Multiple Choice Question 62

On January 1, 2018, Marigold Corp. granted Di Williams, an employee, an option to buy 400 shares of Marigold Co. stock for $30 per share, the option exercisable for 5 years from the date of grant. Using a fair value option pricing model, the total compensation expense is determined to be $5900. Williams exercised his option on September 1, 2018, and sold his 400 shares on December 1, 2018. Quoted market prices of Marigold Co. stock during 2018 were:

January 1	$30 per share
September 1	$36 per share
December 1	$40 per share

The service period is for two years beginning January 1, 2018. As a result of the option granted to Williams, using the fair value method, Marigold should recognize compensation expense for 2018 on its books in the amount of

$6500.

$5900.

$0.

$2950.

Multiple Choice Question 123

Sheffield Corp. has 2940000 shares of common stock outstanding on December 31, 2017. An additional 149000 shares of common stock were issued on July 1, 2018, and 309000 more on October 1, 2018. On April 1, 2018, Sheffield issued 6500, $1,000 face value, 8% convertible bonds. Each bond is convertible into 40 shares of common stock. No bonds were converted into common stock in 2018. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively, for the year ended December 31, 2018?

3091750 and 3286750

3091750 and 3091750

3091750 and 3085750

3406750 and 3586750

Multiple Choice Question 80

On January 3, 2017, Wildhorse Company acquires $473000 of Adam Companys 10-year, 10% bonds at a price of $502090 to yield 8%. Interest is payable each December 31. The bonds are classified as held-to-maturity. Assuming that Wildhorse Company uses the straight-line method, what is the amount of premium amortization that would be recognized in 2019 related to these bonds?

$6562

$2909

$7133

$7700

Multiple Choice Question 109 At December 31, 2018, Sheridan Corporation had the following debt securities that were purchased during 2018, its first year of operation: Fair Value Unrealized Gain (Loss) Cost Trading Securities: $85000 $ 70000 $(15000) Security 24000 29000 5000 Totals $109000 $99000 $(10000) Available-for-Sale Securities: $76000 $88000 Security $12000 91000 58000 (33000) $167000 $146000 $(21000) Totals All market declines are considered temporary. Fair value adjustments at December 31, 2018 should be established with a corresponding charge against Income Stockholders' Equity 0 $10000 $ 0 0 $-21000 $ 0 0 $10000 $-45000 0 $10000 $21000 Multiple Choice Question 98 The summarized balance sheets of Ivanhoe Company and Dobbs Company as of December 31, 2018 are as follows: IvanhoeCompany Balance Sheet December 31, 2018 $2000000 Assets Liabilities Capital stock $200000 1000000 800000 Retained earnings $2000000 Total equities Dobbs Company Balance Sheet December 31, 2018 $1400000 Assets Liabilities Capital stock $310000 950000 140000 Retained earnings $1400000 Total equities If Ivanhoe Company acquired a 30% interest in Dobbs Company on December 31, 2018 for $340000 and during 2019 Dobbs Company had net income of $140000 and paid a cash dividend of $50000, applying the equity method would give a debit balance in the Equity Investments (Dobbs) account at the end of 2019 of O $382000. $367000. $325000. $340000 O Multiple Choice Question 109 At December 31, 2018, Sheridan Corporation had the following debt securities that were purchased during 2018, its first year of operation: Fair Value Unrealized Gain (Loss) Cost Trading Securities: $85000 $ 70000 $(15000) Security 24000 29000 5000 Totals $109000 $99000 $(10000) Available-for-Sale Securities: $76000 $88000 Security $12000 91000 58000 (33000) $167000 $146000 $(21000) Totals All market declines are considered temporary. Fair value adjustments at December 31, 2018 should be established with a corresponding charge against Income Stockholders' Equity 0 $10000 $ 0 0 $-21000 $ 0 0 $10000 $-45000 0 $10000 $21000 Multiple Choice Question 98 The summarized balance sheets of Ivanhoe Company and Dobbs Company as of December 31, 2018 are as follows: IvanhoeCompany Balance Sheet December 31, 2018 $2000000 Assets Liabilities Capital stock $200000 1000000 800000 Retained earnings $2000000 Total equities Dobbs Company Balance Sheet December 31, 2018 $1400000 Assets Liabilities Capital stock $310000 950000 140000 Retained earnings $1400000 Total equities If Ivanhoe Company acquired a 30% interest in Dobbs Company on December 31, 2018 for $340000 and during 2019 Dobbs Company had net income of $140000 and paid a cash dividend of $50000, applying the equity method would give a debit balance in the Equity Investments (Dobbs) account at the end of 2019 of O $382000. $367000. $325000. $340000 O