Quiz 3 Accounting 220. Due in 2 days time. Owners' Equity and Long term assets

@course. Please highlight answers in red and re upload document. In Week 5, we discussed long-term assets, including property, plant, and equipment (PPE) as well as intangible assets, such as goodwill. In week 6 we identify the major characteristics of a corporation analyze, record, and report transactions for common stock, preferred stock, and treasury stock prepare and analyze a comprehensive stockholders' equity section and compute earnings per share explain why businesses invest in debt and stock securities identify reasons that corporations issue long-term debt prepare transactions for business investments and for the issuing of long-term debt This quiz is based on week 5 and 6 There are a total of 20 questions, each worth 5 points. The computer will automatically grade the true/false and multiple-choice questions, but grading will not be complete until your instructor manually grades the short-answer questions. Your instructor may grant partial credit on short-answer questions for less-than-complete answers. You can take the quiz only once. You can save each question after answering, and you can save the quiz before you submit it. Once you have submitted the quiz, you will receive a score and can compare your answers to the correct answers. Multiple Choice Select the best answer for each of the following questions. Question 1 (5 points) A company buys a new parcel of land. Which of the following items is properly debited to the land account? Question 1 options: planting of trees and shrubs the fees on a mortgage loan on the land demolishing an existing structure paving a road to access the land Save Question 2 (5 points) What type of asset is subject to depletion? Question 2 options: an intangible asset a computer a literary work natural resources Save Question 3 (5 points) Which is NOT an intangible asset? Question 3 options: a copyright on a musical work an estimated amount of coal in a piece of owned land that has not yet been mined a contract granting the company a right-of-way a patent on a new invention Save Question 4 (5 points) Which is NOT an advantage of a corporation compared with a partnership or sole proprietorship? Question 4 options: The total tax burden is lower. The corporation's existence is unaffected by the death of an owner. Owners enjoy limited liability. It is easier to raise large amounts of capital. Save Question 5 (5 points) If a corporation's stock is purchased by the corporation on the open market but is held in treasury and not retired, which of the following is correct? Question 5 options: A credit will be recorded to the treasury stock account, which is a liability account. A debit will be recorded to the treasury stock account, which is an equity account. A credit will be recorded to the treasury stock account, which is an equity account. A debit will be recorded to the treasury stock account, which is a liability account. Save Short Answer Prepare the following journal entries. Dates and descriptions are not required. Question 6 (5 points) A company sells a fixed asset (equipment) for $30,000. The asset originally cost $80,000 and had accumulated depreciation of $55,000 at the time of the sale. Record the journal entry to recognize the sale. Question 7 (5 points) A company scraps a fully depreciated piece of equipment originally costing $20,000. They did not receive any proceeds. Record the journal entry. Question 8 (5 points) A company sells a piece of plant equipment for $2,000. The original cost was $10,000, and the accumulated depreciation through the date of the sale was $6,500. Record the journal entry. Question 9 (5 points) A company buys a new pickup truck for $35,000 on the first day of the month. They will assume a 5-year life with a salvage value equal to 10% of the original cost. Record the first monthly depreciation journal entry. Question 10 (5 points) A company sells 200,000 shares of newly issued common stock having a par value of $1 for $8.50 per share. Record the journal entry. Question 11 (5 points) A company has net income of $4,580,000. There are 200,000 shares of $50 par, 6% preferred stock outstanding and 800,000 shares of common stock. What is the net income per common share (earnings per share)? Show your calculation. Question 12 (5 points) Question 13 (5 points) What does \"paid in capital in excess of par\" mean? Question 14 (5 points) What is a contra account? Give an example. Question 15 (5 points) l.A mining company pays $10,000,000 for a piece of land that they estimate has a recoverable reserve of oil equal to 1,500,000 barrels. They estimate that they will be able to sell the land for $500,000 after they have extracted all of the oil. In year one, the company extracts 300,000 barrels of oil. They have made no prior entries for the removal of this oil. Record the journal entry to recognize the removal of this oil. Question 16 (5 points) A company has 800,000 shares of common stock outstanding and no preferred stock. On February 21, the board of directors declares a 25-cents-per-share dividend, payable on March 31 to shareholders of record as of March 15. Record the journal entry for the declaration of the dividend. Question 17 (5 points) A company has 800,000 shares of common stock outstanding and no preferred stock. On February 21, the board of directors declares a 25-cents-per-share dividend payable on March 31 to shareholders of record as of March 15. Record the journal entry for the payment of the dividend. Question 18 (5 points) A corporation has 50,000 shares of $10 par common stock. A 10% stock dividend is declared and the market value of the stock is $80 immediately before the declaration. Record the journal entry made on the date the dividend is declared but not paid. Question 19 (5 points) What is the difference between a stock split and a stock dividend? Question 20 (5 points) A company has 150,000 shares of common stock outstanding and 10,000 shares of $100 par value, 5% preferred stock outstanding. The company's net income was $387,500. What are the earnings per common share? (Show your calculation.)