financial accounting final exam

Mayan Company had net income of $33,120. The weighted-average common shares outstanding were 9,600. The company has no preferred stock. The company's basic earnings per share is:

$3.45.

A company had a beginning balance in retained earnings of $44,200. It had net income of $7,200 and declared and paid cash dividends of $5,925 in the current period. The ending balance in retained earnings equals:

$45,475.

A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of paid-in capital is:

$7000

The following data were reported by a corporation: Authorized shares 40,000 Issued shares 35,000 Treasury shares 13,500 The number of outstanding shares is:

21,500.

The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 14,000 shares authorized, 7,000 shares issued, and 2,600 shares outstanding$ 70,000Paid-in capital in excess of par value, common stock44,000Retained earnings19,000Treasury stock28,080 Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:

4,400.

Treasury stock is classified as:

A contra equity account.

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in:

A note to the statement or a in a separate schedule.

Adonis Corporation issued 10-year, 8% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 7.5%. Adonis received $206,948 in cash proceeds. Which of the following statements is true?

Adonis must pay $200,000 at maturity plus 20 interest payments of $8,000 each.

A disadvantage of bond financing is:

Bonds pay periodic interest and require the repayment of par value at maturity.

When all authorized shares of a corporation's stock have the same rights and characteristics, the stock is called:

Common stock.

A bond sells at a discount when the:

Contract rate is below the market rate.

Bonds that have interest coupons attached to their certificates, which the bondholders present to a bank or broker for collection, are called:

Coupon bonds.

A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is:

Debit Bond Interest Expense $22,000; credit Cash $22,000.

On January 1, a company issues bonds dated January 1 with a par value of $200,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $208,531. The journal entry to record the issuance of the bonds is:

Debit Cash $208,531; credit Premium on Bonds Payable $8,531; credit Bonds Payable $200,000.

On January 1, a company issues bonds dated January 1 with a par value of $360,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $346,096. The journal entry to record the issuance of the bond is:

Debit Cash $346,096; debit Discount on Bonds Payable $13,904; credit Bonds Payable $360,000.

On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $4,500,000. The bonds pay interest semiannually. The market rate of interest is 8.0% and the bond selling price was $4,194,222. The bond issuance should be recorded as:

Debit Cash $4,194,222; debit Discount on Bonds Payable $305,778; credit Bonds Payable $4,500,000.

Fetzer Company declared a $0.35 per share cash dividend. The company has 400,000 shares authorized, 380,000 shares issued, and 16,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Debit Common Dividends Payable $127,400; credit Cash $127,400.

A corporation issued 5,100 shares of $10 par value common stock in exchange for some land with a market value of $72,000. The entry to record this exchange is:

Debit Land $72,000; credit Common Stock $51,000; credit Paid-In Capital in Excess of Par Value, Common Stock $21,000.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 25,000 shares authorized, 12,000 shares issued, and 10,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:

Debit Retained Earnings $5,000; credit Common Dividends Payable $5,000.

When preferred stock is cumulative and the directors either do not declare a dividend to preferred stockholders or declare one that does not cover the total amount of the cumulative dividend, the unpaid dividend amount is called:

Dividends in arrears

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of long-term debt are reported as cash flows from:

Financing activities.

The section in the statement of cash flows for reporting the issuance of common stock for cash is:

Financing activities.

The section in the statement of cash flows for reporting the purchase of equipment for cash is:

Investing activities.

The board of directors of a corporation:

Is responsible for overseeing corporate activities.

Investing activities do not include the:

Issuance of common stock.

A liability for cash dividends is recorded:

On the date of declaration.

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

Operating activities.

Transactions and events that affect net income such as the production and purchase of inventory, the sale of goods and services to customers, and the expenditures to run a business are classified as:

Operating activities.

Stockholders' equity consists of which of the following?

Paid-in (or contributed) capital and retained earnings.

Which of the following items is reported on the statement of cash flows under financing activities?

Payment of a cash dividend.

Which of the following is not a cash flow from investing activities?

Proceeds from collecting accounts receivable that arise from customer sales.

Which one of the following is an example of cash flows from operating activities?

Receipts of cash from sales.

The total amount of cash and other assets that a corporation receives from its stockholders in exchange for its stock is:

Referred to as paid-in capital.

Bonds issued in the names and addresses of their holders are called:

Registered bonds.

Sinking fund bonds:

Require the issuer to set aside assets to pay bonds at maturity.

Changes in retained earnings are commonly reported in the:

Statement of stockholders' equity.

When a bond sells at a premium:

The contract rate is above the market rate.

The carrying value of bonds at maturity always equals:

the par value of the bond.