ACC 423 Week 5 Final Exam 2 Questions

Question 29

Preferred

Common

Total

Current Dividend

$7,000

$21,000

$28,000

Grouper Corp. had

$100,000

of

7%

$20

par value preferred stock and

12,000

shares of

$25

Participating

$9,000

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$36,000

par value common stock outstanding throughout 2017.

$16,000

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a

Assuming that total dividends declared in 2017 were

$64,000

,and that the preferred stock is not cumulative but is fully participating,

common stockholders should receive 2017 dividends of what amount?

b

Assuming that total dividends declared in 2017 were

$64,000

, and that the preferred stock is fully participating and cumulative with

preferred dividends in arrears for 2016, preferred stockholders should receive 2017 dividends totaling what amount?

c

 Assuming that total dividends declared in 2017 were

$30,000

, that the preferred stock is cumulative, nonparticipating, and was issued

on January 1, 2016, and that

$5,000

of preferred dividends were declared and paid in 2016, the common stockholders should receive

2017 dividends totaling what amount?

Question 8

Skysong financial income for Lake Inc. is

$280,000

, and its taxable income is

$90,000

for 2018. Its only temporary difference at the end of the period

 relates to a

$80,000

difference due to excess depreciation for tax purposes. If the tax rate is

38%

for all periods, compute the amount of

income tax expense to report in 2018. No deferred income taxes existed at the beginning of the year.

Question 18

In January 2017, installation costs of

$4,700

on new machinery were charged to Maintenance and Repairs Expense. Other costs of this machinery of

$23,500

were correctly recorded and have been depreciated using the straight-line method with an estimated life of 10 years and no salvage value. At December 31, 2018,

it is decided that the machinery has a remaining useful life of

20

years, starting with January 1, 2018.

What entries should be made in 2018 to correctly record transactions related to machinery, assuming the machinery has no salvage value? The books have not been closed for 2018 and depreciation expense has not yet been recorded for 2018.