University of Maryland, University College - ACCOUNTING 221Quiz1_Acct

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Multiple Choice Questions Select the best answer for the following questions. Each question is worth 5 points. Question 1 5 / 5 points A corporation has the following account balances: Common Stoc... k, $10 par value, $740,000; Paid-in Capital in Excess of Par, $1,850,000. Based on this information, the _______________. Question 2 5 / 5 points On January 2, 2015, Easton Corporation issued 50,000 shares of 5% cumulative preferred stock at $100 par value. No dividends have been paid to any shareholders since the formation of the corporation. Management wants to issue a dividend to common shareholders on December 31, 2016. What dividend amount, if any, must be paid to the preferred stockholders entitled before any distribution is made to common stockholders? Question 3 5 / 5 points The Frederick Company has 100,000 shares of $5 par common stock outstanding. Management declares (not pays) a 10% stock dividend. The market value of a share of common stock was $32 immediately prior to the stock dividend declaration. The journal entry is: Question 4 The Frederick Company has 100,000 shares of $5 par common stock outstanding. Management PAYS (not declares) a 10% stock dividend. The market value of a share of common stock was $32 immediately prior to the stock dividend declaration. The journal entry is: Question 5 5 / 5 points Cambridge Hat Company previously purchased 20,000 shares of treasury stock on the open market for $12 per share. Later, the company resells 10,000 shares for $14 per share. What is the journal entry for the sale? Question 6 5 / 5 points Smith Ventures Inc. purchased 10% of the outstanding stock of Jones Company. Smith paid $15 per share to acquire 8,000 shares and will treat this purchase as available-for-sale securities. Par value of the stock is 50 cents. Smith uses a calendar year, and on December 31, the market value of Jones stock is $17 per share. What is the entry Smith needs to make on December 31? Question 7 5 / 5 points Richmond Corporation has issued an outstanding common stock of 50,000 shares, $5 par value. On July 1, the company pays a 2-for-1 stock split. What are the legal capital and the par value of the stock immediately after the split? Question 8 On January 10, Acme Ventures Inc. purchased 30% of the outstanding stock of Gamma Ray Manufacturing Corp. The purchase was 30,000 shares at $10 per share. Acme received dividends from Gamma Ray in the amount of $15,000 on June 15 and again on December 15. Gamma reported net income for the year ended December 31 in the amount of $250,000. What is the journal entry, if any, that Acme needs to make dated December 31? Question 9 High Adventure Corp. issues $100,000 of 7%, 10-year bonds for 98. High Adventure uses the straight-line 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? Question 10 5 / 5 points On January 1, 2016, Towson Inc. issued $500,000, 20-year, 6% bonds at 101. Interest is payable semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2016, is: Journal Entries For this part of the quiz, you will be uploading your work through answer sheets. The instructions for how to upload your answer sheets are provided within each question. Salisbury Corporation formed a corporation on January 3, 2016, and is authorized to issue 500,000 shares of $10 par value common stock. The company has the following stock transactions. Instructions: Journalize the above transactions for Salisbury Corporation. Problem 1 Answer Sheet Instructions To submit your answers for this part of the exam, fill in the answer sheet and upload it to the exam. Download: Quiz 1 Problem 1 Answer Sheet • To upload your answer sheet, follow these instructions: • Click the Insert Stuff icon (first on the left). • Click Upload to retrieve the file from your computer and upload it. • For Link Text: (Your Name) Final Exam Answer Sheet • Click Add. (Ignore the Choose Destination prompt.) • Click OK. Question 11 View Feedback Question 12 This problem is worth 15 points. On July 1, 2016 Alpha Company sells $1,000,000 face value of 10% five year bonds which call for semiannual interest payments. The bonds are dated April 1, 2016 so these bonds are issued between interest dates. The market rate at the date of issue is also 10%. For simplicity, use a 360-day year and 30 day months for all calculations. 1. Record the journal entries for the issuance of the bonds 2. Record the journal entries for the first interest payment due on October 1, 2016. Assume that interest has not been accrued at each month end. Click here to download the Question 2 Answer Sheet. Question 12 . Question 13 On April 1, 2016 Alpha Company sells $1,000,000 face value of 10% five year bonds which call for semiannual interest payments. The bonds are dated April 1, 2016 so these bonds are issued on an interest date. The market rate at the date of issue is 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. 1. Record the journal entries for the issuance of the bonds 2. Record the journal entries for the first interest payment due on October 1, 2016. Assume that interest has not been accrued at each month end. [Show More]

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