This quiz tests how well you understand the concepts covered in Weeks 1 and 2. Quiz 1 contains 10 multiple-choice question
points. Problem 2 is worth 30 points (15 points for Part A and 15 points for Part B). The computer will automatically grade the
will not be complete until your instructor manually grades the short-answer questions. Your instructor may grant partial cre
complete answers. You can take the quiz only once. You can save each question after answering, and you can save the quiz bef
quiz, you will receive a score and be able to compare your answers to the correct ans 1.) A corporation has the following account balances: Common Stock, $2 par value, $820,000; Paid-in Capital in Excess of Par, $
a. legal capital is $2,240,000
b. shares issued are 410,000
c. shares outstanding are 820,000 2.) On January 2, 2015, Easton Corporation issued 70,000 shares of 6% cumulative preferred stock at $40 par value. No di
shareholders since the formation of the corporation. Management wants to issue a dividend to common shareholders on De
amount, if any, must be paid to the preferred stockholders entitled before any distribution is made to comm
a. $336,600
b. $0
c. $504,000
d. $168,000 3. The Frederick Company has 125,000 shares of $5 par common stock issued and 5,000 shares of Treasury Stock.
Management declares a 12% stock dividend. The market value of a share of common stock was $28 immediately prior to the
stock dividend declaration. The journal entry for the declaration of the stock dividend is: a. b. Account Title
Retained Earnings Debit
Credit
$403,200 Stock Dividends Distributable 72,000 Paid-in Capital in Excess of Par 331,200 Account Title
Stock Dividends Distributable Debit Credit
$75,000 Common Stock c. Account Title
Retained Earnings 75,000 Debit
Credit
$402,000 Stock Dividends Distributable 75,000 Paid-in Capital in Excess of Par 345,000 4. The Frederick Company has 125,000 shares of $5 par common stock issued and 5,000 shares of Treasury Stock. Managem
stock dividend. The market value of a share of common stock was $28 immediately prior to the stock dividend declaration. Th
payment of the stock dividend is: a. b. Account Title
Retained Earnings Debit
Credit
$420,200 Stock Dividends Distributable 75,000 Paid-in Capital in Excess of Par 345,200 Account Title
Stock Dividends Distributable Debit Credit
$72,000 Common Stock c. Account Title
Stock Dividends Distributable 72,000 Debit Credit
$75,000 Common Stock d. Account Title
Retained Earnings 75,000 Debit
Credit
$403,200 Stock Dividends Distributable 72,000 Paid-in Capital in Excess of Par 331,200 5. Cambridge Hat Company previously purchased 25,000 shares of treasury stock on the open market for $17 per share. Late
13,000 shares for $19 per share. What is the journal entry for the sale? a. Account Title
Cash Debit
Credit
$425,000 Treasury Stock b. Account Title
Cash 425,000 Debit
Credit
$247,000 Treasury Stock 221,000 Retained Earnings c. Account Title
Cash 26,000 Debit
Credit
$247,000 Treasury Stock 26,000 Paid-in Capital---Treasury Stock d. Account Title
Cash
Treasury Stock
Paid-in Capital---Treasury Stock 221,000 Debit
Credit
$247,000
221,000
26,000 6. Smith Ventures Inc. purchased 12% of the outstanding stock of Jones Company. Smith paid $15 per share to acquire 11,000
purchase as available-for-sale securities. Par value of the stock is $2. Smith uses a calendar year, and on December 31, the mar
is $18 per share. What is the entry Smith needs to make on December 31? a. Account Title
Unrealized Gain on Available-for-sale Securities Debit Credit
$33,000 Available-for-sale Securities 33,000 no entry is required because the stock has not been sold b. Account Title
Available-for-sale Securities Debit Credit
$33,000 Unrealized Gain Available-for-sale Securities c. Account Title
Available-for-sale Securities
Unrealized Gain Available-for-sale Securities 33,000 Debit Credit
$3,960
3,960 7. Richmond Corporation has issued an outstanding common stock of 80,000 shares, $5 par value. On July
1, the company pays a 3-for-2 stock split. What are the legal capital and the par value of the stock
immediately after the split? a. Legal capital, $400,000; par value, $5. b. Legal capital, $600,000; par value, $7.50. c. Legal capital, $400,000; par value, $3.33. d. Legal capital, $80,000; par value, $5. 8.
On January 10, Acme Ventures Inc. purchased 35% of the outstanding stock of Gamma Ray
Manufacturing Corp. The purchase was 38,000 shares at $22 per share. Acme received dividends from
Gamma Ray in the amount of $40,000 on June 15 and again on December 15. Gamma reported net
income for the year ended December 31 in the amount of $550,000. What is the account balance of
Acme’s investment in Gamma Ray on December 31? a. $1,036,000 b. $1,028,500 c. $1,042,500 d. $1,000,500 9. High Adventure Corp. issues $150,000 of 9%, 10-year bonds for 96. High Adventure uses the straightline method to amortize any bond discounts or premiums. The bonds pay interest semiannually. On the
maturity date of the bond, what is the journal entry for the final interest payment and the redemption of
the bonds? a. Account Title
Bonds Payable
Interest Expense Debit
Credit
$144,000
13,350
Cash
Discount on Bonds Payable b. Account Title 156,750
600 Debit Cash Credit $150,000 Discount on Bonds Payable
Bonds Payable 6,750
156,750 c. Account Title Debit Bonds Payable Credit $150,000 Interest Expense 7,050
Cash 156,750 Discount on Bonds Payable 300 10.) On January 1, 2017, Towson Inc. issued $525,000, 20-year, 8% bonds at 103. Interest is payable
semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2017, is: a. Account Title Debit Cash Credit $540,750
Bonds Payable b. Account Title Debit Cash c. $540,750 Credit $540,750
Premium on Bonds Payable $15,750 Bonds Payable 525,000 Account Title Debit Cash Credit $525,000
Bonds Payable $525,000 d. Account Title Debit Cash Credit $525,000 Premium on Bonds Payable
Bonds Payable $15,750
540,750 11.) Enter the following Journal Entries ……..
Salisbury Corporation formed a corporation on January 3,
2017, and is authorized to issue 400,000 shares of $6 par value common stock. The company has the
following stock transactions. 1/10/2017 Issued 195,000 shares of stock at $19 per share. 1/25/2017 The law firm that helped the company incorporate and file
all forms for the stock issue accepts 800 shares of newly
issued stock in lieu of cash for its legal bill rendered. The
amount of the legal bill was $33,000. 6/10/2017 Salisbury Corporation declares a $0.65 per
share dividend payable July 15 to shareholders
of record as of June 30, 2017. 6/30/2017 The record date for the dividend declared on June 10. 7/15/2017 The dividend declared on June 10 is paid. 9/15/2017 9/30/2017
10/15/2017 12/18/2017 Salisbury Corporation formed a corporation on January 3,
2017, and is authorized to issue 400,000 shares of $6 par
value common stock. The company has the following
stock transactions.
The stock dividend declared on September 15 is paid.
Salisbury Corporation buys 10,000 shares of its
own stock on the open market for $18.75 per
share.
Salisbury Corporation resells 2,500 shares of
the treasury stock for $19.05 per share. Date Account Title
Debit
1/1/2017 Account to debit
Amount
Account to credit
Account to credit
1/25/2017 Account to debit
Amount
Account to credit
Account to credit
6/10/2017 Account to debit
Amount
Account to credit
6/30/2017 No entry required on record date
7/15/2017 Account to debit
Amount
Account to credit
9/15/2017 Account to debit
Amount
Account to credit
Account to credit
9/30/2017 Account to debit
Amount
Account to credit
10/15/2017 Account to debit
Amount
Account to credit
12/18/2017 Account to debit
Amount
Account to credit
Account to credit 12.) Amount
Amount
Amount
Amount
Amount Amount
Amount
Amount
Amount
Amount
Amount
Amount On June 1, 2017 Alpha Company sells $1,400,000 face
value of 9% five year bonds which call for semiannual
interest payments. The bonds are dated April 1, 2017 so
these bonds are issued between interest dates. The
market rate at the date of issue is also 9%. For simplicity,
use a 360-day year and 30 day months for all
calculations.
Date 13.) Credit Account Title
Debit
7/1/2017 Account to debit
Amount
Account to credit
Account to credit
10/1/2017 Account to debit
Amount
Account to debit
Amount
Account to credit Credit
Amount
Amount Amount On April 1, 2017 Alpha Company sells $2,750,000 face value of 9% 10year bonds which call for semiannual interest payments. The bonds are
dated April 1, 2017 so these bonds are issued on an interest date. The
bonds were priced at $2,936,876 and had a market rate at the date of
issue of 8%. Use the straight line method of amortization of any bond issue of 8%. Use the straight line method of amortization of any bond
premium or discount. For simplicity, use a 360-day year and 30 day
months for all calculations. Date Account Title
Debit
4/1/2017 Account to debit
Amount
Account to debit
Amount
Account to credit
10/1/2017 Account to debit
Amount
Account to credit
Account to credit Credit Amount
Amount
Amount ins 10 multiple-choice questions worth 5 points each. Problem 1 is worth 20
ter will automatically grade the multiple-choice questions (1-10), but grading
instructor may grant partial credit on short-answer questions for less than
g, and you can save the quiz before submitting. Once you have submitted the
your answers to the correct answers. Paid-in Capital in Excess of Par, $1,420,000. Based on this information, the _______________. ed stock at $40 par value. No dividends have been paid to any
to common shareholders on December 31, 2017. What dividend
ny distribution is made to common stockholders? 0 shares of Treasury Stock.
was $28 immediately prior to the
k dividend is: ares of Treasury Stock. Management declares a 12%
he stock dividend declaration. The journal entry for the n market for $17 per share. Later, the company resells
try for the sale? 15 per share to acquire 11,000 shares and will treat this
r, and on December 31, the market value of Jones stock
on December 31? 9 per share. ny incorporate and file
s 800 shares of newly
gal bill rendered. The
as $33,000. lared on June 10. poration on January 3,
0,000 shares of $6 par
ny has the following
ns. ember 15 is paid.
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Posted 20 Jun 2017 07:06 AM
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