intermediateaccounting练习题4.docx
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intermediateaccounting练习题4.docx
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intermediateaccounting练习题4
COMPREHENSIVEEXAMINATIOND
PART4
(Chapters15-17)
Approximate
Problem
D-ID-IID-IIID-IVD-VD-VID-VIID-VIII
Topic
Time
TreasuryStock.
20min.
*CashDividends.
10min.
StockDividendsandStockSplits.
10min.
EarningsPerShareConcepts.
10min.
EarningsPerShareComputations.
10min.
BasicandDilutedEarningsPerShare.
20min.
Available-for-SaleEquitySecurities.
15min.
TradingSecurities.
30min.
125min
*PartofthistopicisdealtwithinanAppendixtothechapter.
ProblemD-I—TreasuryStock
Thestockholders'equitysectionofCareyCo.'sbalaneesheetatDecember31,2014,wasasfollows:
Commonstock--$10par(authorized1,000,000shares,
issuedandoutstanding600,000shares)$6,000,000
Paid-incapitalinexcessofpar1,500,000
Retainedearnings3,250,000
$10,750,000
Instructions
Preparejournalentries(1,2,and4)andshowproperdisclosure(3)toreflectthefollowingtreasurystocktransactionsshowinghoweachisaccountedforunderthecostmethod.(Showcomputations.)
1.OnJanuary4,2015,havingidlecash,CareyCo.repurchased25,000sharesofitsoutstandingstockfor$500,000.
2.OnMarch4,Careysold5,000ofthesereacquiredsharesat$24pershare.
3.Showtheproperdisclosuresinthestockholders'equitysectionofthebalaneesheetissuedattheendofthefirstquarter,March31,2015.Assumenetincomeof$100,000duringthefirstquarter.
4.OnJune30,2015thefirmsold10,000ofthereacquiredsharesfor$17pershare.
*ProblemD-ll—CashDividends
BellCompanyhasstockoutstandingasfollows:
Common,$10parvaluepershare,140,000shares;Preferred,4%;$100parvaluepershare,8,000shares.ThePreferrediscumulativeandparticipatinguptoanadditional3%ofpar;twoyearsareinarrears(notincludingthecurrentyear);andthetotalamountofcashdividendsdeclaredforbothclassesofstockis$192,000.
Instructions
Preparetheentryforthedividenddeclaration,separatingthedividendintothecommonandpreferredportions.
ProblemD-III—StockDividendsandStockSplits
Stockdividendsandstocksplitsarecommonformsofcorporatestockdistributiontostockholders.
Considereachofthenumberedstatements.Youaretodecidewhetherit:
A.Appliestobothstockdividendsandstocksplits.
B.Appliestoneither.
C.Appliestostocksplitsonly.
D.Appliestostockdividendsonly.
E.Appliestostocksplitseffectedintheformofadividendonly.
F.Appliestobothstocksplitseffectedintheformofadividendandastockdividend.
(Ineachinstanee,theissuingcompanyhasonlyoneclassofstock.)
Instructions
Printnexttothenumberofeachstatementbelow,thesinglecapitalletterofthedescriptionwhichappliestothestatement.
Statements
1.Thedistributionisamultipleascontrastedtoafractionofthenumberofsharespreviouslyoutstanding.
2.Thetotalnumberofsharesoutstandingisincreased.
3.Theindividualstockholder'sshareofnetassetsisincreased.
4.Thereisnotransferbetweenretainedearningsandcapitalstockaccounts,otherthantotheextentoccasionedbylegalrequirements.
5.Thereisnochangeinthetotalstockholders'equityoftheissuingcorporation.
6.Theretainedearningsavailablefordividendsareincreased.
7.Retainedearningsintheamountofthedistributionaretransferredtocapitalstock,in
someinstancesinanamountinexcessofthatrequiredbythelawsofthestateofincorporation.
8.Subsequentper-shareearnings,ifany,aredecreased.
9.Thepar(orstatedvalue)ofthestockisunchanged.
ProblemD-IV—EarningsPerShareConcepts
Indicatewhichofthefollowingsecuritieswouldbeincludedinthecomputationof"basicearningspershare,"andwhichwouldbeincludedinthecomputationof"dilutedearningspershare."Placea"B"beforethosewhichaffectonlybasicEPS,a"D"beforethosewhichaffectonlydilutedEPS,a"BD"beforethosewhichaffectbothbasicanddilutedEPS,andan"N"beforethosesecuritieswhichdonotaffectEPScomputations.Assumethat,whereapplicable,theappropriatesecuritiesaredilutive.
1.Warrantstopurchaseadditionalcommonshares.
2.Commonstock.
3.Nonconvertibledebenturebonds.
4.Convertible,noncumulativepreferredstock.
5.Cumulative,nonconvertiblepreferredstock.
6.Convertiblebonds.
7.Executivestockoptions.
8.Notespayable.
ProblemD-V—EarningsPerShareComputations
Jones,Inc.hasnetincome(30%taxrate)of$1,400,000for2015,andanaveragenumberofsharesoutstandingduringtheyearof500,000shares.Thecorporationissued$2,000,000parvalueof10-year,9%convertiblebondsonJanuary1,2013ata$180,000discount.Theconvertiblebondsareconvertibleinto70,000sharesofcommonstock.Assumethecompanyusesthestraight-linemethodforamortizingbonddiscount.
Instructions
Computetheearningspersharedata,excludinganynotesifrequired.
ProblemD-VI—BasicandDilutedEarningsPerShare
AssumethatthefollowingdatarelatetoRosen,Inc.fortheyear2015:
Netincome(30%taxrate)
$3,500,000
Averagecommonsharesoutstanding2015
1,000,000shares
10%cumulativeconvertiblepreferredstock:
Convertibleinto80,000sharesofcommon
$1,600,000
8%convertiblebonds;convertibleinto75,000
sharesofcommon
$2,500,000
Stockoptions:
Exercisableattheoptionpriceof$25pershare;
averagemarketpricein2015,$30
84,000shares
Instructions
Compute(a)basicearningspershare,and(b)dilutedearningspershare.
ProblemD-VII—Available-for-SaleEquityInvestments
OnJanuary2,2014,NorwinCompanypurchased2,000sharesofOsloCompanycommonstockfor$60,000.Thestockhasaparvalueof$10andispartofthetotalstockoutstandingof20,000sharesofOsloCompany.NorwinCompanyintendsthestocktobeavailableforsale.Totalstockholders'equityofOsloCompanyonJanuary2,2014was$600,000.
Instructions
PreparenecessaryjournalentriesonthebooksofNorwinCompanyforthefollowingtransactions.
Ifnoentryisrequired,write"none"inthespaceprovided.(Roundallcalculationstothenearestcent.)
(a)January2,2014:
Norwinpurchasesthesharesdescribedabove.
(b)December31,2014:
Norwinreceivesa$.75persharedividendfromOslo,andOsloannouncesanetincomefor2014of$250,000.
(c)December31,2014:
AccordingtoTheWallStreetJournal,Oslocommonissellingfor$27pershare.Norwin'smanagementviewsthisdeclineasbeingonlytemporaryinnature.Oslo'scommonisNorwin'sonlyavailable-for-salesecurity.
(d)February15,2015:
Norwinsells1,000ofthesharespurchasedonJanuary2,2014at$32pershare.
ProblemD-VIII—TradingSecurities
TheinformationbelowrelatestoMiltonCompany'stradingsecuritiesin2014and2015.
(a)Preparethejournalentriesforthefollowingtransactions.
January1,2014
Purchased$400,000parvalueofGLFCompanybondsat97plusaccrued
interest.Thebondspayinterestannuallyat9%eachDecember31.Broker'scommissionwas$4,000.
September1,2014
Sold$200,000parvalueofGLFCompanybondsat94plusaccruedinterest.Broker'scommission,taxes,andfeeswere$2,000.
September5,2014
Purchased5,000sharesofHayes,Inc.commonstockfor$30pershare.
Thebroker'scommissiononthepurchaseamountedto$2,000.
December31,2014
MaketheappropriateentryfortheGLFCompanybonds.
December31,2014
ThemarketpricesofthetradingsecuritiesatDecember31were:
Hayes,
Inc.commonstock,$31pershare;andGLFCompanybonds,99.Maketheappropriateentry.
July1,2015
Miltonsold1/2oftheHayes,Inc.commonstockat$33pershare.Broker'scommissions,taxes,andfeeswere$1,000.
December1,2015
Miltonpurchased600sharesofRamirez,Inc.commonstockat$45pershare.Broker'scommissionwas$500.
December31,2015
MaketheappropriateentryfortheGLFCompanybonds.
December31,2015
ThemarketpricesofthetradingsecuritiesatDecember31were:
Hayes,Inc.commonstock,$34pershare;GLFCompanybonds,98;andRamirez,Inc.commonstock,$47pershare.Maketheappropriateentry.
(b)Presentthefinancialstatementdisclosure(balaneesheetandincomestatement)ofMilton
Company'stransactionsintradingsecuritiesforeachoftheyears2014and2015.
Appropriatefinancialstatementsubheadingsmustbedisclosed.
Solutions——ComprehensiveExaminationD
ProblemD-I—Solution.
1.TreasuryStock500,000
Cash500,000
2.Cash120,000
TreasuryStock100,000
Paid-inCapitalfromTreasuryStock20,000
3.Stockholders'equity:
Commonstock,$10par,1,000,000sharesauthorized,
600,000sharesissued,580,000sharesoutstanding$6,000,000
Paid-incapitalinexcessofparvalue1,500,000
Paid-incapitalfromtreasurystock20,000
Retainedearnings3,350,000
10,870,000
Less:
Costof20,000sharesheldintreasury(400,000)
Totalstockholders'equity$10,470,000
4.Cash170,000
Paid-inCapitalfromTreasuryStock20,000
RetainedEarnings10,000
TreasuryStock200,000
*ProblemD-II—Solution.
RetainedEarnings
DividendsPayable,Preferred
DividendsPayable,Common
192,000
112,000
80,000
Computations:
Preferred
Common
Total
Arrears—$800,000X4%X2
$64,000
$64,000
Preferenee—$800,000X4%
32,000
32,000
Common—$1,400,000>4%
$56,000
56,000
Participating2%*
16,000
24,000
40,000
$112,000
$80,000
$192,000
[($192,000-$152,000)-($600,000+$1,400,000)]
ProblemD-III
—Solution.
1.
C
4.
E
7.
F
2.
A
5.
A
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