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    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2

The statement of​ stockholders' equity has more information than the statement of retained
earnings because it reports the changes in all​ stockholders' equity accounts.
 
True
   
The following information is from the December​ 31, 2018 balance sheet of Millner Corporation.
 
Preferred​ Stock, ($100 par)                                          $550,000
Paid−In Capital in Excess of Par—Preferred          38,000
Common​ Stock, $1 par                                                   220,000
Paid−In Capital in Excess of Par—Common            560,000
Retained Earnings                                                            151,500
Total​ Stockholders' Equity                                            $1,519,500
 
What was the average issue price of the common stock​ shares? ​(Round your answer to the nearest​ cent.)
 
$3.55
   
Beta Electronics has a plant asset that cost $45,000 and has accumulated
depreciation of $10,000. The plant asset is sold for cash at a $1,000 gain.
How much increase in cash flow should Beta report for investing activities?
 
$36,000
   
McGraw company is authorized to issue 70,000 shares of $20 par common stock. On July 30, 2016,
McGraw issued 10,000 shares at $30 per share. McGraw’s journal entry to record these facts should include a
 
credit to common stock for $200,000
   
The following are the account balances of Green Co. at August 31, 2016:

Dividends Payable                                            $              30,000
Preferred Stock, $100 par                                             200,000
Paid-in Capital in Excess of Par - Common              45,000
Cash -                                                                    $              118,000
Common stock, $1                                                           180,000
Retained Earnings                                                            350,000

How many shares of common stock has McQuaide issued?
 
180,000

(total par value/ par value per share = common shares issued)
   
Sharp Corporation purchased treasury stock in 2016 at a price of $19 per share and resold
the treasury stock in 2017 at a price of $40 per share. What amount should Sharp report on its
income statement for 2017?
 
$0
   
If a gain of $7,000 results from selling (for cash) office equipment having a book value of $55,000,
the total amount reported in the cash flows from investing activities section of the statement of cash flows is
 
$62,000
   
Beta Electronics reports the following data for the year ended December 31, 2019:
 
Cash receipt from sale of equipment                       $              30,000
Depreciation Expense                                                                    12,000
Cash payment of Dividends                                                          5,000
Cash receipt from issuance of Common Stock                      22,000
Net Income                                                                                         40,000
Cash purchase of Land                                                                   25,000
Increase in Current Liabilities                                                      10,000
Decrease in Current Assets other than Cash                          8,000
 
What is the cash flow from operating activities?
 
$70,000
 
(Depreciation Expense + Net Income + Current Assets + Current Liabilities)
   
Oak Run Mall, Inc., has 7,500 shares of 5%, $50 par cumulative preferred stock and 100,000 shares
of $2 par common stock outstanding. At the beginning of the current year, preferred dividends were
four years in arrears. Oak Run's board of directors wants to pay a $2.50 cash dividend on each share
of outstanding common stock in the current year.
To accomplish this, what total amount of dividends must Oak Run declare?
 
$343,750
   
Baker Electronics reported the following data for the year ended December 31, 2019:
 
Cash receipt from sale of equipment                       $              40,000
Depreciation Expense                                                                    15,000
Cash payment of Dividends                                                          7,000
Cash receipt from issuance of Common Stock                      21,000
Net Income                                                                                         50,000
Cash purchase of Land                                                                   20,000
Increase in Current Liabilities                                                      11,000
Decrease in Current Assets other than Cash                          10,000
 
What is the cash flow from financing activities?
 
$14,000
   
Marco Company's net income and net sales are $18,000 and $1,100,000, respectively,
and average total assets are $100,000. What is Marco's return on assets?
 
18%
   
Francesca's foods has outstanding 550 shares of 4% preferred stock, $100 par value; and 2,000 shares of common
stock, $5 par value. Francesca's declares dividends of $14,300. Which of the following is the correct entry?
 
Debit Retained Earnings                               14,300
Credit Dividends payable, preferred                       2,200
Credit Dividends payable, common                         12,100
 
   
A company paid $28 per share to purchase 900 shares of its common stock as treasury stock. The stock was
originally issued at $18 per share.
Which of the following is the journal entry to record the purchase of the treasury stock?
 
Debit Treasury Stock                      25,200
Credit Cash                                                         25,200
   
The following are the account balances of Horation Co. at August 31, 2016:

Dividend Payable                                                              30,000
Preferred Stock, $100 par                                             300,000
Paid-in Capital in excess of par - common              125,000
Cash                                                                                      104,000
Common stock, $5 par                                                   1,250,000
Retained earnings                                                            200,000

Horatio's total paid-in capital at August 31, 2016 is:
 
1,675,000

(common stock + preferred stock + paid-in capital in excess of par - common)
   
The following selected account balances appeared on the financial statements of Sanchez Company:
Sanchez Company uses the direct method to calculate net cash flow from operating activities.
Cash collections from customers are
 
$66,000
   
A corporation has 20,000 shares of 5% preferred stock outstanding. Also, there are 20,000 shares
of common stock outstanding. Par value for each is $100. If $450,000 dividend is paid, how much
goes to the preferred stockholders.
 
$100,000
   
A corporation has 10,000 shares of 8% preferred stock outstanding. Also, there are 10,000 shares
of common stock outstanding. Par value for each is $100. If a $950,000 dividend is paid, what is the
amount of dividends per share on common stock?
 
$87,000
   
The net income reported on the income statement for the current year was $295,000.
Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and
$5,000, respectively. Balances of current asset and current liability accounts at the end and at the
beginning of the year are: What is the amount of cash flows from operating activities reported on the
statement of cash flows prepared by the indirect method?
 
$312,000
   
These account balances at December 31 relate to Sportstuff, Inc.:

Accounts Payable                                                             51,800
Accounts Receivable                                                       81,850
Preferred stock, 10%, $100 par                                  85,000
Paid-in Capital in Excess of Par—Common            230,000
Common Stock                                                                  317,000
Treasury Stock                                                                   5,700
Bond Payable                                                                     3,800
Retained Earnings                                                            71,500
notes receivable                                                               12,400

Sportworld's net income for the period is $119,600 and the beginning common stockholders'
equity is $681,400. The total stockhlder's equity at the end of the year (December 31) was
calculated to be $670,200. Calculate Sportworld's return on common stockholders' equity.
 
17.1%
 
   
A company purchased 100 shares of its common stock at $46 per share. It then sells 40 of the
treasury shares at $57 per share. The entry to sell the treasury stock includes a:
 
credit to paid-in capital from treasury stock transactions for $440

(57 - 46) (40) = 440
   
Sanchez Inc. reported the following on the company's cash flow statement in 2012:
Thirty percent of the cash flow used for investing activities was used to replace existing capacity.
What is the free cash flow for 2012?
 
$440,000.
 
200,000 x 0.30 = 60,000
500,000 - 60,000 = 440,000.
   
These account balances at December 31 relate to Sportstuff, Inc.:

Dividends Payable                                                                            51,400
Accounts Receivable                                                                       81,250
Preferred stock, 10%, $100 par                                                  88,000
Paid-in Capital in Excess of Par—Common                             260,000
Cash                                                                                                      $111,000
Common Stock                                                                                  317,000
Treasury Stock                                                                                   5,800
Bond Payable                                                                                     3,500
Retained Earnings                                                                            71,700
notes receivable                                                                               12,300

What is total paid-in capital for Sportstuff, Inc.?
(Assume that treasury stock does not reduce total paid-in capital)
 
$665,000

(Common stock + paid-in capital + preferred stock)
   
The following are the account balances of Horatio Co. at August 31, 2016:

Dividends Payable                                                                            10,000
Preferred stock, $100 par                                                            200,000
Paid-in Capital in Excess of Par—Common                             60,000
Cash                                                                                                      $127,000
Common Stock, $5 par                                                                   240,000
Retained Earnings                                                                            400,000

McQuaide's total stockholders' equity as of August 31, 2016 is
 
900,000

(Preferred stock + paid-in capital + common stock + retained earnings)
   
The following are the account balances of Horatio Co. at August 31, 2016:

Dividends Payable                                                                            22,500
Preferred stock, $100 par                                                             150,000
Paid-in Capital in Excess of Par—Common                             30,000
Cash                                                                                                      $111,000
Common Stock, $5 par                                                                   120,000
Retained Earnings                                                                            400,000

What would Greene's total stockholders' equity be if Greene had $5000 of treasury stock?
 
$695,000

(Preferred stock + paid-in capital + common stock + retained earnings - treasury stock)
   
Fair Play, Inc, issues 240,000 shares of no-par common stock for $7 per share.
The journal entry is which of the following?
 
Debit Cash 1,680,000
Credit Common stock 1,680,000
   
Paid-in capital consists of​ ________.
 
amounts received from stockholders in exchange for stock
   
A company originally issued 18,000 shares of $6.00 par value common stock at $11.00 per share.
The board of directors declares a 17​% stock dividend when the market price of the stock is $12.00 a share.
Which of the following is included in the entry to record the declaration of a stock​ dividend?
 
Stock Dividends is debited for $36,720.
   
Robbins Company uses the indirect method to prepare its statement of cash flows.
If the "net cash provided by operations" on its statement was $55,000, what would the net
cash provided by operations using the direct method be?


a. less than $55,000
b. $55,000
c. more than $55,000
d. cannot be determined from the information provided
   
The cost of merchandise sold during the year was $54,000. Merchandise inventories were $10,500 and
$12,500 at the beginning and end of the year, respectively. Accounts payable were $6,000 and $9,000
at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from
operating activities, cash payments for merchandise total
 
$53,000.
 
54,000 + 2,000 (12,500 - $10,500) - 3,000 (9,000 - 6,000) = 53,000.
   
Before a company can pay dividends to the common​ stockholders, the owners of cumulative preferred stock must​ receive:
 
all dividends in arrears plus the current​ year's dividends.
   
A share of​ 5% preferred stock has a par value of $40 and market value of $100.
The owners of the preferred stock will receive a dividend​ of: (Round your answer to the nearest​ cent.)
 
$2 per share
 
0.05 x 40
   
A corporation reported cash of $15,100 and total assets of $179,400 on its balance sheet.
Its common-size percent for cash equals:
 
8.42%.
 
(15,100 / 179,400) × 100 = 8.42%
   
Jones Corp. reported current assets of $195,000 and current liabilities of $138,000 on its
most recent balance sheet. The working capital is:
 
$57,000.
 
195,000 − 138,000 = 57,000.
   
Zhang Company reported Cost of goods sold of $836,000, beginning Inventory of $37,400
and ending Inventory of $46,400. The average Inventory amount is:
 
$41,900.
 
(37,400 + 46,400) / 2 = 41,900.
   
The following selected data are from a recent statement of cash flows:


Net cash flow from operating activities                                                   35,000
Net cash flow used for investing activities              (20,000)
Net cash flow used for financing activities                                             60,000
Ending cash balance                                                                                        100,000


What was the beginning cash balance?
a. $75,000
b. $25,000
c. $65,000
d. $(25,000

100,000 - (35,000 - 20,000 + 60,000) = 25,000
   
Ron Landscaping's income statement reports net income of $73,700, which
includes deductions for interest expense of $12,000 and income taxes of
$35,500. Its times interest earned is:
 
10.1 times
 
($73,700 + $12,000 + $35,500)/$12,000 = 10.1 times
   
Carducci Corporation reported net sales of $3.51 million and beginning
total assets of $0.99 million and ending total assets of $1.39 million.
The average total asset amount is:
 
$1.19 million.
 
($990,000 + $1,390,000)/2 = $1,190,000
   
Stark Company's most recent balance sheet reported total assets of $1.80
million, total liabilities of $0.85 million, and total equity of $0.95
million. Its Debt to equity ratio is:
 
0.89
 
850,000 / 950,000 = 0.89
   
Martinez Corporation reported net sales of $785,000, net income of $122,000,
and total assets of $7,834,032. The profit margin is:
 
15.54%.
 
122,000/ 785,000 = 15.54%.
   
A corporation reported cash of $28,000, total assets of $466,000, and total equity of
$159,710 on its balance sheet. Its common-size percent for cash equals:
 
6.01%.
 
(28,000 / 466,000) × 100 = 6.01%.
   
Wininger Corporation has 1,500 shares of​ 6%, $50 par​ value, cumulative preferred stock and​ 25,000 shares of​
$1 par value common stock outstanding on December​ 31, 2017 and December​ 31, 2018.
The board of directors declared and paid a​ $2,000 dividend in 2017. In​ 2018, $13,000 of dividends are declared and paid.
What are the dividends received by the common stockholders in​ 2018?
 
$6,000
   
Mr.​ Jorgensen, a shareholder in the Best​ Corporation, owns 5,000 shares of its common stock.
Mr. Jorgensen receives a 4​% stock dividend. After the stock​ dividend, Mr. Jorgensen will have​ a:
 
A total of 5,200 shares of Best​ Corporation's common stock.
   
A small stock dividend​ will:
 
have no effect on total assets or total​ stockholders' equity.
   
Mr.​ Seider, a shareholder in the Greenfield​ Corporation, owns 9,000 shares of their common​ stock, which represents 22​%
of the outstanding common stock of Greenfield Corporation. Mr. Seider receives a 5​% stock dividend. After the stock​ dividend,
what is Mr.​ Seider's ownership in Greenfield​ Corporation's common​ stock?
 
22%
   
Assume that a company paid $7 per share to purchase 1,100 shares of its $4 par common stock
as treasury stock. The purchase of treasury stock Begin by calculating the total value of the treasury
stock that was purchased. Recall that treasury stock is recorded at​ cost, without reference to par value.
 
$16,000
 
1,100 x 7 = 16,000
   
Burkert Company has​ 50,000 shares of​ $1 par value common stock issued and outstanding.
The company also has 6,000 shares of​ $100 par​ value, 5​% cumulative preferred stock outstanding.
Burkert did not pay the preferred dividends in 2016 and 2017. For the common stockholders to receive a dividend
in​ 2018, the board of directors must declare dividends in excess​ of:
 
$90,000
 
6,000 x 100 x 0.05 = 30,000
30,000 + 30,000 + 30,000 = 90,000
   
Dividends declared during the year were $54,000. The dividends payable account decreased by $8,000.
Which of the following will appear in the Financing Activities section of the statement of cash flows?
A. Cash paid for dividends, $(62,000)
B. Dividends declared, $(54,000)
C. Cash paid for dividends, $(46,000)
D. Change in dividends payable, $(8,000)
 
Dividends declared + dividends payable account decrease
   
The Good Word Store reported the following​ figures:
 
Retained​ Earnings, January​ 31, 2017.                                       $37,000,000
Retained​ Earnings, January​ 31, 2018                                         $20,000,000
Total​ Stockholders' Equity, January​ 31, 2017                         $31,000,000
Total​ Stockholders' Equity, January​ 31, 2018                         $27,000,000
 
The​ company's fiscal year ends on January 31 each year.
Dividends declared for the fiscal year ending January​ 31, 2018 are $12,000,000.
What is the net income or net loss for the fiscal year ending January​ 31, 2018?
 
$5,000,000 net loss
 
27,000,000 - 20,000,000 = 7,000,000
7,000,000 - 12,000,000 = -5,000,000
   
The net income reported on the income statement for the current year was $275,000.
Depreciation recorded on fixed assets and amortization of patents for the year were $30,000 and $4,000,
respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are:
What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?
 
$324,000
   
Dolanski Company declares and distributes a​ 30% common stock dividend when it has​ 50,000 shares of​ $10 par common stock outstanding.
The market price per share is​ $30 at the date of declaration. Which journal entry is​ prepared?
 
Debit Retained Earnings​                               $150,000
Credit Common Stock​                                    $150,000
 
50,000 x 10 par x 0.3 = 150,000
   
Conner Health Foods has 9,000 shares of $ 3 par common stock​ outstanding, which were issued at $ 10 per share.
Conner also has a deficit balance in Retained Earnings of $ 81, 000. How much is Conner​'s total​ stockholders' equity?
price per share x shares sold = paid-in-capital
 
171,000
 
10 x 9000 = 90,000
81,000 + 90000= 171,000
   
Operating expenses other than depreciation for the year were $300,000.
Accrued expenses decreased by $30,000 during the year.
Cash payments for operating expenses to be reported on the cash flow statement
using the direct method would be
 
$330,000
 
300,000 + 30,000 = 330,000
   
Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the
month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs.
The correct journal entry to record the direct labor for the month is:
 
Debit Work in Process Inventory              $212,000
Credit Factory Wages Payable                    $212,000.
   
A production department's output for the most recent month consisted of 8,000 units completed and
transferred to the next stage of production and 5,000 units in ending Work in Process inventory.
The units in ending Work in Process inventory were 50% complete with respect to both direct
materials and conversion costs. Calculate the equivalent units of production for the month, assuming
the company uses the weighted average method.
 
10,500 units.
   
Jones Corp. reported current assets of $201,500 and current liabilities of $143,000 on its
most recent balance sheet. The current assets consisted of $60,000 Cash; $40,600 Accounts
Receivable; and $100,900 of Inventory. The acid-test (quick) ratio is:
 
0.70:1
 
$60,000 + 40,600 = 100,600
100,600 / 143,000 = 0.70
   
A corporation reported cash of $27,000, total assets of $461,000, and total equity of $157, 895
on its balance sheet. Its common-size percent for cash equals:
 
5.86%.
   
A company's sales in Year 1 were $280,000 and in Year 2 were $317,500.
Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:
 
13%.
 
(317,500 − 280,000) / 280,000 × 100 = 13%
   
Alvarez Company is preparing the company's statement of cash flows for the fiscal year just ended.
The following information is available:
 
Retained earnings balance at the beginning of the year                   $318,000
Cash dividends declared for the year                                                       71,250
Proceeds from the sale of equipment                                                      122,400
Gain on the sale of equipment                                                                   7,050
Cash dividends payable at the beginning of the year                         31,350
Cash dividends payable at the end of the year                                     38,500
Net income for the year                                                                                156,750
 
The ending balance in retained earnings is:
 
$403,500.
 
318,000 + 156,750 − 71,250 = 403,500
   
Analysis reveals that a company had a net increase in cash of $21,430 for the current year.
Net cash provided by operating activities was $19,300; net cash used in investing activities
was $10,650 and net cash provided by financing activities was $12,780. If the year-end cash
balance is $25,950, the beginning cash balance was:
 
$4,520.
 
25,950 ending balance − 21,430 increase in cash = 4,520
   
Refer to the following selected financial information from Phantom, Corp.
Compute the company's days' sales in inventory for Year 2. (Use 365 days a year.)
 
Year 2
Merchandise inventory :                               271,000
Cost of goods sold :                                         486,400
 
Year 1
Merchandise inventory :                               253,500
Cost of goods sold :                                         433,100
 
203.40
   
West Company estimates that overhead costs for the next year will be $5,240,000 for indirect labor and
$550,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 150,000
machine hours are planned for this next year, what is the company's plantwide overhead rate?
 
$38.60 per machine hour.
   
Job A3B was ordered by a customer on September 25. During the month of September, Jaycee
Corporation requisitioned $3,000 of direct materials and used $4,500 of direct labor. The job was
 not finished by the end of September, but needed an additional $3,500 of direct materials in
October and additional direct labor of $7,000 to finish the job. The company applies overhead at
the end of each month at a rate of 100% of the direct labor cost. What is the amount of job costs
added to Work in Process Inventory during October?
 
$17,500
   
Dallas Company uses a job order costing system. The company's executives estimated that direct
labor would be $5,130,000 (190,000 hours at $27/ hour) and that factory overhead would be
$1,430,000 for the current period. At the end of the period, the records show that there had been
110,000 hours of direct labor and $1,130,000 of actual overhead costs. Using direct labor hours as
a base, what was the predetermined overhead rate? (Round your answer to two decimal places.)
 
$7.53 per direct labor hour.
   
Wilturner Company incurs $92,000 of labor related directly to the
product in the Assembly Department, and $41,000 of labor related to the
Assembly Department as a whole, and $28,000 of labor for services that
help production in both the Assembly and Finishing departments. The
amount of direct labor and factory overhead respectively are:
 
$133,000 and $28,000.

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2