ACCT 202 Bundy Final

ABC Corporation issues 1,000 shares of $10 par value common stock at $12 per share. In recording the transaction, CREDIT are made to:

Common Stock $10,000 and Paid-in Capital in Excess of Par $2,000.

Which of the following is not reported under additional paid-in-capital ?

Common stock

Which of the following is not a manufacturing cost category?

Cost of goods sold

Which of the following is not an internal user?

Creditor

Foley Manufacturing Corporation purchased 3,000 shares of its own previously issued $10 par common stock for $69,000. As a result of this event,

Foley's total stockholders' equity decreased $69,000. A treasury stock acquisition decreases assets and stockholders' equity by the cost of the treasury stock, in this case $69,000.

Which of the following is not a major advantage of a corporate form of organization?

Government regulations

Which of the following statements is true about managerial accounting?

It provides more detailed information than financial accounting does.

Which of the following statements about small stock dividends is true?

Market price per share should be assigned to the dividend shares

The costs fo bringing a corporation into existence including legal fees, promotor fees and amounts paid to the state are called:

Organizational Costs

Which of the following statements is false?

Par value and market price of a company's stock are always the same

Which one of the following is not an ownership right of a stockholder in a corporation?

To declare dividends on the common stock

In the stockholders' equity section, the cost of treasury stock is deducted from

Total paid-in capital and retained earnings.

Inc. sells 100 shares of $5 par value treasury stock at $13 per share. If the cost of acquiring the shares was $10 per share, the entry for the sale should include CREDITS to:

Treasury stock $1000 and Paid in Capital from Treasury Stock $300

A corporation reacquired 600 shares of its $10 par value common stock in February for $35,000 cash. The journal entry to record this transaction would include

a debit to Treasury Stock for $35,000

A major disadvantage of a corporation is

additional taxes

Costs incurred in the formation of a corporation

are expensed as incurred

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

corporation is subject to more federal and state government regulations.

Entries for cash dividends are required on the:

declaration date and payment date

The date a cash dividend becomes a binding legal obligation to a corporation is the

declaration date.

The wages of a janitor in the factory would be classified as

indirect labor.

Abbot Corporation splits its common stock 4 for 1 when the market price is $40 per share. Prior to the split, Abbott had 50,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock

is reduced to $2.50 per share. The par value will decrease to 25% of the original par, 25% of $10 = $2.50.

A corporation's legal capital can be defined as the total par value of the shares

issued

In the stockholders' equity section of the balance sheet, common stock is

part of paid-in-capital

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

the corporation.

The ledger of JFK, Inc. shows common stock, common treasury stock, and no preferred stock. For this company, the formula for computing book value per share is:

total stockholders equity / number of shares of common stock outstanding

Preferred stock may have priority over common stock except in :

voting

In the stockholders equity section of the balance sheet, the cost of treasury stock is DEDUCTED from:

A total paid in capital and retained earnings

M-Bot Corporation has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2023. No dividends were declared in 2021 or 2022. If M-Bot wants to pay $375,000 of dividends in 2023, common stockholders will receive

$135,000. he preferred stockholders will receive a total of $240,000 of dividends [Dividends in arrears ($80,000 X 2 years) + current-year dividends ($80,000)]. If M-Bot wants to pay a total of $375,000 in 2023, then common stockholders will receive $135,000 (375,000 - $240,000). First, preferred stockholders receive dividends, and then common stockholders follow. *10,000 x $100 x .08 = $80,000.

Encore Inc. declared an $80,000 cash dividend. It currently has 3,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash dividends will Encore distribute to the common stockholders?

$38,000 The preferred stockholders will receive a total of $42,000 in dividends (3,000 x .07 x $100 x 2 years). The common stockholders will receive $38,000 ($80,000 - $42,000)

A corporation issued 400 shares of $10 par value common stock in payment of a $4,500 bill from its attorneys for assistance in filling the initial charter for the corporation. The entry to record this transaction will include

$4,000 credit to common stock

Orlando Company has a beginning balance in retained earnings of $100,000. During the year, it had a net loss of $20,000, declared cash dividends of $3,000, and declared a small stock dividend that had a market value of $7,000 and a par value of $1,000. The ending balance in retained earnings is:

$70,000 100,000 - 20,000 - 3000 - 7000 = 70,000

On January 1, Bennett Corporation had retained earnings of $650,000. During the year, Bennett Corporation had the following selected transactions: declared cash dividends of $100,000; earned net income of $400,000; and declared stock dividends of $100,000. The ending balance for retained earnings at December 31 is

$850,000. Retained earnings balance, January 1 $650,000 + Net income earned during year 400,000 - Cash dividends declared (100,000) - Stock dividends declared(100,000) = Retained earnings balance, December 31 $850,000

A-Team Corporation issued 1,000 shares of $5 par value stock for land. The stock is actively traded at $9 per share. The land was advertised for sale at $10,500. The land should be recorded at

$9,000. The most clearly determinable value in this noncash transaction is the fair value of the consideration given up of $9,000 ($9 per share X 1,000).

(A) Direct materials used. $290000 Direct labor. 210000 Manufacturing overhead. 315000 Operating expenses. 323000 (B) Beginning WIP inventory. $30000 Ending WIP inventory. 15000 Beginning FG inventory. 38000 Ending FG inventory. 23000 (A) Total Manufacturing Costs (B) Cost of goods manufactured

(A) 815,000 (B). 830,000 $290000 + $210000 + $315000 = $815000; $30000 + $815000 - $15000 = $830000 (Direct materials + Direct labor + Manufacturing overhead = Total manufacturing costs; Beginning work in process inventory + Total manufacturing costs - Ending work in process inventory = Cost of goods manufactured)

Return on common stockholders' equity

(net income - preferred dividends) / average common stockholders' equity

Sandhill Company's accounting records reflect the following inventories: Dec. 31, 2022. Dec. 31, 2021 RM Inventory $270000 $220000 WIP inventory 300000 160000 FG inventory. 180000 140000 During 2022, $760000 of raw materials were purchased, direct labor costs amounted to $670000, and manufacturing overhead incurred was $640000. (Assume that all raw materials used were direct materials.) If Sandhill Company's cost of goods manufactured for 2022 amounted to $1890000, its cost of goods sold for the year is

1,850,000 $140000 + $1890000 - $180000 = $1850000 (Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory = Cost of goods sold)

Sunland Company's accounting records reflect the following inventories: Dec. 31, 2022. Dec. 31, 2021 RM Inventory $230000 $180000 WIP Inventory 300000 160000 FG Inventory. 190000 150000 During 2022, $720000 of raw materials were purchased, direct labor costs amounted to $670000, and manufacturing overhead incurred was $640000. (Assume that all raw materials used were direct materials.) Sunland Company's total manufacturing costs incurred in 2022 amounted to

1,980,000 $180000 + $720000 - $230000 = $670000; $670000 + $670000 + $640000 = $1980000 (Beginning raw materials inventory + Purchases - Ending raw materials inventory = Raw materials used; Raw materials used + Direct labor + Manufacturing overhead incurred = Total manufacturing costs)

Wildhorse Company reported total manufacturing costs of $350000, manufacturing overhead totaling $55000, and direct materials totaling $67000. What is the company's direct labor cost?

228,000 $350000 - $67000 - $55000 = $228000(Total manufacturing costs - Direct materials - Manufacturing overhead = Direct labor cost)

Blossom Company's accounting records reflect the following inventories: Dec. 31, 2022 Dec. 31, 2021 RM Inventory $210000 $160000 WIP Inventory 300000 160000 FG inventory. 190000. 150000 During 2022, $700000 of raw materials were purchased, direct labor costs amounted to $670000, and manufacturing overhead incurred was $640000. (Assume that all raw materials used were direct materials.) The total raw materials available for use during 2022 for Blossom Company is

860,000 $160000 + $700000 = $860000 (Beginning raw materials inventory + Purchases = Raw materials available)

Jackson Inc. reported net income of $186,000 during 2022 and paid dividends of $26,000 on common stock. It also has 10,000 shares of 6%, $100 par value, noncumulative preferred stock outstanding and paid dividends of $60,000 on preferred stock. Common stockholders' equity was $1,200,000 on January 1, 2022, and $1,600,000 on December 31, 2022. The company's return on common stockholders' equity for 2022 is:

9.0%

Beginning WIP inventory $25000 Beginning RM inventory. 8000 Ending WIP inventory. 28000 Ending RM inventory 5000 RM purchased. 560000 Direct labor 210000 Manufacturing OH 120000 How much is Crane's total cost of work in process for the year?

918,000 $8000 + $560000 - $5000 = $563000; $25000 + $563000 + $210000 + $120000 = $918000 (Beginning raw materials inventory + Purchases - Ending raw materials inventory = Raw materials used; Beginning work in process inventory + Raw materials used + Direct labor + Manufacturing overhead incurred = Total cost of work in process)

Which of the following is true regarding corporations

A corporation is separate legal entity that may sue and be sued as if it were a person