QUESTION 1 On January 1, 2010, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, 2010. The December 31, 2011 carrying amount in the amortization table for this installment note will be equal to: 1. $27,635 2. $26,000 3. $21,642 4. $28,402

QUESTION 2 Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $178,000 and accumulated depreciation of $96,000. The partners agree that the equipment is to be priced at $67,000, that $3,900 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,700 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Fallows contributes cash of $35,000 and merchandise inventory of $67,000. The partners agree that the merchandise inventory is to be priced at $67,000. Journalize the entries to record in the partnership accounts (a) Bartons investment and (b) Fallows investment. Path: pWords:0 10 points Save Answer

QUESTION 3 A disadvantage of partnerships is the mutual agency of all partners. 1. True 2. False

QUESTION 4 A partnership is subject to federal income taxes. 1. False 2. True

QUESTION 5 The reduction in the par or stated value of common stock, accompanied by the issuance of a proportionate number of additional shares, is called a stock split. 1. True 2. False

QUESTION 6 By-laws are part of the business's charter or articles of incorporation. 1. True 2. False

QUESTION 7 On January 1, 2010, Gemstone Company obtained a $280,000, 10-year, 11% installment note from Guarantee Bank. The note requires annual payments of $47,544, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $30,800 and principal repayment of $16,744. The journal entry to record the payment of the first annual amount due on the note would include: 1. a credit to cash of $16,744 2. a debit to Interest Expense of $47,544 3. a credit to Interest Payable of $30,800 4. a debit to Notes Payable of $16,744

QUESTION 8 Everett, Miguel, and Ramona are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: Everett, $50,000 Cr.; Miguel, $40,000 Dr.; and Ramona, $30,000 Cr. How much cash should be distributed to Everett assuming that Miguel pays the deficiency? 1. $20,000 2. $30,000 3. $40,000 4. $50,000 2 points (Extra Credit) Save Answer

QUESTION 9 On June 30, 2013, Arlington Company issued $1,900,000 of 10-year, 3% bonds, dated June 30, for $1,970,000. Present entries to record the following transactions: Arlington Company (1) Issuance of bonds. (2) Payment of first semiannual interest on December 31, 2013. (3) Amortization by straight-line method of bond premium on December 31, 2013. Path: pWords:0 10 points Save Answer

QUESTION 10 Everett, Miguel, and Ramona are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: Everett, $50,000 Cr.; Miguel, $40,000 Dr.; and Ramona, $30,000 Cr. How much cash is available for distribution to the partners? 1. $90,000 2. $40,000 3. $120,000 4. $30,000 2 points (Extra Credit) Save Answer

QUESTION 11 A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be 1. 13,333 shares 2. 40,000 shares 3. 120,000 shares 4. 80,000 shares 2 points (Extra Credit) Saved

QUESTION 12 Callable bonds are redeemable by the issuing corporation within the period of time and at the price stated in the bond indenture. 1. False 2. True 4 points Saved

QUESTION 13 The higher the times interest earned ratio, the better the creditors protection. 1. True 2. False 4 points Save Answer

QUESTION 14 The Miracle Corporation issues 1,000, 10-year, 8%, $1,000 bonds dated January 1, 2009, at 96. The journal entry to record the issuance will show a 1. credit to Cash for $960,000. 2. debit to Discount on Bonds Payable for $40,000. 3. credit to Bonds Payable for $960,000. 4. debit to Cash of $1,000,000. 4 points Save Answer

QUESTION 15 Bonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If the issuing corporation redeems the bonds at 103, what is the amount of gain or loss on redemption? 1. $1,200 gain 2. $17,000 loss 3. $1,200 loss 4. $17,000 gain 4 points Save Answer

QUESTION 16 When the market rate of interest was 11%, Valley Corporation issued $100,000, 8%, 10-year bonds that pay interest semiannually. Using the straight-line method, the amount of discount or premium to be amortized each interest period would be 1. $1,793 2. $896 3. $17,926 4. $4,000 4 points Save Answer

QUESTION 17 A corporation issues $100,000, 10%, 5-year bonds on January 1, 2009, for $104,200. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2009, is 1. $5,000. 2. $10,420. 3. $5,420. 4. $4,580. 4 points Save Answer

QUESTION 18 Balance sheet and income statement data indicate the following: Bonds payable, 8% (issued 1990, due 2015) $1,200,000 Preferred 8% stock, $100 par (no change during the year) 200,000 Common stock, $50 par (no change during the year) 1,000,000 Income before income tax for year 320,000 Income tax for year 80,000 Common dividends paid 60,000 Preferred dividends paid 16,000 Based on the data presented above, what is the number of times bond interest charges were earned (round to two decimal places)? 1. 5.67 2. 4.33 3. 3.50 4. 3.24 4 points Save Answer

QUESTION 19 Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on redemption? 1. $500 loss 2. $500 gain 3. $15,500 loss 4. $15,500 gain 4 points Save Answer

QUESTION 20 The balance in Discount on Bonds Payable that is applicable to bonds due in 2015 would be reported on the balance sheet in the section entitled 1. intangible assets 2. current assets 3. current liabilities 4. long-term liabilities 4 points Save Answer

QUESTION 21 When callable bonds are redeemed below carrying value 1. Retained Earnings is debited 2. Retained Earnings is credited 3. Gain on Redemption of Bonds is credited 4. Loss on Redemption of Bonds is debited 4 points Save Answer

QUESTION 22 On February 13, Epperson Company issue for cash 90,000 shares of no-par common stock (with a stated value of $105) at $120. On September 9, Epperson issued at par 30,000 shares of 1%, $50 par preferred stock at par for cash. On November 23, Epperson issued for cash 8,500 shares of 1%, $65 par preferred stock at $70. Required: Journalize the entries to record the February 13, September 9 and November 23 transactions. Path: pWords:0 10 points Save Answer

QUESTION 23 The two ways that a corporation can be classified by ownership are 1. stock and non-stock. 2. majority and minority. 3. inside and outside. 4. for profit or not-for-profit. 4 points Save Answer

QUESTION 24 The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called 1. outstanding stock 2. authorized stock 3. treasury stock 4. issued stock 4 points Save Answer

QUESTION 25 On January 1, 20xx, Swenson Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Swenson purchased 3,000 shares of treasury stock for $21 per share and later sold the treasury shares for $24 per share on March 1, 20xx. The journal entry to record the purchase of the treasury shares on February 1, 20xx, would include a 1. debit to a loss account for $9,000 2. credit to a gain account for $9,000. 3. credit to Treasury Stock for $63,000. 4. debit to Treasury Stock for $63,000. 4 points Save Answer

QUESTION 26 The excess of issue price over par of common stock is termed a(n) 1. premium 2. deficit 3. income 4. discount 4 points Save Answer

QUESTION 27 If Everly Company issues 1,000 shares of $5 par value common stock for $75,000, the account 1. Paid-in Capital in excess of Par Value will be credited for $5,000. 2. Paid-in Capital in excess of Par Value will be credited for $70,000. 3. Cash will be debited for $70,000. 4. Common Stock will be credited for $75,000. 4 points Save Answer

QUESTION 28 The date on which a cash dividend becomes a binding legal obligation is on the 1. date of record. 2. declaration date. 3. last day of the fiscal year end. 4. payment date. 4 points Save Answer

QUESTION 29 The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a 1. preferred dividend 2. liquidating dividend 3. stock split 4. stock option 4 points Save Answer

QUESTION 30 The cumulative effect of the declaration and payment of a cash dividend on a companys financial statements is to 1. decrease total assets and stockholders equity. 2. increase total expenses and total liabilities. 3. increase total assets and stockholders equity. 4. decrease total liabilities and stockholders equity. 4 points Save Answer

QUESTION 31 Which of the following is not a characteristic of a general partnership? 1. dissolution occurs only when all partners agree 2. mutual agency 3. partners share equally in net income or net losses unless an agreement states differently 4. the partnership is created by a contract 4 points Save Answer

QUESTION 32 A ratio of 2:2:1 is the same as 1. both (a) and (c) 2. 2/10:2/10:1/20 3. 20%:20%:10% 4. 2/5:2/5:1/5 4 points Save Answer

QUESTION 33 Carla and Eliza share income equally. During the current year the partnership net income was $40,000. Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. At the beginning of the year, the capital account balances were: Carla capital, $42,000; Eliza capital, $55,000. Elizas capital account balance at the end of the year is 1. $52,000 2. $58,000 3. $75,000 4. $82,000 4 points Save Answer

QUESTION 34 When a new partner is admitted to a partnership 1. a bonus may be attributable to the old partner 2. a bonus agreed upon by the partners is recorded as an asset so long as the amount is within the range set by the SEC 3. a bonus is not recorded 4. a bonus may only result from more cash being given by the new partner than the value of the of the assets being purchased 4 points Save Answer

QUESTION 35 Singer and McMann are partners in a business. Singers original capital was $40,000 and McManns was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann respectively and 10% interest on original capital. If they agree to share remaining profits and losses on a 3:2 ratio, what will McManns share of the income be if the income for the year was $15,000? 1. $6,000 2. $14,000 3. $9,400 4. $12,600 4 points Save Answer

QUESTION 36 Benson and Orton are partners who share income in the ratio of 2:3 and have capital balances of $30,000 and $50,000 respectively. Ramsey is admitted to the partnership and is given a 10% interest by investing $20,000. What is Ortons capital balance after admitting Ramsey? 1. $44,000 2. $20,000 3. $56,000 4. $34,000 4 points Save Answer

QUESTION 37 Franco and Elisa share income equally. During the current year the partnership net income was $40,000. Franco made withdrawals of $12,000 and Elisa made withdrawals of $17,000. At the beginning of the year, the capital account balances were: Franco capital, $42,000; Elisa capital, $58,000. Elisas capital account balance at the end of the year is 1. $81,000 2. $61,000 3. $50,000 4. $95,000 4 points Save Answer

QUESTION 38 Henry Jones contributed equipment, inventory, and $44,000 cash to the partnership. The equipment had a book value of $35,000 and market value of $28,000. The inventory has a book value of $25,000, but only had a market value of $12,000. due to obsolescence. The partnership also assumed a $15,000 note payable owed by Henry that was originally used to purchase the equipment. What amount should Henrys capital account be recorded? 1. $104,000 2. $84,000 3. $69,000 4. $89,000