Hi I could use some help on the 4 problems in the excel sheet. There are multiple questions for each answer. Also, please put formulas in the spreadsheet. I'm trying to get better with Excel and it helps me to compare my answers.

Exam II, Part II Instructions: Complete the problems on the spreadsheet. Use formulas to calculate all cells that require a numeric answer. Repond to the essay questions directly below the questions. # Points Problem 1 Problem 2 Problem 3 Problem 4 Problem 5 10 6 12 12 10 50 points CAVEATS: Posting this exam in part or in total on any Website outside of the UMUC Website is a violation of academic integrity in the MS Accounting degree programs. Posting your answers to part or all of this exam on any Website outside of UMUC is a violation of academic integrity in the MS Accounting degree programs. Speaking to any other person or entity about the content of this exam or answers in any way is a violation of UMUC's Policy on Academic Integrity. All suspected violations of academic integrity in the MS Accounting degree programs and or UMUC Policy 150.25 will be turned into the graduate Dean's office for review. The minimum penalty for violating Policy 150.25 on this exam is failing the exam. The maximum penalty for violating Policy 150.25 is expulsion from UMUC's graduate school. Your professor is required to report all suspected cases of academic integrity violations in the MS Accounting degree programs and or UMUC's Policy 150.25. You are strongly advised to review Policy 150.25 and the Graduate Accounting and Financial Manage Academic Integrity Pledge in advance of taking this exam. Problem I - worth 10 points On January 1, 2017, XYZ Company, purchased new equipment to produces widgets. Cost of equipment $ Estimated useful life in years Estimated salvage value Estimated widgets to be produced in first ye Due to demand, production of widgets will decrease by 1,000 units/year until the equipment is completely depreciated. The following depreciation methods may be used: (1) Straight-line (2) Double-declining balance (3) Sum-of-years'-digits (4) Units-of-output Required: Compute depreciation using the following methods: a) Straight line b) Double declining balance 1) c) Sum of the Years digits, and d) Units of Production. 1,260,000 5 60,000 12,000 1,000 7 Points a) Straight-line 1 b) Double-declining balance 2 c) 2 Sum-of-years'-digits d) Units-of-output 2) Select the depreciation method that would result in the highest net income on an Income Statement dated: For the 3-years ending 12/31/19. Highlight your answer . 1 1 Straight line a) b) Double declining balance 3) c) Sum of the years digist d) Units of production Using the depreciartion method selected in #2 above, prepare T-Accounts for Depreciation Expense, Accumulated Depreciaition, and Income Summary. Include the ending balance of all T-Accounts assuming closing entries are made at the end of each year. Depreciation Expense Accumulated Depreciation Income Summary 2 4) Prepare a written note to a client explaining why you chose the depreciation selected in #2 above. Total possible points = 1 10 Problem II - worth 6 points DEF, Inc. sells widgets with a warranty under which customers are covered for the cost of repairs of any manufacturing defects that become apparent within the first six months after purchase. Hint: this problem may require FASB Codification research. Required: a) Points DEF, Inc. estimates that if defects were detected in all products sold, repair costs would range from: Low end of range $2,000,000 Minor repairs High end of range $4,000,000 Major repairs 2 Assume no particular outcome within the range of $2 to $4 million is better than another. Prepare the required journal entry. b) Using the same facts from part a) above, assume DEF, Inc. performs an analysis on the historical data of returns and estimates (based on historical data) finding that: Estimated to be: Goods sold with no defects Goods sold with minor defects Goods sold with major defects Total possible points = 75% of all goods sold 20% of all goods sold 5% of all goods sold Prepare the required journal entry. 4 6 Problem III - worth 12 points To raise money for a capital improvement to its national headquarters, JMP Inc. issued $2,000,000 in bonds on January 1, 2017. Hint: you may use time value of money tables to solve this problem. Assume the following: Amount of Bonds Issued Face of Bond Maturity date Contract rate of interest Interest payments $2,000,000 $1,000 20 years 5% Semi annual Required: a) How many bonds were issued? Points 1 Prepare the journal entry to record the issuance of the bonds on January 1, 2017 assuming the b) bonds were issued at face. 1 Prepare the journal entry to record the issuance of the bonds on January 1, 2017 assuming the c) bonds: Were issued at: 98 1 Prepare the journal entry to record the issuance of the bonds on January 1, 2017 assuming the d) bonds were issued at: Were issued at: 104 2 e) Explain different approaches to amortizing bond discount and premium. 1 f) Identify the amortization method preferred by FASB and explain why it's preferred. 1 Assume 5 years have passed since the bonds were originally issued and they are now trading in the secondary market. How much would a seller be willing to sell for and a buyer be willing to pay for g) the bonds originally issued assuming the following: Face amount of bonds sold: $100,000 4 Market rate of interest on investments of similar risk: 4% Describe the relationship between the contract and market rate of interest with respect to how a h) differential between market and contract rates affects the selling price of bonds. Total possible points = 1 12 Problem IV - worth 12 points EHL, Inc. began operations in 2010 and has the following Capital Stock: EHL, Inc. Capital Stock: Preferred Stock: # Shares Authorized shares of cumulative, non-participatory preferred stock 80,000 Issued shares of prefered stock 60,000 Outstanding shares of preferred stock 30,000 Common Stock: 6% Par value $10 # Shares Authorized shares of $1 par value common stock Issued shares of common stock 50,000 40,000 Outstanding shares of common stock 10,000 Required: a) Stated Dividend Rate Points Compute the amount of Preferred Stock dividends. 1 Total Preferred Stock Dividends = b) On January 1, 2017, the Board of Directors declared dividends of $ 35,000 1 Prepare the journal entry for the declaration of the dividends. c) On March 31, 2017, the dividends are disbursed to stockholders of record. Determine the allocation of dividends to Preferred and Common Stockholders. 1 d) The Board of directors did not declare dividends during 2018. Determine the allocation of dividends to Preferred and Common Stockholders. 2 e) On June 8, 2019 the Board of Directors declared dividends of $110,000 3 $100,000 2 Determine the allocation of dividends to Preferred and Common Stockholders. f) The following year, on November 30, 2020, the board declared dividends of Determine the allocation of dividends to Preferred and Common stockholders. g) Explain the advantages and disadvantages of investing in preferred stock. 1 h) Describe the difference between participating and non-participating preferred stock. Total possible points = 1 12 Problem V - worth 10 points PMR, Inc. was incorporated in Delaware on January 1, 2015. PMR Inc. Corporate Stock as of December 31, 2017 Par value $5 per share 1,000,000 Shares of Common Stock Authorized Issued & outstanding 500,000 Shares of Common Stock Two years later, the Board of Directors created a strategic plan for global expansion of its main product. On January 1, 2017, PMR issued 1,000 convertible bonds to begin implementing the plan. The corporation did quite well its first two years of operations. Hint: ignore income tax effects for this problem. Assume: Net Income Bonds issued Bond term Bond face value $ $ 275,750 2,100 convertible bonds 5 years 1,000 Bond contract rate of Interest 5% Convertible into 200 shares of common stock for each $1,000 bond a) Required: Calculate basic EPS in 2017. b) Calculate diluted EPS in 2017. Points 3 5 c) In your own words, explain the difference between simple and diluted earnings per share. d) In your own words, explain how investors use EPS and Diluted EPS to evaluate alternative investment opportunities. Total possible points = 1 1 10