acct test 4
The purchase of $123,000 of equipment by issuing a note would be reported:
in a supplementary schedule
Depreciation expense is $20,200 and the beginning and ending accumulated depreciation balances are $150,100 and $155,100, respectively. What is the cash paid for depreciation?
$0 When initially recording depreciation, we increase Depreciation Expense (with a debit) and inc
A company sells 1 million shares of common stock with no par value for $17.00 a share. In recording the transaction, it would debit:
Cash and credit Common Stock for $17.00 million
Company X has net sales revenue of $800,000, cost of goods sold of $343,600, and all other expenses of $327,800. The net profit margin is closest to:
0.16 Sales - Cost of goods sold - Operating expenses = Net income = $800,000 - $343,600 - $327,800 = $128,600 Net profit margin = (Net income ÷ Revenues) × 100 = $128,600 ÷ $800,000 = 16%
A corporate charter specifies that the company may sell up to 26 million shares of stock. The company issues 18 million shares to investors and later repurchases 6.0 million shares. The number of issued shares after these transactions have been accounted for is:
18 million shares.
Vesuvius Company has net sales revenue of $796,000, cost of goods sold of $351,200,net income of $211,200, and preferred dividends of $18,000 during the current year. At the beginning of the year, 471,000 shares of common stock were outstanding, and, at the end of the year, 553,000 shares of common stock were outstanding.A total of 9,000 preferred shares were outstanding throughout the year. The company's earnings per share for the current year is closest to:
$0.38. Earnings per share (EPS) = (Net income - Preferred dividends) ÷ Average number of common shares outstanding = ($211,200 - $18,000) ÷ [(471,000 + 553,000) ÷ 2] = $0.38
A company reported net income of $7.5075 million. At the beginning of the year, 3.75 million shares of common stock were outstanding and at the end of the year, 3.95 million shares were outstanding. No dividends were declared. The EPS is approximately:
$1.95 EPS = (Net income - Preferred dividends) ÷ Average number of common shares outstanding = ($7,507,500 - $0) ÷ 3,850,000 shares = $1.95 per share
A company issued 1,450 shares of $67 par value stock for $108,750. What is the total amount of contributed capital?
$108,750 Contributed capital is the amount of capital the company received from investors' contributions, in exchange for the company's common stock and preferred stock. This corporation has $108,750 of contributed capital.
A company issues 1 million shares of common stock with a par value of $0.05 for $15.30 a share. The entry to record this transaction includes a debit to Cash for:
$15,300,000, a credit to Common Stock for $50,000, and a credit to Additional Paid-in Capital for $15,250,000.
A company issues 1.01 million shares of preferred stock with a par value of $2.50 at its market price of $26.50 per share. The issuance should be recorded with a debit to Cash for:
$26.77 million, a credit to Preferred Stock for $2.53 million, and a credit to Additional Paid-in Capital for $24.24 million.
Chino Company reported net income of $26,500 for the current year. During the year, Inventory decreased by $8,200, Accounts Payable decreased by $8,600, Depreciation Expense was $11,200, and Accounts Receivable incr
$29,600.
What is the cash balance at the beginning of the year?
$4,400 Beginning Cash Balance = Ending Cash Balance - Cash Flows from Operating Activities - Cash Flows from Investing Activities - Cash Flows from Financing Activities = $17,100 - $17,700 - $5,800 + $10,800 = $4,400
A piece of equipment with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a cash inflow from investing activities is:
$50,000
A company issues 111,000 shares of preferred stock for $41 a share. The stock has fixed annual dividend rate of 6% and a par value of $12 per share. If sufficient dividends are declared, preferred stockholders can anticipate receiving dividends of:
$79,920 each year. Preferred dividend = Number of shares outstanding × Par value × Annual dividend rate = 111,000 shares × $12 per share × 0.06 = $79,920 (if declared)
hat is the amount of net cash provided by (used in) financing activities?
($18,400)
A company reported that its bonds with a face value of $86,000 and a carrying value of $62,000 are retired for $74,000 cash. The amount to be reported under cash flows from financing activities is:
($74,000)
A corporate charter specifies that the company may sell up to 25 million shares of stock. The company sells 17 million shares to investors and later buys back 5.5 million shares. The current number of outstanding shares after these transactions have been accounted for is:
11.5 million shares. Outstanding shares are issued shares that are currently held by stockholders and not the corporation itself. This corporation has 11.5 million shares outstanding (or 17 million shares issued - 5.5 million shares of treasury stock).
The following information is taken from the financial statements of Lopez Company. :The company's times interest earned ratio is closest to:
17.4.
A company has earnings per share of $2.60, it paid a dividend of $1.90 per share, and the market price of the company's stock is $59 per share. The price/earnings ratio is closest to:
22.69. P/E ratio = Market price per share/EPS = $59/$2.60 = 22.69
Company X has net sales revenue of $1,320,000, cost of goods sold of $760,700, and all other expenses of $297,000. The beginning balance of stockholders' equity is $407,000 and the beginning balance of fixed assets is $368,000. The ending balance of stockholders' equity is $607,000 and the ending balance of fixed assets is $396,000. The fixed asset turnover ratio is closest to:
3.46 Fixed asset turnover = Net revenue ÷ Average net fixed assets = $1,320,000 ÷ [($368,000 + $396,000) ÷ 2] = 3.46
A corporate charter specifies that the company may sell up to 39 million shares of stock. The company sells 31 million shares to investors and later buys back 12.5 million shares. The number of authorized shares after these transactions are accounted for is:
39 million shares.
Melrose Inc. buys back 317,000 shares of its stock from investors at $15.00 a share. Two years later, it reissues this stock for $14.50 a share. The stock reissue would be recorded with a debit to Cash for:
4,596,500 million, a debit to Additional Paid-in Capital for $158,500, and a credit to Treasury Stock for $4,755,000 million.
A company issues 103,000 shares of preferred stock for $43 per share. The stock has a fixed dividend rate of 8% and a par value of $6 per share. The company records the issuance with a debit to Cash for:
4.43 million, a credit to Preferred Stock for $618,000, and a credit to Additional Paid-in Capital for 3.81 million.
Company X has net sales revenue of $476,000, cost of goods sold of $347,000, and net income of $37,000. If interest expense is $10,200 and income tax expense is $1,200, the times interest earned ratio is closest to:
4.70 Times interest earned = (Net income + Interest expense + Income tax) ÷ Interest expense = ($37,000 + $10,200 + $1,200) ÷ $10,200 = 4.70
Company X has net sales revenue of $800,000, cost of goods sold of $343,600, and all other expenses of $327,800. The gross profit percentage is closest to: 37%
57% Gross profit percentage = [(Net Sales - Cost of Goods Sold)÷Net Sales] × 100 = [($800,000 - $343,600)÷$800,000] × 100 = 57%
A company had 700,000 shares of $10 par value common stock outstanding. The amount of additional paid-in capital is $3,500,000, and Retained Earnings is $1,050,000. The company issues a 2-for-1 stock split. The market price of the stock is $13. What is the balance in the Common Stock account after this issuance?
7,000,000 Stock splits involve a decrease in the par value per share offset by an increase in the number of shares outstanding. Before the stock split, the company has 700,000 shares of $10 par value stock which is $7,000,000. After the stock split, the company has 1,400,000 shares of $5 par value common stock which is still $7,000,000.
A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year. Sales revenue is $986,400, cost of goods sold is $572,700, and net income is $124,200 for the year. The inventory turnover ratio is closest to:
8.3 = Cost of goods sold ÷ Average Inventory = $572,700 ÷ [($72,500 + $65,500) ÷ 2] = 8.3
The net cash flow provided by operating activities is an inflow of $49,042, the net cash flow used in investing activities is $22,831, and the net cash flow used in financing activities is $28,797. If the beginning cash account balance is $12,483, what is the ending cash account balance?
9,897 Ending Cash Balance = Beginning Cash Balance + Cash Inflows (Outflows) from Operating Activities + Cash Inflows (Outflows) from Investing Activities + Cash Inflows (Outflows) from Financing Activities = $12,483 + $49,042 + ($22,831) + ($28,797) = $9,897
A corporate charter specifies that the company may issue up to 33 million shares of stock. The company sells 25 million shares to investors and later buys back 9.5 million shares. The current number of shares of treasury stock after these transactions have been accounted for is:
9.5 million shares.
A share of stock sells for $35. The company has $79 million in earnings and 215 million outstanding shares. The Price/Earnings ratio for the company is closest to:
95.3 Earnings per share (EPS) = (Net income - Preferred dividends) ÷ Average number of common shares outstanding = ($79,000,000 - $0) ÷ 215,000,000 = $0.37 Price/Earnings ratio = Stock price ÷ EPS = $35.00 ÷ $0.37 = 95.3
A company purchases a $329,800 building, paying $228,000 in cash and signing a $101,800 promissory note. What will be reported on the statement of cash flows as a result of this transaction?
A $228,000 cash outflow from investing activities and a $101,800 noncash transaction.
A company declared a $0.75 per share cash dividend. The company has 240,000 shares authorized, 73,000 shares issued, and 70,000 shares of common stock outstanding. What is the journal entry to record the dividend declaration?
Debit Dividends and credit Dividends Payable for $52,500 The journal entry to record the dividend declaration includes a debit to Dividends and credit Dividends Payable for $52,500 (or 70,000 shares outstanding × dividend rate of $0.75 per share).
Anthem Inc. issues 200,000 shares of stock with a par value of $0.09 for $158 per share. Three years later, it repurchases these shares for $88 per share. Anthem records the repurchase in which of the following ways?
Debit Treasury Stock for $17.60 million and credit Cash for $17.60 million. The repurchase of stock is recorded with a debit to Treasury Stock and a credit to Cash for $17,600,000 (or 200,000 shares × cost of $88 per share).
On February 16, a company declares a 41¢ dividend to be paid on April 5. There are 2,070,000 shares of common stock issued and outstanding. The entry recorded by the company on February 16 includes a debit to:
Dividends and a credit to Dividends Payable for $848,700
Fronthouse Corp. issues 29,000 shares of no-par value preferred stock for cash at $69.50 per share. The journal entry to record the transaction will consist of a debit to Cash for $2,015,500 and a credit (or credits) to:
Preferred Stock for $2,015,500.
A company has outstanding 12.50 million shares of $4.50 par common stock and 1.5 million shares of $4.50 par preferred stock. The preferred stock has an 9% dividend rate. The company declares $350,000 in total dividends for the year. Which of the following is correct if the preferred stockholders only have a current dividend preference?
Preferred stockholders will receive the entire $350,000, but will receive nothing more relating to this dividend declaration. Common stockholders will receive nothing.
During the current accounting period, revenue from credit sales is $761,000. The accounts receivable balance is $52,380 at the beginning of the period and $61,200 at the end of the period. Which of the following statements is correct?
The receivables turnover ratio is 13.4. Receivables turnover ratio = Net sales revenue ÷ Average net receivables = $761,000 ÷ [($52,380 + $61,200) ÷ 2] = 13.4 Days to collect = 365 ÷ 27.2 = 13.4
GE buys back 302,000 shares of its stock from investors at $47 a share. Two years later it reissues this stock for $67 a share. The stock reissue would be recorded with a debit to Cash for:
a debit to Cash of $20.23 million, a credit to Treasury Stock of $14.19 million, and a credit to Additional Paid-in Capital of $6.04 million.
Two years ago, your company bought $42,000 in bonds from another company. This month, it sold half of those bonds for $20,940 and purchased the common stock of another company for $1,150. On the statement of cash flows for this accounting period, your company would report a net cash:
inflow of $19,790 from investing activities. $20,940 - $1,150 = $19,790
Several years ago, Doran Corp. issued 100,000 of its $2 par value stock for a total of $800,000. This is the only time that it has sold stock. This year it purchased 1,000 shares of its own stock for $10 a share. As a result of acquiring treasury stock:
its stockholders' equity decreases by $10,000.
