Please tell me how to solve numbers 18,19,20. Please just list computations so I understand what needs to be done in order. Also on the last page how do I find the dividend paid.Thank you!

Financial Accounting Sample exam 1. 4. Securities and Exchange Commission. Accounting Principles Board. Financial Accounting Standards Board. Internal Revenue Service. An accountant has debited an asset account for $1,000 and credited a liability account for $500. What can be done to complete the recording of the transaction? a. b. c. d. 3. Sarath The primary accounting standard-setting body in the United States is the a. b. c. d. 2. Fall 2009 Nothing further must be done. Debit an owner's equity account for $500. Debit another asset account for $500. Credit a different asset account for $500. Which of the following correctly identifies normal balances of accounts? a. Assets Liabilities Stockholders' Equity Revenues Expenses Debit Credit b. Assets Liabilities Stockholders' Equity Revenues Expenses Debit Credit c. Assets Liabilities Stockholders' Equity Revenues Expenses Credit Debit d. Assets Liabilities Stockholders' Equity Revenues Expenses Debit Credit Credit Debit Credit Credit Credit Credit Debit Credit Debit Credit Credit Debit The necessity of making adjusting entries relates mostly to the a. economic entity assumption. b. time period assumption. c. going concern assumption. d monetary unit assumption Financial Accounting Sample exam Fall 2009 Sarath 5. Which of the following errors will cause a trial balance to be out of balance? The entry to record a payment on account was a. not posted at all. b. posted as a debit to Cash and a credit to Accounts Payable. c. posted as a debit to Cash and a debit to Accounts Payable. d. posted as a debit to Accounts Receivable and a credit to Cash. 6. Riodan Company sold old equipment for $35,000. The equipment had a cost of $70,000 and accumulated depreciation of $42,000. The entry to record the sale of the equipment would include a a. loss on disposal of $35,000. b. gain on disposal of $35,000. c. loss on disposal of $7,000. d. gain on disposal of $7,000. 7. Barker Company's records show the following for the month of January: Total Retained Earnings at January 1 ....................................... $600,000 Total Retained Earnings at January 31 ..................................... 900,000 Total Revenues ......................................................................... 1,005,000 Total Dividends Declared .......................................................... 45,000 Total expenses for January were a. $960,000. b. $1,005,000. c. $705,000. d. $660,000. 8. The following information is available for Lighten Company: Sales $130,000 Ending Merchandise Inventory12,000 Purchases 100,000 Freight-in $10,000 Purchase Returns and Allowances 5,000 Beginning Merchandise Inventory 15,000 Lighten's cost of goods sold is a. $125,000. b. $120,000. c. $108,000. d. $105,000. 9. If merchandise is sold for $2,000 subject to credit terms of 2/10, n/30, the entry to record collection in full within the discount period would include a a. credit to Sales Discounts for $40. b. credit to Cash for $1,960. c. credit to Accounts Receivable for $40. d. none of the above. Financial Accounting Sample exam Fall 2009 Sarath 10. If ending inventory is understated, net income and assets will be Net Income Assets a. Understated Understated b. Overstated Overstated c. Understated Unaffected d. None of the above. 11. The inventory methods that result in the most current costs in the income statement and balance sheet are a. b. c. d. Income Statement FIFO LIFO LIFO FIFO Balance Sheet FIFO FIFO LIFO LIFO 12. All of the following are intangible assets except a. patents. b. land improvements. c. goodwill. d. franchise fees 13. The cost of intangible assets should be a. amortized over the assets' estimated useful life, or legal life, whichever is shorter. b. amortized over a period not exceeding 5 years. c. amortized over the assets' estimated useful life. d. charged to an expense account at acquisition. Questions 14 and 15 are based on the following information: Bono Company recently incurred the following costs: (1) Purchase price of land and dilapidated building (2) Real estate broker's commission (3) Net demolition costs of dilapidated building (4) Excavation costs for new building (5) Architect's fees and building permits (6) Costs associated with new building construction (7) Costs associated with new furniture and equipment (8) Actual interest costs during building construction (9) Actual interest cost after completion of building construction (10) Costs of walks, driveways, and parking lot 14. The building should be recorded on Bono's books at (4),(5) (6) & (8) a. $880,000. b. $924,000. c. $963,000. d. $1,192,000. 15. Land should be recorded on Bono's books at (1), (2), (3) a. $350,000. b. $364,000. c. $403,000. d. $433,000. $350,000 14,000 39,000 44,000 30,000 950,000 250,000 168,000 120,000 55,000 Financial Accounting Sample exam Fall 2009 Sarath 16. Thomas Company purchased equipment for $640,000 cash on January 1, 2007. The estimated life is 5 years or 1,000,000 units; salvage value is estimated at $-0-. Actual activity was 180,000 units in 2007, and 200,000 units in 2008. Which of the following is true:? a. Under the straight-line method the depreciation expense in 2007 would be different from that in 2008 b. Under the units-of-activity method, the depreciation in 2008 would be $128,000 c. Under the double declining method, the depreciation in 2008 would be $160,000 d. Under the double declining method, the depreciation in 2007 would be $128,000 e. Under the units-of-activity method, the depreciation in 2007 would be $128,000 17. Elston Company had a beginning inventory of 200 units at a cost of $12 per unit on August 1. During the month, the following purchases and sales were made. Purchases August 4 250 units at $13 August 15 350 units at $15 August 28 200 units at $14 August August August August 7 11 17 24 Sales 150 units 100 units 250 units 300 units a. The cost of goods sold under LIFO periodic would be $7,200 b. The cost of goods sold under FIFO would be $12,300 c. The end inventory under FIFO would be $2,400 d. The end inventory under LIFO periodic would be $2,400 ABC corp. had the following balances on January 1, 2009: Accounts Receivable of $1,800; Allowance for Doubtful Accounts $300. During the year, ABC recorded Sales of $6,000, cash collections of $4,600, Bad Debt expense of $400 and $600 of write-offs. The ending balances for 2009 are 18. a. Accounts Receivable $2,600; Allowance for Doubtful Accounts $100. b. Accounts Receivable $2,000; Allowance for Doubtful Accounts $700. c. Accounts Receivable $2,000; Allowance for Doubtful Accounts $100. d. Accounts Receivable $2,200; Allowance for Doubtful Accounts $700. 22. All the answers above are wrong. 19. Travel Inc had issued ten-year semi-annual bonds of Face value $1,000,000 and coupon rate 10% at 98. a. The interest expense recorded over the life of the bond would be $1,000,000 b. The cash interest paid over the life of the bond would be $980,000 c. The interest expense recorded over the life of the bond would be $1,020,000 d. The interest expense recorded over the life of the bond would be $980,000 20. On July 1, 2009 a semi-annual $600,000 bond with coupon rate of 10% had a Net book value of $550,798. The bond had been issued at a Financial Accounting Sample exam Fall 2009 Sarath discount rate of 14%. On January 1, after the semiannual interest payment, the bond was called at a price of 95. The bond retirement on January 1 would lead to : a) A gain of $30,000; d) a loss of $10,647 b) A loss of $30,000 c) A loss of $19,202 Questions 21-24 are based on the following information: Nolan Company entered into the transactions listed below during 2008-2009 Jan. 10 Purchased 500 shares of Adams Company common stock for $35,000 as a shortterm investment in equity securities. Broker fees were $350 Apr. 6 Purchased 1,000 shares of Linton Company common stock for $45 per share as a short-term investment in equity securities. Broker fees were $450. Sept. 20 Sold 250 shares of Adams Company common stock for $18,800. No broker fees were charged on sales. Dec. 31 Jan 10 Use the following information for year-end adjusting entries: Fair value per share: Adams Company Common Stock$68 per share. Linton Company Common Stock$44 per share. Sold 250 shares of Adams company at $62 per share Nolan classifies the Linton Securities as AFSS and Adams as trading securities. 21. On January 10 Nolan would record a. b. c. d. 22. On September 20, Nolan would record a(n): a. b. c. d. 23. A realized gain of $1,300 A realized gain of $1,125 250 shares are worth of 35,350 An unrealized gain of $1,300 An unrealized gain of $1,125 On December 31, the adjusting entry would affect pre-tax income as follows: a. b. c. d. e. 24. A debit to Trading Securities of $35,350 A debit to Trading Securities of $35,000 A debit to AFSS of $35,350 A debit to AFSS of $35,000 Reduce by $2,125 Reduce by $1,500 Reduce by $ 675 Reduce by $1,450 Reduce by $2,800 On January 10, 2009, which of the following is true: Financial Accounting Sample exam a. b. c. d. e. Fall 2009 Sarath Nolan would record a(n) Unrealized loss of $2,000 Nolan would record a(n) Realized loss of $2,175 Nolan would record a(n)Realized loss of $1,675 Nolan would record a(n)Realized loss or $1,500 All of the above are false 25. Which of the following would not be included in the operating activities section of a statement of cash flows? a. b. c. d. Cash inflows from returns on loans (i.e., interest) Cash inflows from returns on equity securities (i.e., dividends) Cash outflows to governments for taxes Cash outflows to reacquire treasury stock Financial Accounting Sample exam Fall 2009 Sarath Richman Corporation has 120,000 shares of $5 par value common stock outstanding on Jan 1 2008. The shares had been issued at a price of $8 per share. In addition, the retained earnings balance on January 1, 2008 was $412,000. The following transactions took place in 2008: March 31 Issued 2,000 shares of 9% preferred stock of par value $100 for $108 paid annually June 1 Declared and paid a 15% stock dividend when the price per share was $12. June 30 Bought 5,000 shares at a price of $14 to hold in treasury December 1 Declared (but did not pay) dividends of $1 per share. Instructions 1. Prepare the necessary Journal entries for each of these transactions 2. Calculate the Balance in Retained earnings on December 1 March 31 June 1 Dr Cash 216,000 Cr Preferred Stock Dr Retained Earnings $216,000 200,000 Cr APIC preferred stock 16,000 cr Common Stock $90,000 cr APIC Common Stock $126,000 June 30 December 1 Dr Treasury Stock $70,000 Cr Cash $70,000 dr Retained Earnings $138,000 cr Dividends Payable $138,000 Note that there were 120,000 shares on Jan 1 and 18,000 shares were issued on June 1 I am happy with a debit to retained earnings on December 1 although it is possible to debit a dividends declared account (you could also debit a stock dividends declared on June 1). I am happy with the more conceptual entry \"debit retained earnings\" as all dividends are a return of value to investors. Financial Accounting Sample exam Fall 2009 Sarath The comparative balance sheet for Mott Company appears below: MOTT COMPANY Comparative Balance Sheet Dec. 31, 2008 Assets Cash............................................................................................. Accounts receivable..................................................................... Inventory....................................................................................... Prepaid expenses......................................................................... Building........................................................................................ Accumulated depreciationbuilding............................................. Total assets............................................................................. Dec. 31, 2007 $50,000 6,000 11,000 2,000 24,000 (3,000) $90,000 $12,000 8,000 7,000 3,000 20,000 (2,000) $48,000 $ 1,000 13,000 33,000 43,000 $90,000 $ 4,000 14,000 18,000 12,000 $48,000 Liabilities and Stockholders' Equity Accounts payable......................................................................... Long-term note payable................................................................ Common stock............................................................................. Retained earnings........................................................................ Total liabilities and stockholders' equity.................................. The income statement for the year is as follows: MOTT COMPANY Income Statement For the Year Ended December 31, 2008 Sales (all on credit)....................................................................... Expenses and losses Cost of goods sold.................................................................. Operating expenses, exclusive of depreciation....................... Depreciation expense............................................................. Interest expense..................................................................... Loss on sale of land and building............................................ Income taxes.......................................................................... Total expenses and loss.................................................... Net income................................................................................... $280,000 $184,000 42,300 3,000 1,200 5,500 9,000 245,000 $ 35,000 Land costing $15,000 was acquired with cash and subsequently sold for $12,500 cash. Buildings costing $12,000 was purchased. Instructions 1. Prepare a statement of operating cash flows for the year ended December 31, 2008 under the indirect method and the direct method 2. Calculate the amount of money realized from the sale of the building 3. What were the dividends paid in cash? Financial Accounting Sample exam Fall 2009 Sarath Cash flows from operating activities Net income................................................................................... Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense.......................................................... Decrease in accounts receivable......................................... Increase in inventory............................................................ Decrease in prepaid expenses............................................ Decrease in accounts payable............................................. Loss on sale of land............................................................. Net cash provided by operating activities.................... Income statement Line Adjustment Total Cash Flow Statement Line Revenue Cash From Customers COGS Cash to suppliers Operating Expenses Cash Op. Exp (paid to employees) Depreciation Cash paid for Depreciation Loss on Sale of Equipment Cash obtained from sale Interest Expense Cash Interest ( paid to Financiers Financial Accounting Sample exam Tax Expense Fall 2009 Sarath Cash Taxes ( paid to Govt) Cash From Operations 2. Cash From Sale of Building 3. Cash Dividends paid ___________________________ ___________________________