Question 1: The Washington Company has 100,000 shares of $10 par common stock outstanding. Management declares (not pays) a 10% stock dividend. The market value of a share of common stock was $30 immediately prior to the stock dividend declaration. The journal entry is:
debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in excess of par, $200,000
debit stock dividends distributable, $100,000; credit common stock, $100,000.
debit stock dividends distributable, $300,000; credit common stock, $300,000.
debit retained earnings, $300,000; credit stock dividend distributable, $10,000; credit paid in capital in excess of par, $290,000.
Question 2: Spiffy Dress Company previously purchased 10,000 shares of treasury stock on the open market for $10 per share. Later, the company resells 6,000 shares for $12 per share. What is the journal entry for the sale?
debit cash, $72,000; credit treasury stock, $12,000; credit additional paid-in capital, $60,000
debit cash, $72,000; credit treasury stock, $72,000
debit cash, $72,000; credit treasury stock, $60,000; credit retained earnings, $12,000
debit cash, $72,000; credit treasury stock, $60,000; credit additional paid-in capital-treasury stock, $12,000
Question 3: Green Ventures Inc. purchased 10% of the outstanding stock of Jones Company. Green paid $15 per share to acquire 8,000 shares and will treat this purchase as available-for-sale securities. Par value of the stock is 50 cents. Green uses a calendar year, and on December 31, the market value of Jones stock is $17 per share. What is the entry Green needs to make on December 31?
debit unrealized gain on available-for-sale securities, $16,000; credit available-for-sale securities, $16,000.
debit available-for-sale securities, $16,000; credit unrealized gain on available-for-sale securities, $16,000.
debit available-for-sale securities, $8,000; credit unrealized gain on available-for-sale securities, $8,000.
no entry is required because the stock has not been sold.
Question 4: On January 10, Bowie Ventures Inc. purchased 40% of the outstanding stock of Mighty Manufacturing Corp. The purchase was 30,000 shares at $10 per share. Bowie received dividends from Mighty in the amount of $20,000 on June 15 and again on December 15. Mighty reported net income for the year ended December 31 in the amount of $300,000. What is the journal entry, if any, that Bowie needs to make dated December 31?
No entry on December 31 because the dividends were paid on different dates.
Debit investment in Mighty Corp., $100,000; credit income from Mighty Corp., $100,000.
Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $120,000.
Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $100,000; credit dividends income, $20,000.
Question 5: On January 1, 2017, Montgomery Inc. issued $250,000, 20-year, 5% bonds at 101. Interest is payable semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2017, is:
debit cash, $250,000; credit bonds payable, $200,000.
debit cash, $250,000; debit premium on bonds payable, $5,000; credit bonds payable, $255,000.
debit cash, $250,000; credit bonds payable, $200,000; credit premium on bonds payable, $5,000.
debit cash, $255,000; credit bonds payable, $255,000.
Question 6: Using the selected data below, calculate the net cash provided by operating activities:
Net income - $250,000
Increase in accounts receivable - $13,000
Increase in accounts payable - $10,000
Loss on the sale of equipment - $8,000
Depreciation expense - $21,000
Purchase of new delivery truck - $40,000
$276,000
$282,000
$260,000
$263,000
Question 7: A Corporation has 250,000 shares of $10 par common stock issued and outstanding. AA Corporation also has 50,000 shares of $100, 6% par cumulative preferred stock. In 2017, AA had net income of $3,500,000. The number of shares of both common and preferred stock has not changed during the year, and the preferred stock dividends were paid at the end of 2017. What are the common earnings per share (EPS) for 2017? Round to the nearest cent.
$14.20
$14.00
$12.80
$13.73
Question 8: A manufacturing company allocates overhead at a fixed rate of $40 per hour based on direct labor hours. During the month, total overhead incurred was $280,000, and the total direct labor hours work was 4,000. Job number 5-23 had 500 hours of direct labor. What is the amount of overhead allocated to job 5-23?
$20,000
$35,000
$27,500
$25,000
Question 9: The welding department had beginning work in process of 20,000 units, ending work in process of 26,000 units, and units transferred out of 60,000 units. What was the number of units started or transferred in?
58,000
66,000
62,000
70,000
Question 10: Ziggy Corp. is a job lot manufacturer. The budget for the month of May calls for 8,000 direct labor hours to be worked. Budgeted overhead is $88,000 with a predetermined rate of $11 per hour. Overhead is applied based on actual direct hours worked. Actual direct hours were 8,300 and actual overhead spending was $88,500. What was the under applied or over applied overhead for the month of May? Over applied is shown as a negative number.
$3,500
$2,800
($2,800)
($3,500)
Question 11: This problem is worth 12.5 points. On July 1, 2017 Alpha Company issues $2,000,000 face value of 5% five year bonds which call for semiannual interest payments. The bonds are dated April 1, 2017 so these bonds are issued between interest dates. The market rate at the date of issue is also 5%. For simplicity, use a 360-day year and 30 day months for all calculations.
1. Record the journal entries for the issuance of the bonds
2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not been accrued at each month end.
Question 12: On April 1, 2017Alphaa Company sells $2,000,000 face value of 5% five year bonds at 101 which call for semiannual interest payments. The bonds are dated April 1, 2017 so these bonds are issued on an interest date. Use the straight line method of amortization of any bond premium or discount. For simplicity, use a 360-day year and 30 day months for all calculations.
1. Record the journal entries for the issuance of the bonds
2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not been accrued at each month end.
Question 13: Problem 1 - Mars Manufacturing produces a basic cellphone as a contract manufacturer. Overhead is applied at a rate of $42 per direct labor hour. The direct labor rate is $18 per hour. In March, there was no beginning or ending work in process, and the assembly department produced 20,000 finished phones. The materials cost was $120,000, and there were 2,500 direct labor hours worked during the month. Actual overhead spending was $103,400 during the month.
Calculate the total cost of production in the month of March and the cost per unit for each phone produced. Determine if overhead was over applied or under applied and by what amount.
Problem 2 - BewlayBrothers Manufacturing produces wooden chairs. The cutting department produces all of the component parts and transfers the parts to the assembly department. The assembly department had no work in process at the beginning of the month and had two jobs started during the month. Since materials are transferred in, all materials are charged to each job at the beginning of the job. The materials cost is $17.50 per chair. Assembly time is 20 minutes per chair and the direct labor rate is $15 per hour. Overhead is charged to a job only when a job is completed and ready to transfer to finished goods. The overhead is applied on a per-chair basis at a rate of $6 per chair. Job No. 1 was for 1,000 chairs, and it was started and completed during the month. Job No. 2 was for 1,500 chairs, and it was 60% complete at month end.
Calculate the costs to complete Job No. 1 and the unit cost per chair. Calculate the costs charged as of month's end and the equivalent units of production for Job No. 2.