ACC 423 Week 5 Final Exam | Assignment Help | University Of Phoenix

ACC 423 Week 5 Final Exam | Assignment Help | University Of Phoenix 

CPA Question 01

 

Correct answer:

  

 

  Common stock

Preferred stock

 Additional Paid-in capital 

 $5,000 

 $15,000 

 $92,500 


Common stock: 5,000($1) = $5,000 (only par is recorded in common stock) 
Preferred stock: 1,500($10) = $15,000 (only par is recorded in preferred stock) 
Additional paid-in capital: 
Common: 5,000($15 - $1) = $70,000 
Preferred: 1,500($25 - $10) = 22,500 
Total additional paid-in capital $92,500

 

 

CPA Question 02

 

$225,000 is correct. The number of common shares outstanding is equal to the issued shares less treasury shares. Beck Corp. had 300,000 shares outstanding at 1/1/Y1. The purchase of treasury shares in year 3 reduced the number of shares outstanding to 225,000 (300,000 − 75,000). The preferred stock convertible into 100,000 shares of common stock is recorded as preferred stock until it is converted by the stockholder.

 

 

Beck Corp. issued 200,000 shares of common stock when it began operations in year 1 and issued an additional 100,000 shares in year 2. Beck also issued preferred stock convertible to 100,000 shares of common stock. In year 3, Beck purchased 75,000 shares of its common stock and held it in Treasury. At December 31, year 3, how many shares of Beck's common stock were outstanding?

 

On September 1, 2017, Hyde Corp., a newly formed company, had the following stock issued and outstanding:
• Common stock, no par, $1 stated value, 5,000 shares originally issued at $15 per share.
• Preferred stock, $10 par value, 1,500 shares originally issued for $25 per share.
Hyde's September 1, 2017 statement of stockholders' equity should report


CPA Question 05

 

$105,000 is correct. A 5% stock dividend increases outstanding shares by 5%, and a 2-for-1 split doubles outstanding shares. The number of outstanding shares at year-end therefore is 105,000 = 50,000(1.05)(2). Each subsequent dividend or split compounds the previous change.

 

 

Jones Co. had 50,000 shares of $5 par value common stock outstanding at January 1. On August 1, Jones declared a 5% stock dividend followed by a two-for-one stock split on September 1. What amount should Jones report as common shares outstanding at December 31? 


Question 29

Wildhorse Corp. had $100,000 of 7%, $20 par value preferred stock and 12,000 shares of $25 par value common stock outstanding throughout 2017.


Brief Exercise 15-1


 


Nash Corporation issued 350 shares of $9 par value common stock for $4,725.

Prepare Nash’s journal entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

CPA Question 04

$13,500 is correct. Total compensation expense at grant date is $60,000 (3,000 x $20). The service period is four years (2015-2018). Annual expense recognized is $15,000 ($60,000/4).Through 2016, a total of $30,000 of compensation expense is recognized. After the forfeit, only 2,900 shares remain to be awarded. Annual compensation expense for the remaining two years before considering forfeited shares is therefore $14,500 [(2,900 x $20)/4]. The expense for the two years associated with the 100 shares forfeited is $1,000 [(100 x $20)/2]. For 2017, subtracting the reversal of the $1,000 yields $13,500 as the final amount of expense to be recognized. Another way to calculate the $14,500 is: ($60,000 original total compensation expense - $30,000 expense for 15 and 16 - $1,000 expense for 17 and 18 on forfeited shares)/2.

 

 

A restricted stock award was granted at the beginning of 2015 calling for 3,000 shares of stock to be awarded to executives at the beginning of 2019. The fair value of one option was $20 at grant date. During 2017, 100 shares were forfeited because an executive left the firm.
What amount of compensation expense is recognized for 2017?


CPA Question 06

$3.79 is correct. Basic EPS = Net Income - Preferred Dividends / Weighted shares outstanding. The numerator is $236,000 - preferred dividends [($60 x 10,000) x .04 = 24,000] = $212,000. The denominator is 50,000 (12/12) + 8,000 (9/12) = 56,000 shares. $212,000 / 56,000 = $3.786 or $3.79.

 

 

A company had the following outstanding shares as of January 1, year 2:

  Preferred stock, $60 par, 4%, cumulative  

10,000 shares  

  Common stock, $3 par   

50,000 shares  


On April 1, year 2, the company sold 8,000 shares of previously unissued common stock. No dividends were in arrears


 

Brief Exercise 16-2


 

 

Ivanhoe Corporation has outstanding 2,200 $1,000 bonds, each convertible into 40 shares of $10 par value common stock. The bonds are converted on December 31, 2017, when the unamortized 


discount is $35,100 and the market price of the stock is $21 per share.

Record the conversion using the book value approach. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Brief Exercise 16-7

 


 

 

On January 1, 2017, Shamrock Corporation granted 2,200 shares of restricted $5 par value common stock to executives. The market price (fair value) of the stock is $63 per share on the date of grant. The period of benefit is 2 years.

Prepare Shamrock’s journal entries for January 1, 2017, and December 31, 2017 and 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Brief Exercise 17-1

 


 

 

Wildhorse Company purchased, on January 1, 2017, as a held-to-maturity investment, $66,000 of the 8%, 5-year bonds of Chester Corporation for $60,996, which provides an 10% return.

Prepare Wildhorse’s journal entries for (a) the purchase of the investment, and (b) the receipt of annual interest and discount amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 1,225. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)








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