Account 9

If Bramble Corp. issues 7000 shares of $10 par value common stock for $410000, the account

Paid-in Capital in Excess of Par Value will be credited for $340000.

If common stock is issued for an amount greater than par value, the excess should be credited to

Paid-in Capital in Excess of Par Value.

Which of the following statements about treasury stock is true?

Purchasing treasury stock is done to eliminate hostile shareholder buyouts.

Which is an example of a cash flow from an investing activity?

Receipt of cash from the sale of equipment

Stockholders of a corporation directly elect

the board of directors.

A company purchased factory equipment on April 1, 2017, for $115300. It is estimated that the equipment will have a $14500 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017, is

$10080.

A company sells a plant asset that originally cost $350000 for $95000 on December 31, 2017. The accumulated depreciation account had a balance of $140000 after the current year's depreciation of $35000 had been recorded. The company should recognize a

$115000 loss on disposal.

quipment with a cost of $755600 has an estimated salvage value of $50000 and an estimated life of 4 years or 16800 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 4200 hours?

$176400.

The following data are available for Allen Clapp Corporation: Net income $200,000 Depreciation expense 40,000 Dividends paid 60,000 Gain on sale of land 10,000 Decrease in accounts receivable 20,000 Decrease in accounts payable 30,000 How much is cash provided by operating activities using the indirect method?

$220,000

On July 1, 2017, Oriole Company purchased the copyright to Cheyenne Corp. for $260000. It is estimated that the copyright will have a useful life of 5 years. The amount of amortization expense recognized for the year 2017 would be

$26000.

Equipment was purchased for $149500. Freight charges amounted to $3500 and there was a cost of $22000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $32000 salvage value at the end of its 5-year useful life. Depreciation Expense each year using the straight-line method will be

$28600

Given the following account balances at year end, compute the total intangible assets on the balance sheet of Blossom Company. Cash $1000000 Accounts Receivable 1000000 Trademarks 1200000 Goodwill 2500000 Research & Development Costs 2000000

$3700000.

A company purchased land for $320000 cash. Real estate brokers' commission was $21000 and $50000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at

$391000

Ivanhoe Company purchases a new delivery truck for $50000. The sales taxes are $3800. The logo of the company is painted on the side of the truck for $1200. The truck's annual license is $140. The truck undergoes safety testing for $280. What does Ivanhoe record as the cost of the new truck?

$55280

Marigold Corp. purchased a delivery van with a $72000 list price. The company was given a $6200 cash discount by the dealer, and paid $3500 sales tax. Annual insurance on the van is $1600. As a result of the purchase, by how much will Marigold Corp. increase its van account?

$69300

Cullumber Company purchased equipment and these costs were incurred: Cash price $71000 Sales taxes 2700 Insurance during transit 800 Installation and testing 850 Total costs $75350

75350

Accounts Payable decreases during the period by $6,000. What adjustment to net income should be made if the indirect method is used?

A decrease of $6,000

Sheridan Company issues 4500 shares of $10 par value common stock at $11 per share. When the transaction is recorded, credits are made to:

Common Stock $45000 and Paid-in Capital in Excess of Par Value $4500.

Blue Spruce Corporation began business in 2017 by issuing 96000 shares of $5 par common stock for $8 per share and 25000 shares of 9%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2017 balance sheet, Blue Spruce would report

Common Stock of $480000.

Which of the following methods will result in the highest depreciation in the first year?

Declining-balance.

What type of activity is the purchase of equipment for cash?

Investing activity

Which activities are reported on the statement of cash flows?

Investing, financing, and operating

Which statement is not correct about the usefulness of the statement of cash flows?

It helps users assess the profitability of a company.

Under the indirect method of preparing the statement of cash flows, how is an increase in accounts receivable handled?

It is deducted from net income.

Which of the following is a reason that companies favor the indirect method of preparing the statement of cash flows?

It is easier and less costly to prepare than the direct method.

Which of the following would not be true of a privately held corporation?

Its shares are regularly traded on the New York Stock Exchange.

Which of the following assets does not decline in service potential over the course of its useful life?

Land

Compton Inc. made a $500 ordinary repair to a piece of equipment. Compton's accountant debited this amount to the asset account, Equipment and credited Cash. Was this the correct entry and if not, why not?

No, the correct entry would be a debit to Maintenance and Repairs Expense and a credit to Cash.

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

To declare dividends on the common stock

Which of the following methods of computing depreciation is production based?

Units-of-activity.

Tamarisk purchased 2300 shares of its own previously issued $10 par common stock for $55200. As a result of this event,

amarisk total stockholders' equity decreased $55200.

The balance in the Accumulated Depreciation account represents the

amount charged to expense since the acquisition of the plant asset.

In computing depreciation, salvage value is

an estimate of a plant asset's value at the end of its useful life.

The book value of an asset is equal to the

asset's cost less accumulated depreciation.

All leases are classified as either

capital leases or operating leases.

Depreciation is a process of

cost allocation

The declining-balance method of depreciation produces a(n)

decreasing depreciation expense each period.

Par value

is the value assigned per share in the corporate charter.

Wildhorse Co. sold office furniture for $56000. The furniture had an original cost of $147000 and accumulated depreciation of $73500. Ignoring the tax effect, as a result of the sale

net income will decrease $17500.

A corporation has the following account balances: Common Stock, $1 par value, $100000; Paid-in Capital in Excess of Par Value, $2730000. Based on this information, the

number of shares issued is 100000.

The two ways that a corporation can be classified by ownership are

publicly held and privately held.