Accounting 115 Final

Rye Company has provided the following information: · Weighted average number of outstanding common shares, 176,000 · Net income, $334,400 · Number of authorized common shares, 370,000 · Number of treasury shares, 19,000 What is Rye's earnings per share (EPS)? Net income / Weighted average number of outstanding shares

$1.90

Aura Industries purchased land by paying $29,000 cash on the purchase date and agreeing to pay $29,000 for each of the next nine years beginning one-year from the purchase date. Aura's incremental borrowing rate is 10%. The land reported on the balance sheet is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (present value of the nine remaining payments × present value factor for a 10%, 9-period ordinary annuity), plus the initial payment

$196,012

Bexley Company sold equipment for $138,000, purchased a building for $3,263,000, sold short-term investments for $153,000, repaid principal on a note payable for $1,280,000 plus $128,000 of interest, and paid cash dividends of $23,000. What was Bexley's net cash flow from investing activities?

$2,972,000 outflow

A company reported total stockholders' equity of $166,000 on its balance sheet dated December 31, 2021. During the year ended December 31, 2022, the company reported net income of $21,400, declared and paid a cash dividend of $5,400, declared and distributed a 10% stock dividend with a $6,400 total market value, and issued additional common stock for $36,000. What is total stockholders' equity as of December 31, 2022?

$218,000

A company reported the following asset and liability balances at the end of 2021 and 2022: Total Assets $6,600,000 (2021) $7,400,000 (2022) Total Liabilities 3,760,000 (2021) 4,240,000 (2022) During 2022, cash dividends of $74,000 were declared and paid, and common stock was issued for $98,000. What was the amount of net income for 2022? (1) 2021 stockholders' equity = $2,840,000 = Assets − Liabilities = $6,600,000 − $3,760,000. (2) 2022 stockholders' equity = $3,160,000 = Assets − liabilities = $7,400,000 − $4,240,000. (3) The change in stockholders' equity during 2022 = $320,000 = 2022 stockholders' equity − 2021 stockholders' equity = $3,160,000 − $2,840,000. (4) The change in stockholders' equity during 2022 = $320,000 = the change in common stock + the change in retained earnings = $98,000 + $222,000. (5) The change in retained earnings = $222,000 = net income − dividends = $296,000

$296,000

On January 1, 2022, Phillies Corporation issued a six-year, $40,000, 7% bond. The interest is payable annually each December 31. The issue price was $38,152 based on an 8% effective interest rate. Phillies Corp uses the effective-interest amortization method. The 2023 interest expense is closest to: 2022 interest expense = $3,052 = initial issue price, which is the 1/1/2022 book value × the market (effective) interest rate = $38,152 × 0.08. Cash interest payment = $2,800 = maturity value of the bond × the coupon interest rate = $40,000 × 0.07. Amortization of discount on bonds payable = $252 = interest expense − interest cash payment = $3,052 − $2,800. December 31, 2022 book value = $38,404 = January 1, 2022 book value + amortization of discount on bonds payable amortization = $38,152 + $252. 2023 interest expense = $3,072 = 12/31/2020 book value × the market (effective) interest rate = $38,404 × 0.08.

$3,072

On January 1, 2022, Pipestone Corporation issued a four-year, $40,000, 6% bond. The interest is payable annually each December 31. The issue price was $38,645 based on an 7% effective interest rate. Pipestone uses the effective-interest amortization method. The book value of the bonds as of December 31, 2022 is closest to: 2022 interest expense = $2,705 = initial issue price, which is the 1/1/2022 book value × the market (effective) interest rate = $38,645 × 0.07. Cash interest payment = $2,400 = maturity value of the bond × the coupon interest rate = $40,000 × 0.06. Amortization of discount on bonds payable = $305 = interest expense − interest cash payment = $2,705 − $2,400. December 31, 2022 book value = $38,950 = January 1, 2022 book value + amortization of discount on bonds payable amortization = $38,645 + $305

$38,950

Burich Company reported short-term borrowings of $4.00 million, long-term borrowings of $6.95 million, repayments of long-term borrowings of $4.25 million, interest payments of $781,500, purchase of common stock shares for treasury of $2.00 million, and cash dividends declared of $4.85 million. What is the cash flow from financing activities

$4,700,000 net cash inflow

1. Watson Company has provided the following data about its common stock: · Par value is $1 per share · 10,000,000 authorized shares · 4,372,000 shares are outstanding · 4,780,000 shares are issued How many shares of treasury stock are there? Issued Shares − Outstanding Shares = Treasury Shares

408,000

Which of the following is not a current liability?

A liability due within fifteen months for a business with a one-year operating cycle.

Which of the following statements about the statement of cash flows is correct?

Cash dividends received on stock investments are classified as cash flows from operating activities

RKJ Company has provided the following information: · 100,000 shares of $5 par value common stock are authorized · 79,000 shares have been issued · 74,000 shares are outstanding The 79,000 shares of issued common stock were issued for $7 per share.Which of the following statements is correct?

Common stock is reported at $395,000 on the balance sheet

Which of the following statements is false?

Corporations are governed by their stockholders

Which of the following statements is correct?

Current liabilities affect working capital and the cash flows from operating activities.

Which of the following is correct?

Deferred revenues will eventually become revenue earned.

Which of the following statements is correct?

Employee benefits such as vacation time and sick days should be recognized when the employees earn the benefit and not when they take the days off from work

Which of the following is incorrect?

Interest that will be paid in the future is included in the reported amount of a current liability

Which of the following describes an accrued liability?

It is an expense that has been incurred but not yet paid

Which of the following represents the number of shares currently owned by investors?

Outstanding shares

Which of the following transactions would be reported in the cash flow statement as a cash flow from financing activities?

Paying cash dividends to stockholders

Which of the following types of bonds has specific assets pledged to guarantee repayment?

Secured bond.

Which of the following statements does not correctly describe the accounting for bonds that were issued at a discount?

The amortization of the discount on bonds payable account decreases as the bonds mature when the effective interest method is used

The annual interest rate specified within a bond indenture is called which of the following?

The coupon rate of interest

When a company needs funds to finance the expansion of its operations, which of the following is not an advantage of issuing bonds rather than issuing stock

The dates for the interest and maturity payments are fixed

A company has 10 million common shares authorized and 2.5 million shares issued. The par value is $1 per share and the market price is $30 when the company declares a 4-for-1 stock split. Which of the following is correct?

The shares issued and outstanding will all quadruple while the par value will be reduced to $0.25 per share

Which of the following statements best describes callable bonds?

They can be called for early retirement at the option of the issuer

Which of the following statements best describes convertible bonds?

They can be converted to common stock at the option of the bondholder.

The two primary sources of equity shown in a balance sheet are

contributed capital and earned capital