Intermediate Gleim

Baker Co. issued 100,000 shares of common stock in the current year. On October 1, Baker repurchased 20,000 shares of its common stock on the open market for $50.00 per share. At that date, the stock's par value was $1.00 and the average issue price was $40.00 per share. Baker uses the cost method for treasury stock transactions. On December 1, Baker reissued the stock for $60.00 per share. What amount should Baker report as treasury stock gain at December 31?

$0

During the current year, Onal Co. purchased 10,000 shares of its own stock at $7 per share. The stock was originally issued at $6. The firm sold 5,000 of the treasury shares for $10 per share. The firm uses the cost method to account for treasury stock. What amount should Onal report in its income statement for these transactions?

$0

On December 1, Year 4, Line Corp. received a contribution of 2,000 shares of its $5 par value common stock from a shareholder. On that date, the stock's fair value was $35 per share. The stock was originally issued for $25 per share. By what amount will this contribution cause total equity to decrease if Line accounts for treasury stock using the cost method?

$0

Ray Corp. declared a 5% stock dividend on its 10,000 issued and outstanding shares of $2 par value common stock, which had a fair value of $5 per share before the stock dividend was declared. This stock dividend was distributed 60 days after the declaration date. By what amount did Ray's current liabilities increase as a result of the stock dividend declaration?

$0

Universe Co. issued 500,000 shares of common stock in the current year. Universe declared a 30% stock dividend. The market value was $50 per share, the par value was $10, and the average issue price was $30 per share. By what amount will Universe decrease shareholders' equity for the dividend?

$0

Poe Co. had 300,000 shares of common stock issued and outstanding at December 31, Year 1. No common stock was issued during Year 2. On January 1, Year 2, Poe issued 200,000 shares of nonconvertible preferred stock. During Year 2, Poe declared and paid $75,000 of cash dividends on the common stock and $60,000 on the preferred stock. Net income for the year ended December 31, Year 2, was $330,000. What should be Poe's Year 2 basic earnings per common share?

$0.90

Willem Co. reported the following liabilities at December 31, Year 1: Accounts payable-trade $ 750,000 Short-term borrowings 400,000 Mortgage payable, current portion $100,000 3,500,000 Other bank loan, matures June 30, Year 2 1,000,000 The $1,000,000 bank loan was refinanced with a 20-year loan on January 15, Year 2, with the first principal payment due January 15, Year 3. Willem's audited financial statements were issued February 28, Year 2. What amount should Willem report as current liabilities at December 31, Year 1?

$1,250,000

Lem Co., which accounts for treasury stock under the par-value method, acquired 100 shares of its $6 par value common stock for $10 per share. The shares had originally been issued by Lem for $7 per share. By what amount would Lem's additional paid-in capital from common stock decrease as a result of the acquisition?

$100

Long Co. had 100,000 shares of common stock issued and outstanding at January 1. During the year, Long took the following actions: March 15 -- declared a 2-for-1 stock split, when the fair value of the stock was $80 per share December 15 -- declared a $.50 per share cash dividend In Long's statement of changes in equity for the year, what amount should Long report as dividends?

$100,000

Brass Co. reported income before income tax expense of $60,000 for Year 2. Brass had no permanent or temporary differences for tax purposes. Brass has an effective tax rate of 30% and a $40,000 net operating loss carryforward from Year 1. What is the maximum income tax benefit that Brass can realize from the loss carryforward for Year 2?

$12,000

East Corp. manufactures stereo systems that carry a 2-year warranty against defects. Based on past experience, warranty costs are estimated at 4% of sales for the warranty period. During the year, stereo system sales totaled $3 million, and warranty costs of $67,500 were incurred. In its income statement for the year ended December 31, East should report warranty expense of

$120,000

On November 1, Mason Corp. issued $800,000 of its 10-year, 8% term bonds dated October 1. The bonds were sold to yield 10%, with total proceeds of $700,000 plus accrued interest. Interest is paid every April 1 and October 1. What amount should Mason report for interest payable in its December 31 balance sheet?

$16,000

A hotel enters into a contract with a customer to provide 10 rooms for 10 nights for $200 per room per night. In addition to the room price per night, the hotel collects a city occupancy tax of $7 per room per night. According to the hotel's promotion, each customer that purchases in total more than 50 room nights is entitled to a credit of $3,000 on the entire purchase. What is the total transaction price of the contract?

$17,000

On May 18, Sol Corp.'s board of directors declared a 10% stock dividend. The market price of Sol's 3,000 outstanding shares of $2 par value common stock was $9 per share on that date. The stock dividend was distributed on July 21, when the stock's market price was $10 per share. What amount should Sol credit to additional paid-in capital for this stock dividend?

$2,100

Collins Company reported net income of $350,000 for the year. The company had 10,000 shares of $100 par value, noncumulative, 6% preferred stock and 100,000 shares of $10 par value common stock outstanding. Also, 5,000 shares of common stock were in treasury during the year. Collins declared and paid all preferred dividends as well as a $1 per share dividend on common stock. Collins Company's basic earnings per share of common stock for the year was

$2.90

On January 1, Korn Co. sold to Kay Corp. $400,000 of its 10% bonds for $354,118 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Korn report as interest expense for the 6 months ended June 30?

$21,247

Lind Co.'s salaries expense of $10,000 is paid every other Friday for the 10 workdays then ending. Lind's employees do not work on Saturdays and Sundays. The last payroll was paid on June 18. On Wednesday, June 30, the month-end balance in the salaries expense account before accruals was $14,000. What amount should Lind report as salaries expense in its income statement for the month ended June 30?

$22,000

East Co. issued 2,000 shares of its $5 par common stock to Krannik as compensation for 1,000 hours of legal services performed. Krannik usually bills $200 per hour for legal services. On the grant date of the shares, the stock was trading on a public exchange at $160 per share. By what amount should the additional paid-in capital account increase?

$310,000

In its Year 4 financial statements, Cris Co. reported interest expense of $85,000 in its income statement and cash paid for interest of $68,000 in its cash flow statement. There was no prepaid interest or interest capitalization at either the beginning or the end of Year 4. Accrued interest at December 31, Year 3, was $15,000. What amount should Cris report as accrued interest payable in its December 31, Year 4, balance sheet?

$32,000

Cyan Corp. issued 20,000 shares of $5 par common stock at $10 per share. On December 31, Year 3, Cyan's retained earnings were $300,000. In March Year 4, Cyan reacquired 5,000 shares of its common stock at $20 per share. In June Year 4, Cyan sold 1,000 of these shares to its corporate officers for $25 per share. Cyan uses the cost method to record treasury stock. Net income for the year ended December 31, Year 4 was $60,000. At December 31, Year 4, what amount should Cyan report as retained earnings?

$360,000

In its Year 3 income statement, Noll Corp. reported depreciation of $400,000. Noll reported depreciation of $550,000 on its Year 3 income tax return. The difference in depreciation is the only temporary difference, and it will reverse equally over the next 3 years. Assume that the enacted income tax rates are 35% for Year 3, 30% for Year 4, and 25% for Year 5 and Year 6. What amount should be included in the deferred income tax liability in Noll's December 31, Year 3, balance sheet?

$40,000

On January 1, Year 1, Kay, Inc., issued 10% bonds in the face amount of $400,000, which mature on January 1, Year 11. The bonds were issued for $354,000 to yield 12%, resulting in bond discount of $46,000. Kay uses the interest method of amortizing bond discount. Interest is payable semiannually on July 1 and January 1. At June 30, Year 1, Kay's unamortized bond discount should be

$44,760

Mill Co.'s trial balance included the following account balances at December 31, Year 6: Accounts payable $15,000 Bonds payable, due Year 7 25,000 Discount on bonds payable, due Year 7 3,000 Dividends payable 1/31/Year 7 8,000 Notes payable, due Year 8 20,000 What amounts should be included in the current liability section of Mill's December 31, Year 6, balance sheet?

$45,000

On December 2, Huff Corp. received a condemnation award of $450,000 as compensation for the forced sale of land purchased 5 years earlier for $300,000. The gain was not reported as taxable income on its income tax return for the year ended December 31 because Huff elected to replace the land within the allowed replacement period for at least $450,000. Huff has an income tax rate of 25% for the current year, and the enacted rate is 30% for subsequent years. There were no other temporary differences. In its December 31 balance sheet, Huff should report a deferred income tax liability of

$45,000

Ryan Co. sells major household appliance service contracts for cash. The service contracts are for a 1-year, 2-year, or 3-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had a balance of $720,000 at December 31, Year 1, before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of $180,000 at December 31, Year 1. Outstanding service contracts at December 31, Year 1, expire as follows: During Year 2 - $150,000 During Year 3 - 225,000 During Year 4 - 100,000 What amount should be reported as unearned service contract revenues in Ryan's December 31, Year 1, balance sheet?

$475,000

Barnel Corp. owns and manages 19 apartment complexes. On signing a lease, each tenant must pay the first and last months' rent and a $500 refundable security deposit. The security deposits are rarely refunded in total because cleaning costs of $150 per apartment are almost always deducted. About 30% of the time, the tenants are also charged for damages to the apartment, which typically cost $100 to repair. If a 1-year lease is signed on a $900 per month apartment, what amount would Barnel report as refundable security deposit?

$500

Lyle, Inc., is preparing its financial statements for the year ended December 31, Year 3. Accounts payable amounted to $360,000 before any necessary year-end adjustment related to the following: At December 31, Year 3, Lyle has a $50,000 debit balance in its accounts payable to Ross, a supplier, resulting from a $50,000 advance payment for goods to be manufactured to Lyle's specifications. Checks in the amount of $100,000 were written to vendors and recorded on December 29, Year 3. The checks were mailed on January 5, Year 4. What amount should Lyle report as accounts payable in its December 31, Year 3, balance sheet?

$510,000

On July 31, Year 4, Dome Co. issued $1,000,000 of 10%, 15-year bonds at par and used a portion of the proceeds to call its 600 outstanding 11%, $1,000 face amount bonds due on July 31, Year 14, at 102. On that date, unamortized bond premium relating to the 11% bonds was $65,000. In its Year 4 income statement, what amount should Dome report as gain or loss, before income taxes, from retirement of bonds?

$53,000 gain

During Year 3, Rex Co. introduced a new product carrying a 2-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, Year 3 and Year 4, are as follows: Actual Warranty Sales Expenditures Year 3 $ 600,000 $ 9,000 Year 4 1,000,000 30,000 $1,600,000 $39,000 At December 31, Year 4, Rex should report an estimated warranty liability of

$57,000

On July 1, Year 1, Eagle Corp. issued 600 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, Year 1, and mature on April 1, Year 11. Interest is payable semiannually on April 1 and October 1. What amount did Eagle receive from the bond issuance?

$609,000

During the current year, Comma Co. had outstanding: 25,000 shares of common stock; 8,000 shares of $20 par, 10% cumulative preferred stock; and 3,000 bonds that are $1,000 par and 9% convertible. The bonds were originally issued at par, and each bond was convertible into 10 shares of common stock. During the year, net income was $200,000, no dividends were declared, and the tax rate was 30%. What amount was Comma's basic earnings per share for the current year?

$7.36

Ian Co. is calculating earnings per share amounts for inclusion in the Ian's annual report to shareholders. Ian has obtained the following information from the controller's office as well as shareholder services: Net income from Jan 1 to Dec 31 $125,000 Number of outstanding shares: Jan 1 to March 31 15,000 April 1 to May 31 12,500 June 1 to Dec 31 17,000 In addition, Ian has issued 10,000 incentive share options with an exercise price of $30 to its employees and an average market price for the year of $25 per share. What amount is Ian's diluted earnings per share for the year ended December 31?

$7.94

Rice Co. salaried employees are paid biweekly. Advances made to employees are paid back by payroll deductions. Information relating to salaries follows: 12/31/Yr 1 12/31/Yr 2 Employee advances $24,000 $ 36,000 Accrued salaries payable 40,000 ? Salaries expense during the year 420,000 Salaries paid during the year (gross) 390,000 In Rice's December 31, Year 2, balance sheet, accrued salaries payable was

$70,000

Stone Co. began operations in the current year and reported $225,000 in income before income taxes for the year. Stone's current year tax depreciation exceeded its book depreciation by $25,000. Stone also had nondeductible book expenses of $10,000 related to permanent differences. Stone's tax rate for the year was 40%, and the enacted rate for subsequent years is 35%. In its December 31 balance sheet, what amount of deferred income tax liability should Stone report?

$8,750

On January 1, Esther Pharmaceuticals had a balance of 10,000 shares of common stock outstanding. On June 1, the company issued an additional 2,000 shares of common stock for cash. A total of 5,000 shares of cumulative 6%, $100 par, nonconvertible preferred stock was outstanding all year. Esther's net income was $120,000 for the year. The earnings per share for the year were

$8.06

Ross Co. pays all salaried employees on a Monday for the 5-day workweek ended the previous Friday. The last payroll recorded for the year ended December 31, Year 4, was for the week ended December 25, Year 4. The payroll for the week ended January 1, Year 5, included regular weekly salaries of $80,000 and vacation pay of $25,000 for vacation time earned in Year 4 not taken by December 31, Year 4. Ross had accrued a liability of $20,000 for vacation pay at December 31, Year 3. In its December 31, Year 4, balance sheet, what amount should Ross report as accrued salary and vacation pay?

$89,000

On January 31, Year 4, Beau Corp. issued $300,000 maturity value, 12% bonds for $300,000 cash. The bonds are dated December 31, Year 3, and mature on December 31, Year 13. Interest will be paid semiannually on June 30 and December 31. What amount of accrued interest payable should Beau report in its September 30, Year 4, balance sheet?

$9,000

Jen Co. had 200,000 shares of common stock and 20,000 shares of 10%, $100 par value cumulative preferred stock. No dividends on common stock were declared during the year. Net income was $2,000,000. What was Jen's basic earnings per share?

$9.00

When an entity declares a cash dividend, retained earnings is decreased by the amount of the dividend on the date of

Declaration

Which one of the following transactions does not affect the balance of retained earnings?

Declaration of a stock split

Bal Corp. declared a $25,000 cash dividend on May 8 to shareholders of record on May 23, payable on June 3. As a result of this cash dividend, working capital

Decreased on May 8

Which of the following statements is correct regarding deferred revenues recorded by a company that provides services to customers?

Deferred revenue is a liability until the service has been performed

A retail store received cash and issued a gift certificate that is redeemable in merchandise. When the gift certificate was issued, a

Deferred revenue should be increased

A liability that represents the accumulated difference between the income tax expense reported on the firm's books and the income tax actually paid is

Deferred taxes

A deferred tax liability may result from which of the following items?

Depreciation of tangible assets

On May 1, Rhud Corp. declared and issued a 10% common stock dividend. Prior to this dividend, Rhud had 100,000 shares of $1 par value common stock issued and outstanding. The fair value of Rhud's common stock was $30 per share on May 1. As a result of the stock dividend, Rhud's total equity

Did not change

At December 31, Year 3 and Year 4, Apex Co. had 3,000 shares of $100 par, 5% cumulative preferred stock outstanding. No dividends were in arrears as of December 31, Year 2. Apex did not declare a dividend during Year 3. During Year 4, Apex paid a cash dividend of $10,000 on its preferred stock. Apex should report dividends in arrears in its Year 4 financial statements as a(n)

Disclosure of $20,000

Which of the following circumstances would result in a deferred tax asset for the current year?

Expenses that are recognized in financial income this year and deductible next year

A 10-year term bond was issued in Year 2 at a discount with a call provision to retire the bonds. When the bond issuer exercised the call provision on an interest date in Year 4, the carrying amount of the bond was less than the call price. The amount of bond liability removed from the accounts in Year 4 should have equaled the

Face amount less unamortized discount

A tax rate other than the current tax rate may be used to calculate the deferred income tax amount on the statement of financial position if a(n)

Future tax rate has been enacted into law

A 5-year term bond was issued on January 1, Year 1, at a discount. The carrying amount of the bond at December 31, Year 2, will be

Higher than the carrying amount at December 31, Year 1

For a bond issue that sells for less than its par value, the market rate of interest is

Higher than the rate stated on the bond

The per-share amount must be reported on the face of a public company's income statement for which of the following items?

Income from continuing operations

When revenue from contracts with customers is recognized over time, the progress toward complete satisfaction of a performance obligation may be measured using the

Input method

Under ASC 606, adjustment of the transaction price to reflect the time value of money results in

Interest income or expense that is presented in the income statement separately from revenue

Which one of the following statements regarding treasury stock is correct?

It is reflected in shareholders' equity as a contra account

Noncurrent debt should be included in the current section of the statement of financial position if

It matures within the year and will be retired through the use of current assets

Underhall, Inc.'s common stock is currently selling for $108 per share. Underhall is planning a new stock issue in the near future and would like to stimulate interest in the company. The Board, however, does not want to distribute capital at this time. Therefore, Underhall is considering whether to offer a 2-for-1 common stock split or a 100% stock dividend on its common stock. The best reason for opting for the stock split is that

It will not impair the company's ability to pay dividends in the future

An undistributed stock dividend declared by the Board of Directors should be reported as a(n)

Item in the shareholders' equity section

On January 15, Year 5, Rico Co. declared its annual cash dividend on common stock for the year ended January 31, Year 5. The dividend was paid on February 9, Year 5, to shareholders of record as of January 28, Year 5. On what date should Rico decrease retained earnings by the amount of the dividend?

January 15, Year 5

Aldrich Co. distributes cash dividends to its shareholders during the current year. The dividends are declared on March 9 and are payable to shareholders as of the date of record, which is April 15. The dividends are actually paid on May 19. At which of the following dates would the dividends become a liability to Aldrich?

March 9

The relationship between income tax currently payable and income tax expense is that income tax currently payable

May differ from income tax expense

A deferred tax asset must be reduced by a valuation allowance if it is

More likely than not that some portion will not be realized

Murphy Co. had 200,000 shares outstanding of $10 par common stock on March 30 of the current year. Murphy reacquired 30,000 of those shares at a cost of $15 per share and recorded the transaction using the cost method on April 15. Murphy reissued the 30,000 shares at $20 per share and recognized a $50,000 gain on its income statement on May 20. Which of the following statements is correct?

Murphy's net income for the current year is overstated

Because Jab Co. uses different methods to depreciate equipment for financial statement and income tax purposes, Jab has temporary differences that will reverse during the next year and add to taxable income. Deferred income taxes that are based on these temporary differences should be classified in Jab's balance sheet as a

Noncurrent liability

An entity declared a cash dividend on its common stock in December Year 1, payable in January Year 2. Retained earnings will

Not be affected on the date of payment

A promised asset is transferred in full satisfaction of a performance obligation in a contract when the customer

Obtains control of the asset

An entity entered into a contract to construct a building. Based on the contract's terms, the entity appropriately determined that the performance obligation in the contract will be satisfied over time. At an early stage of the contract, the entity cannot reasonably measure the outcome of the contract, but it expects to recover the costs incurred in the construction of the building. The revenue from the contract should be recognized

Only to the extent of the costs incurred

When debt is issued at a discount, interest expense over the term of debt equals the cash interest paid

Plus discount

The market price of a bond issued at a discount is the present value of its principal amount at the market (effective) rate of interest

Plus the present value of all future interest payments at the market (effective) rate of interest

When purchasing a bond, the present value of the bond's expected net future cash inflows discounted at the market rate of interest provides what information about the bond?

Price

The scope of the FASB's standard on revenue from contracts with customers (ASC 606) includes

Product or service warranty contracts

Earnings per share disclosures are required for

Public entities only

Which one of the following would most likely cause basic earnings per share to increase?

Purchasing treasury stock

Which of the following does not result in recognition of a deferred tax asset?

Receipt of municipal bond interest

Income-tax-basis financial statements differ from those prepared under GAAP because they

Recognize certain revenues and expenses in different reporting periods

According to ASC 606, the incremental costs of obtaining a contract with a customer that are expected to be recovered must be

Recognized as an asset and amortized in subsequent periods

When computing diluted earnings per share (DEPS), convertible securities that are potential common stock are

Recognized only if they are dilutive

A company whose stock is trading at $10 per share has 1,000 shares of $1 par common stock outstanding when the board of directors declares a 30% common stock dividend. Which of the following adjustments should be made when recording the stock dividend?

Retained earnings is debited for $300

What type of bonds mature in installments?

Serial

What type of bonds in a particular bond issuance will not all mature on the same date?

Serial bonds

Rein, Inc., reported deferred tax assets and deferred tax liabilities at the end of both Year 3 and Year 4. For the year ended in Year 4, Rein should report deferred income tax expense or benefit equal to the

Sum of the net changes in deferred tax assets and deferred tax liabilities.

A premium on bonds payable arises when

The amount received from sale of the bonds at issuance exceeds the face value of the bonds

Which of the following is not a criterion that must be met for a contract with a customer to be accounted for under the revenue recognition standard (ASC 606)?

The costs to fulfill the contract are expected to be recovered

Which one of the following statements regarding dividends is correct?

The declaration and payment of a 10% stock dividend will result in a reduction of retained earnings at the fair market value of the stock

Under ASC 606, the transaction price generally should be adjusted for the effect of the time value of money when

The selling price of the product and the consideration promised in the contract differ significantly

A software developer enters into a contract with a new customer to sell a software license and perform installation services. The entity sometimes sells the license and installation services separately. The installation service is routinely performed by other entities and does not significantly modify the software. The entity historically provided to new customers technical support for a 5-year period for no additional consideration. The contract does not specify the terms or conditions for the technical support services. Under ASC 606, which of the following represents the performance obligations identified by the entity in this contract?

Three performance obligations: (1) Software license, (2) installation services, and (3) technical support services

Which of the following statements is a primary objective of accounting for income taxes?

To recognize the amount of deferred tax liabilities and deferred tax assets reported for future tax consequences

How would the proceeds received from the advance sale of nonrefundable tickets for a theatrical performance be reported in the seller's financial statements before the performance?

Unearned revenue for the entire proceeds

On July 1, Alto Corp. split its common stock 5-for-1 when the market value was $100 per share. Prior to the split, Alto had 10,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock

Was reduced to $2

Vadis Co. sells appliances that include a standard 3-year assurance-type warranty. Service calls under the warranty are performed by an independent mechanic under a contract with Vadis. Based on experience, warranty costs are estimated at $30 for each machine sold. When should Vadis recognize these warranty costs?

When the machines are sold

A corporation issuing stock should charge retained earnings for the fair value of the shares issued in a(n)

10% stock dividend.

Jones Co. had 50,000 shares of $5 par value common stock outstanding at January 1. On August 1, Jones declared a 5% stock dividend followed by a two-for-one stock split on September 1. What amount should Jones report as common shares outstanding at December 31?

105,000

On December 1, Clay Co. declared and issued a 6% stock dividend on its 100,000 shares of outstanding common stock. There was no other common stock activity during the year. What number of shares should Clay use in determining basic earnings per share (BEPS) for the year?

106,000

On January 1, Apex Company, whose stock is publicly traded, had 100,000 shares of common stock issued and outstanding. On April 1, Apex issued a 10% stock dividend. The number of shares to be used in the computation of basic earnings per share for the fiscal year ending on December 31 is

110,000

Album Co. issued 10-year $200,000 debenture bonds on January 2. The bonds pay interest semiannually. Album uses the effective interest method to amortize bond premiums and discounts. The carrying amount of the bonds on January 2 was $185,953. A journal entry was recorded for the first interest payment on June 30, debiting interest expense for $13,016 and crediting cash for $12,000. What is the annual stated interest rate for the debenture bonds?

12%

On January 1 of the current year, a corporation had 10,000 shares of common stock outstanding. On March 30, the corporation issued 4,000 more shares of stock. There were no other changes in the number of shares outstanding. What is the weighted-average number of shares that should be used to calculate basic earnings per share?

13,000

Deck Co. had 120,000 shares of common stock outstanding at January 1. On July 1, it issued 40,000 additional shares of common stock. Outstanding all year were 10,000 shares of nonconvertible cumulative preferred stock. What is the number of shares that Deck should use to calculate basic earnings per share?

140,000

On December 31, Year 2, Case, Inc., had 300,000 shares of common stock issued and outstanding. Case issued a 10% stock dividend on July 1, Year 3. On October 1, Year 3, Case purchased 24,000 shares of its common stock for its treasury and recorded the purchase by the cost method. What number of shares should be used in computing basic earnings per share for the year ended December 31, Year 3?

324,000

Rudd Corp. had 700,000 shares of common stock authorized and 300,000 shares outstanding at December 31, Year 3. The following events occurred during Year 4: January 31 Declared 10% stock dividend June 30 Purchased 100,000 shares August 1 Reissued 50,000 shares November 30 Declared 2-for-1 stock split At December 31, Year 4, how many shares of common stock did Rudd have outstanding?

560,000

A bond issued on June 1, Year 4, has interest payment dates of April 1 and October 1. Bond interest expense for the year ended December 31, Year 4, is for a period of

7 months

Buc Co. receives deposits from its customers to protect itself against nonpayments for future services. These deposits should be classified by Buc as

A contract liability

A company issues bonds at 98, with a maturity value of $50,000. The entry the company uses to record the original issue should include which of the following?

A debit to bond discount of $1,000

On March 1, Year 1, Somar Co. issued 20-year bonds at a discount. By September 1, Year 6, the bonds were quoted at 106 when Somar exercised its right to retire the bonds at 105. How should Somar report the bond retirement on its Year 6 income statement?

A loss in continuing operations

In its first 4 years of operations, Alder, Inc.'s depreciation for income tax purposes exceeded its depreciation for financial statement purposes. This temporary difference was expected to reverse over the next 3 years. Alder had no other temporary differences. Alder's balance sheet for its fourth year of operation should include

A noncurrent deferred tax liability only

In determining earnings per share, interest expense, net of applicable income taxes, on dilutive convertible debt should be

Added back to net income for diluted earnings per share

In computing the loss per share of common stock, cumulative preferred dividends not earned should be

Added to the loss for the year

Day Corp. holds 10,000 shares of its $10 par value common stock as treasury stock reacquired in Year 2 for $120,000. On December 12, Year 4, Day reissued all 10,000 shares for $190,000. Under the cost method of accounting for treasury stock, the reissuance resulted in a credit to

Additional paid-in capital of $70,000.

A company issued a bond with a stated rate of interest that is less than the effective interest rate on the date of issuance. The bond was issued on one of the interest payment dates. What should the company report on the first interest payment date?

An interest expense that is greater than the cash payment made to bondholders

When accounting for income taxes, a temporary difference occurs in which of the following scenarios?

An item is included in the calculation of net income in one year and in taxable income in a different year

The best evidence of a standalone selling price of a promised good or service to a customer is

An observable price

In computing diluted earnings per share (DEPS), the equivalent number of shares of convertible preferred stock is added as an adjustment to the denominator (number of shares outstanding). If the preferred stock is preferred as to dividends, which amount should be added as an adjustment to the numerator (earnings available to common shareholders)?

Annual preferred dividend

Under current generally accepted accounting principles, which approach is used to determine income tax expense?

Asset-and-liability approach

In analyzing a company's financial statements, which financial statement will a potential investor primarily use to assess the company's liquidity and financial flexibility?

Balance Sheet

The if-converted method of computing diluted earnings per share (DEPS) amounts assumes conversion of convertible securities at the

Beginning of the earliest period reported (or at time of issuance, if later)

With respect to the computation of earnings per share, which of the following would be most indicative of a simple capital structure?

Common stock, preferred stock, and debt outstanding

If a corporation sells some of its treasury stock at a price that exceeds its cost, this excess should be

Credited to additional paid-in capital

A company has outstanding accounts payable of $30,000 and a short-term construction loan in the amount of $100,000 at year end. The loan was refinanced through issuance of long-term bonds after year end but before issuance of financial statements. How should these liabilities be recorded in the balance sheet?

Current liabilities of $30,000, noncurrent liabilities of $100,000

As of December 1, Year 2, a company obtained a $1,000,000 line of credit maturing in 1 year on which it has drawn $250,000, a $750,000 secured note due in 5 annual installments, and a $300,000 3-year balloon note. The company has no other liabilities. How should the company's debt be presented in its classified balance sheet on December 31, Year 2, if no debt repayments were made in December?

Current liabilities of $400,000; long-term liabilities of $900,000

An entity receives an advance payment for special order goods that are to be manufactured and delivered within 6 months. The advance payment should be reported in the company's balance sheet as a

Current liability

How should unearned rent that has already been paid by tenants for the next eight months of occupancy be reported in a landlord's financial statements?

Current liability