes the statement of cash​ flows?

It is the link between the​ accrual-based income statement and the cash reported on the balance sheet.

Which of the following describes the operating activities section of the statement of cash​ flows?

It reports on activities that create revenue or expenses for the​ entity's business.

chapter 13 Which of the following is true of a stock split and a stock​ dividend?

Neither a stock split nor a stock dividend will increase total​ stockholders' equity.

Arkansas Company is preparing its statement of cash flows using the indirect method. Refer to the following​ information: 1. Repayments on Longminus−term Notes Payable $63,000 2. New borrowing on Longminus−term Notes Payable $23,000 Which of the following statements is​ correct?

Net cash used for financing activities is ​$(40,000​).

A company originally issued 12,000 shares of $ $8.00 par value common stock at $19.00 per share. The board of directors declares a 88​% stock dividend when the market price of the stock is $22.00 a share. Which of the following is included in the entry to record the declaration of a stock​ dividend?

Stock Dividends is debited for $21,120.

Refer to the following information for Tolan​ Corporation: bullet• Common​ Stock, $ 1.00$1.00 ​par,110,000 shares​ issued,96,000 shares outstanding bullet• Paidminus−In Capital in Excess of Parlong dash—​Common: $2,350,000 bullet• Retained​ Earnings:$990,000 bullet• Treasury​ Stock: 14,000 shares purchased at $20.00 per share If Tolan resold 2,000 shares of treasury stock for $15.50 per​ share, which of the following statements would be​ true?

The Treasury Stock account would decrease by $40,000

Which of the following statements is true of a bond that is issued at a​ discount?

The bond will be issued for an amount less than the face value.

Illinois Woodworking Company is preparing its statement of cash flows using the indirect method. During the​ year, Illinois Woodworking sold equipment for $6,990 cash. The net book value of the asset was $4,770. Which of the following statements is​ true?

The cash receipt of $6,990 is shown as a positive cash flow in the investing activities section.

Atlantis Corporation has 17,000 shares of 1313​%, $80.00 par noncumulative preferred stock outstanding and 24,000 shares of nominus−par common stock outstanding. At the end of the current​ year, the corporation declares a dividend of $200,000. How is the dividend allocated between preferred and common​ stockholders?

The dividend is allocated $176,800 to preferred stockholders and $23,200 to common stockholders.

Which of the following occurs when the board of directors declares a 33−for−1 stock split on 12,000 outstanding shares of $24.00 par common​ stock?

The number of outstanding shares increases to 36,000.

A corporation originally issued $8.00 par value common stock for $13.00 per share. It purchased the stock for $18.00 per share. Which of the following is included in the entry to record the sale of 4040 shares of treasury stock for $19.00 per​ share?

Treasury Stocklong dash—Common is credited for $720.

Land Corporation reported the​ following: Common​ Stock, $5.00 ​par, 204,000 shares​ authorized,180,000 shares issued $900,000 Paid in Capital in Excess of Parlong dash—Common 217,000 Retained Earnings 219,000 Total​ Stockholders' Equity $1,336,000 Which of the following is included in the entry to record the​ corporation's purchase of 40,000 shares of its common stock for $15.50 per​ share?

Treasury Stocklong dash—Common is debited for $620,000.

Which of the following describes a serial​ bond?

a bond that matures in installments at regular intervals

The activities that are included in the operating activities section of the statement of cash flows are​ ________.

activities that create revenue or expenses

Outstanding stock represents shares of stock that​ ________.

are held by the stockholders

Colorado Company uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance​ sheet: Colorado Company Comparative Balance Sheet December​ 31, 2019 and 2018 2019 2018 ​Increase/(Decrease) Accounts Payable ​$4,000 ​$6,000 ​$(2,000) Accrued Liabilities ​2,000 ​1,000 ​1,000 ​Long-term Notes Payable ​84,000 ​90,000 ​(6,000) Total Liabilities ​$90,000 ​$97,000 ​$(7,000) How will the change in Accrued Liabilities be shown on the statement of cash​ flows?

as an addition to Net Income

Great Lake Glassware Company issues $1,114,000 of its 1111​%, 10minus−year bonds at 9999 on February​ 28, 2018. The bonds pay interest on February 28 and August 31. Assume that Great Lake uses the straightminus−line method for amortization. The journal entry to record the first interest payment on August​ 31, 2018 includes a​ ________.

debit to Interest Expense for $61,827

The distribution of a stock dividend​ ________.

effects only​ stockholder's equity accounts

Trinity Coatings Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for​ 2018: The beginning balance in the Cash account was $2,900. Net cash provided by operating​ activities: $39,000 Net cash used for investing​ activities: ​$(26,000​) Net cash provided by financing​ activities: $1,400 The statement of cash flows will show​ ________.

ending cash of $17,300

Investors who want to know the amount of cash a company has available for new​ opportunities, such as expanding into a new sales​ region, should analyze the​ company's ________.

free cash flow

in preparing a statement of cash flows using the indirect​ method, the Depreciation Expense​ ________.

is added back as an adjustment to Net Income in the operating activities section

The debt to equity ratio of four companies is given below. Debt to equity ratio ​Lewis, Inc. 1.30 ​Jackson, Inc. 1.50 Jones Corp. 0.88 Roberts Corp. 0.92 Which of the following companies has the greatest financial​ risk?

jackson

Which of the following will be shown under the investing activities section of the statement of cash​ flows?

loaned money to a third party

On July​ 1, 2019, Montana Company has bonds with balances as shown below. Bonds Payable 71 ,000 Discount on Bonds Payable 3,300 If the company retires the bonds for $ 73, 150, what will be the effect on the income​ statement?

loss on retirement of $ 5,450

Wisconsin, Inc. owed one of its creditors​ $350,000, but it did not have enough cash to repay the debt. Following lengthy​ negotiations, the parties agreed that​ Wisconsin, Inc. would issue​ 50,000 shares of common stock to settle the debt. On the statement of cash​ flows, this transaction is shown in the​ ________.

non-cash investing and financing activities section

Which of the following is a cash outflow for a financing activity on the statement of cash​ flows?

payment of dividends

On December​ 1, 2018, Garden Products borrowed $91,000 on a 66​%, 1616minus−year note with annual installment payments of $5,688 plus interest due on December 1 of each subsequent year. Which of the following describes the first installment payment made on December​ 1, 2019?​ (Round your answer to the nearest whole​ number.)

principal plus $5,460 interest

Which of the following transactions would be shown in the​ non-cash investing and financing activities section of the statement of cash​ flows?

purchased a building in exchange for​ 20,000 shares of common stock

Which of the following transactions would be shown in the​ non-cash investing and financing activities section of the statement of cash​ flows?

purchased land by signing a​ 10-year note for​ $500,000

When bonds are retired at maturity​ ________.

the carrying value always equals the face value

The purchase of equipment financed by a​ long-term notes payable is an example of​ ________.

​non-cash investing and financing activity