Final Exam Review

Topics: Generally Accepted Accounting Principles, Corporate finance, Balance sheet Pages: 5 (1356 words) Published: September 12, 2013
-------------------------------------------------
FINAL EXAM REVIEW
BE15-4. Lump-Sum Sales
Ravonette Corporation issued 300 shares of $10 par value common stock and 100 shares of $50 par value preferred stock for a lump sum of $13,500. The common stock has a market price of $20 per share, and the preferred stock has a market price of $90 per share. Prepare journal entry.

| | |
P15-2. Treasury Stock ProblemClemson Company had the following stockholders' equity as of January 1, 2012. Common stock, $5 par value, 20,000 shares issued| $100,000| Paid-in capital in excess of par—common stock| 300,000| Retained earnings| 320,000|

Total stockholders' equity| $720,000|
|
|
Feb. 1| Clemson repurchased 2,000 shares of treasury stock at a price of $19 per share.| Mar. 1| 800 shares of treasury stock repurchased above were reissued at $17 per share.| Mar. 18| 500 shares of treasury stock repurchased above were reissued at $14 per share.| Apr. 22| 600 shares of treasury stock repurchased above were reissued at $20 per share.|

|
|
| Stock Dividend Problem (Page 17 in Moodle Ch. 15 Notes)| | |
|
CS, $5 par, 40,000 shares issued and outstanding| $ 200,000| Paid-in capital in excess of par| 835,000|
Retained earnings| 2,160,000|

Shares of the company’s stock are selling at this time at $22. 1. A 10% stock dividend is declared and issued.
2. A 50% stock dividend is declared and issued.
3. A 2-for-1 stock split is declared and issued.

E3.9. Adjusting Entries
Supplies| Accounts Receivable|
Beg. Bal.| 800| 10/31| 470| 10/17| 2,100|  |  |
 |  |  |  | 10/31| 1,650|  |  |
|
Salaries and Wages Expense| Salaries and Wages Payable|
10/15| 800|  |  |  |  | 10/31| 600|
10/31| 600|  |  |  |  |  |  |
|
Unearned Service Revenue| Supplies Expense|
10/31| 400| 10/20| 650| 10/31| 470|  |  |
|
Service Revenue|
 |  | 10/17| 2,100|
 |  | 10/31| 1,650|
 |  | 10/31| 400|
|
|
|

Instructions: Reconstruct 3 transaction entries and 4 adjusting entries.

P4.3. (Irregular Items)
Maher Inc. reported income from continuing operations before taxes during 2012 of $790,000. Additional transactions occurring in 2012 but not considered in the $790,000 are as follows. |
| 1.   | The corporation experienced an uninsured flood loss (extraordinary) in the amount of $90,000 during the year. The tax rate on this item is 46%.| 2.   | At the beginning of 2010, the corporation purchased a machine for $54,000 (salvage value of $9,000) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2010, 2011, and 2012 but failed to deduct the salvage value in computing the depreciation base.| 3.   | Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax).| 4.   | When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $46,000 (the gain is nontaxable).| 5.   | The corporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations.| 6.   | The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2010 income by $60,000 and decrease 2011 income by $20,000 before taxes. The FIFO method has been used for 2012. The tax rate on these items is 40%.|

|

Instructions: Prepare an income statement for the year 2012 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 120,000 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) Time Value of...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about ACC 291 Final Exam
  • ACC 423 Final Exam Essay
  • ACC 291 Final Exam Essay
  • Essay on ACC 545 Final Exam
  • ACC 300 Final Exam Essay
  • Essay on Final Exam
  • ACC 300 Final Exam Essay
  • ACC 561 Final Exam Essay

Become a StudyMode Member

Sign Up - It's Free