What was the average issue price of the common stock shares

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1) Which of the following is included in the entry to record the issuance of 14,000 shares of $7 par value
common stock at $21 per share cash?
A) Cash is debited for $294,000.
B) Common Stock is debited for $98,000.
C) Common Stock is credited for $294,000.
D) Paid-In Capital in Excess of Par—Common is debited for $196,000.
2) The following information is from the December 31, 2017 balance sheet of Lawson Corporation.
Preferred Stock, $100 par
Paid-In Capital in Excess of Par—Preferred
Common Stock, $1 par
Paid-In Capital in Excess of Par—Common
Retained Earnings
Total Stockholders’ Equity
$560,000
43,000
190,000
510,000
191,500
$1,494,500
What was the average issue price of the common stock shares? (Round your answer to the nearest cent.)
A) $1.88
B) $1.00
C) $2.68
D) $3.68
3) Moretown, Inc. had the following transactions in 2017, its first year of operations:
• Issued 31,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $20.00
per share.
• Earned net income of $70,000.
• Paid no dividends.
At the end of 2017, what is total stockholders’ equity?
A) $31,000
B) $690,000
C) $620,000
D) $70,000
4) When 1,000 shares of $3 stated value common stock is issued at $18 per share, ________.
A) Common Stock — $3 Stated is credited for $18,000
B) the account titled Paid-In Capital in Excess of Stated is used to record the issue price of the stock
C) the difference between the issue price and the stated value is credited to Paid-In Capital in Excess of
Stated
D) the accounting is exactly the same as the accounting for par value stock
5) On December 2, 2017, Ewell, Inc. purchases land. In payment for the land, Ewell, Inc. issues 6,000
shares of common stock with $6 par value. The land has been appraised at a market value of $430,000.
Which of the following is included in the journal entry to record this transaction?
A) debit Common Stock—$6 Par Value for $36,000 and debit Paid-In Capital in Excess of Par
—Common $394,000
B) credit Common Stock—$6 Par Value for $36,000 and credit Paid-In Capital in Excess of Par—Common
$394,000
C) credit Common Stock—$6 Par Value for $430,000
D) debit Cash $430,000
6) Osbourne, Inc. issued 60,000 shares of common stock in exchange for manufacturing equipment. The
equipment has a fair value of $1,420,000. The stock has a par value of $0.05 per share. The journal entry to
record this transaction includes a ________.
A) debit to Cash for $14,170,000
B) credit to Gain on Sale of Common Stock for $1,480,000
C) credit to Paid-In Capital in Excess of Par—Common for $1,417,000
D) credit to Common Stock—$0.05 Par Value for $1,420,000
7) Orange Office Supply Corporation completed the following stock issuance transactions:
Issued 5,000 shares of $4 stated value common stock for cash of
Mar. 28 $20 per share
Received merchandise inventory with a market value of $46,000
in exchange for 2,000 shares of the $4 stated value common
May 1 stock.
Issued 450 shares of 5%, $20 par value preferred stock for $50
May 14 per share
Prepare the journal entries to record these transactions. Explanations are not required.
8) Define treasury stock and provide two reasons why a corporation would purchase treasury stock.
9) Treasury stock ________.
A) decreases the number of shares issued
B) increases the number of shares issued
C) increases the number of shares outstanding
D) decreases the number of shares outstanding
10) Assume the following information for Petra Sales, Inc.:
•
•
•
•
Common Stock, $1.00 par, 232,000 shares issued, 186,000 shares outstanding
Paid-In Capital in Excess of Par—Common: $1,770,000
Retained Earnings: $2,450,000
Treasury Stock: 26,000 shares purchased at $12 per share
If Petra Sales purchases an additional 13,000 shares of treasury stock at $18 per share, what number of
shares will be shown as issued and outstanding?
A) 18 issued; 186,000 outstanding
B) 219,000 issued; 186,000 outstanding
C) 232,000 issued; 173,000 outstanding
D) 232,000 issued; 186,000 outstanding
11) Supermart, Inc. completed the following treasury stock transactions in 2016:
Mar. 3
Purchased 1,800 shares of the company’s $ 3 par value common stock as treasury stock, paying
cash of $ 10 per share.
Mar. 17 Sold 400 shares of the treasury stock for cash of $ 12 per share.
Mar. 25 Sold 600 shares of the treasury stock for cash of $ 7 per share.
(Assume the balance in Paid-In Capital from Treasury Stock Transactions on March 24 is $ 1,200.)
Journalize these transactions. Explanations are not required.
How will Supermart, Inc. report treasury stock on its balance sheet as of December 31, 2016?
12) On the ________, cash dividends become a liability of a corporation.
A) declaration date
B) date of record
C) last day of the fiscal year
D) payment date
13) The entry to record the payment of a previously declared dividend of $0.25 per share on 18,500 shares
of common stock includes a ________.
A) debit to Cash Dividends for $4,625
B) debit to Cash $4,625
C) credit to Cash Dividends for $4,625
D) debit to Dividends Payable for $4,625
14) Dividends in arrears are ________.
A) a liability on the balance sheet
B) passed dividends on noncumulative preferred stock
C) passed dividends on cumulative preferred stock
D) passed dividends on common stock
15) Saturn Corporation has 13,000 shares of 14%, $84 par noncumulative preferred stock outstanding and
20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation
declares a dividend of $180,000. How is the dividend allocated between preferred and common
stockholders?
A) The dividend is allocated $8,107 to preferred stockholders and $109,091 to common stockholders.
B) The dividend is allocated $152,880 to preferred stockholders and $27,120 to common stockholders.
C) The dividend is allocated $70,909 to preferred stockholders and $109,091 to common stockholders.
D) The dividend is allocated $235,200 to preferred stockholders and $55,200 to common stockholders.
16) Ramos Corporation reported the following equity section on its current balance sheet. The common
stock is currently selling for $18.00 per share.
Common Stock, $5 par, 194,000 shares authorized, 143,000 shares issued
and outstanding
Paid-In Capital in Excess of Par—Common
Retained Earnings
Total Stockholders’ Equity
$715,000
130,000
301,000
$1,146,000
After the declaration and distribution of a 20% stock dividend, what is the total number of common
shares issued?
A) 13,000
B) 160,160
C) 143,000
D) 17,160
17) Challenger Corporation currently has 120,000 shares outstanding of $1 par value common stock. The
stock was originally issued for $12 per share. On March 15, the board of directors declares and distributes
a 10% stock dividend when the stock is selling for $16 per share. Prepare the journal entry to record the
stock dividend.
18) On December 1, 2017, Galahad, Inc. had 200,000 shares of $1 par value common stock issued and
outstanding. The next day Galahad declared and distributed a 50% stock dividend. The market value of
the stock on December 2, 2017 was $9 per share. Prepare the journal entry for the transaction.
19) Which of the following occurs when the board of directors declares a 3-for-1 stock split on 20,000
outstanding shares of $25 par common stock?
A) The par value of the stock remains the same.
B) The par value of the stock increases to $50 per share.
C) The number of outstanding shares remains at 20,000.
D) The number of outstanding shares increases to 60,000.
20) Raedy Corporation reported the following equity section on its current balance sheet. The common
stock is currently selling for $20.25 per share.
Common Stock, $5 par, 337,000 shares authorized, 157,000 shares issued
and outstanding
Paid-In Capital in Excess of Par—Common
Retained Earnings
Total Stockholders’ Equity
$785,000
140,000
301,000
$1,226,000
After a 2-for-1 stock split, what is the number of issued shares?
A) 280,000
B) 314,000
C) 297,000
D) 140,000
21) ABC has 61,000 shares of $16.00 par common stock outstanding. ABC announces a stock split of 4-for1. What is the effect of the split?
A) par stays at $16.00; total shares increase to 15,250
B) par drops to $8.00; total shares stay at 61,000
C) par drops to $4.00; total shares increase to 244,000
D) par goes to $64.00; total shares increase to 244,000
1) Which of the following is the typical order of the sections on a statement of cash flows?
A) operating, financing, investing
B) financing, investing, operating
C) investing, operating, financing
D) operating, investing, financing
2) Johnson Tires Company uses the indirect method to prepare the statement of cash flows. Refer to the
following comparative balance sheet for Johnson Tires Company and complete the third column to show
the increases or decreases.
Johnson Tires Company
Comparative Balance Sheet
December 31, 2017 and 2016
Cash
Accounts Receivable
Merchandise Inventory
Total Assets
2016
$39,600
26,400
204,000
270,000
2015
$19,800
38,500
126,500
184,800
Accounts Payable
Accrued Liabilities
Long-term Notes Payable
Total Liabilities
4,800
2,400
100,800
108,000
6,600
1,100
99,000
106,700
Common Stock
Retained Earnings
Treasury Stock
Total Stockholders’ Equity
36,000
135,600
(9,600)
162,000
2,200
81,400
(5,500)
78,100
$270,000
$184,800
Total Liabilities and Stockholders’ Equity
Increase/
(Decrease)
3) Rodriguez Tint, Inc. uses the indirect method to prepare the statement of cash flows. Refer to the
following income statement:
Sales Revenue
Rodriguez, Inc.
Income Statement
Year Ended December 31, 2017
$154,000
Interest Revenue
Loss on Sale of Plant Assets
7,000
(5,400)
Total Revenues and Gains
Cost of Goods Sold
Salary Expense
Depreciation Expense
Other Operating Expenses
$155,600
130,000
21,000
7,400
13,400
Interest Expense
16,000
Income Tax Expense
6,000
Total Expenses
193,800
Net Income (Loss)
$(38,200)
Additional information provided by the company includes the following:
Current assets, other than cash, decreased by $5,100.
Current liabilities increased by $2,300.
Compute the net cash provided by (used for) operating activities.
A) $(18,000)
B) $(45,600)
C) $10,500
D) $23,400
4) Budget Auto Parts Company uses the indirect method to prepare the statement of cash flows. Refer to
the following income statement:
Budget Company
Income Statement
Year Ended December 31, 2017
Sales Revenue
$360,000
Interest Revenue
1,500
Gain on Sale of Plant Assets
6,000
Total Revenues and Gains
$367,500
Cost of Goods Sold
165,000
Salary Expense
67,500
Depreciation Expense
18,000
Other Operating Expenses
34,500
Interest Expense
1,500
Income Tax Expense
7,500
Total Expenses
294,000
Net Income (Loss)
$73,500
Additional information provided by the company includes the following:
Current assets other than cash increase by $36,000.
Current liabilities decrease by $1,500.
Prepare the operating activities section of the statement of cash flows.
5) Starfire Telescopes Company uses the indirect method to prepare the statement of cash flows. Refer to
the following income statement:
Starfire Telescopes Company
Income Statement
Year Ended December 31, 2017
Sales Revenue
Interest Revenue
Total Revenues
Cost of Goods Sold
Salary Expense
Depreciation Expense
Other Operating Expenses
Interest Expense
Income Tax Expense
Loss on Sale of Plant Assets
Total Expenses
Net Loss
$275,000
2,600
$277,600
135,000
66,500
32,000
35,900
2,400
6,500
2,000
280,300
($2,700)
Additional information provided by the company includes the following:
Current assets other than cash decreased by $25,000.
Current liabilities increased by $3,000.
Prepare the operating activities section of the statement of cash flows.
6) Manning Tint, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the
following portion of the comparative balance sheet:
Manning Tint, Inc.
Comparative Balance Sheet
December 31, 2017 and 2016
2016
2015
Cash
Increase/(Decrease)
$28,000
$25,000
$3,000
Accounts Receivable
32,000
38,000
(6,000)
Merchandise Inventory
55,000
25,000
30,000
Plant and Equipment
126,000
93,000
33,000
Accumulated Depreciation-Plant
and Equipment
(44,000)
(45,000)
(81,000)
$197,000
$136,000
$141,000
Total Assets
Additional information provided by the company includes the following:
1. Equipment was purchased for $66,000.
2. Equipment with a cost of $37,000 and accumulated depreciation of 7,200 was sold for $49,000.
What was the amount of net cash provided by (used for) investing activities?
A) $256,000
B) $17,000
C) $(256,000)
D) $(17,000)
7) Which of the following sections of the statement of cash flows includes activities that increase and
decrease long-term liabilities and stockholders’ equity?
A) the financing activities section
B) the operating activities section
C) the investing activities section
D) the non-cash investing and financing section
8) Tritan Company is preparing its statement of cash flows using the indirect method. Refer to the
following portion of the comparative balance sheet:
Tritan Company
Comparative Balance Sheet
December 31, 2017 and 2016
2016
2015
Increase/(Decrease)
Accounts Payable
$7,000
$5,000
$2,000
Accrued Liabilities
3,500
1,100
2,400
56,000
67,000
$(11,000)
$66,500
$73,100
$(6,600)
Long-term Notes Payable
Total Liabilities
Additional information provided by the company includes the following:
1. During 2016, the company repaid $35,000 of long-term notes payable.
2. During 2016, the company borrowed $24,000 on a new note payable.
Based on the above information only, what amount of net cash flow would be shown in the financing
section of the statement of cash flows?
A) $(11,000)
B) $11,000
C) $59,000
D) $(59,000)
9) The issuance of common stock for cash is shown as a ________.
A) negative cash flow in the investing activities section of the statement of cash flows
B) positive cash flow in the investing activities section of the statement of cash flows
C) negative cash flow in the financing activities section of the statement of cash flows
D) positive cash flow in the financing activities section of the statement of cash flows
10) O’Brien Coatings Company uses the indirect method to prepare its statement of cash flows. Refer to
the following information for 2017:
The beginning balance in the Cash account was $2,900.
Net cash provided by operating activities: $40,000
Net cash used for investing activities: $(25,500)
Net cash provided by financing activities: $1,700
The statement of cash flows will show ________.
A) ending cash of $16,200
B) total net cash flows of positive $65,500
C) total net cash flows of negative $16,200
D) ending cash of $19,100
11) Amber Corporation has provided the following information of its operating activities for the year:
Merchandise Inventory, January 1
Merchandise Inventory, December 31
Purchases
Selling and Administrative Expenses
Sales Revenue
$150,000
75,000
854,000
65,000
1,000,000
Required: Prepare Amber’s income statement for the year ended December 31. Use the format provided
below:
Sales Revenue
Cost of Goods Sold
Beginning Inventory
Purchases
Cost of Goods Available for Sale
Ending Inventory
Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses
Operating Income
12) Simons, Inc. sells plasticware. The following information summarizes Simons’ operating activities for
the year:
Utilities Expense
$ 65,000
Rent Expense
10,000
Sales Commissions Expense
32,500
Purchases of Merchandise
260,000
Merchandise Inventory on January 1
65,000
Merchandise Inventory on December 31
97,500
Sales Revenue
650,000
Prepare an income statement for Simons, Inc., a merchandiser, for the year ended December 31 using the
format below:
Sales Revenue
Cost of Goods Sold:
Beginning Inventory
Purchases
Cost of Goods Available for Sale
Ending Inventory
Cost of Goods Sold
Gross Profit
Selling Expenses:
Sales Commissions Expense
Administrative Expenses:
Rent Expense
Utilities Expense
Total Operating Expenses
Operating Income
13) Anything for which managers want a separate measurement of cost is called a ________.
A) responsibility center
B) cost object
C) profit object
D) conversion cost
14) Define direct cost. Give an example
15) Define indirect cost. Give an example
16) Period costs are the ________.
A) product costs that must be paid in the accounting period in which they are incurred
B) costs that are incurred and expensed during the same accounting period
C) costs related to production of products the company purchases and sells
D) same as manufacturing overhead costs
17) Which of the following is an example of a period cost for a manufacturing company?
A) advertising expense
B) depreciation on factory equipment
C) indirect materials
D) property taxes for the factory
18) Which of the following is an example of direct labor cost in a factory?
A) wages of assembly line personnel
B) salary of vice president of production
C) wages of factory security guard
D) salary of production manager
19) Which of the following will be included in manufacturing overhead costs?
A) indirect labor and indirect materials used
B) salaries of salesmen
C) direct materials and direct labor
D) delivery costs to ship goods to customers
20) Kyanite Corporation, a manufacturer, reports costs for the year as follows:
Direct Materials Used
Wages to Line Workers
Office Rent
Indirect Materials Used
$735,000
510,000
26,000
700,000
How much is the total period costs for Kyanite?
A) $735,000
B) $510,000
C) $26,000
D) $700,000
21) Daryl Corporation reports costs for the year as follows:
Direct Materials Used
Wages to Line Workers
Office Rent
Indirect Materials Used
$780,000
245,000
33,000
800,000
How much is the total product costs for the year?
A) $800,000
B) $1,825,000
C) $1,858,000
D) $1,025,000
22) Which of the following is a product cost?
A) sales commissions
B) CEO’s salary
C) delivery van depreciation
D) depreciation on production equipment
23) Which of the following correctly describes the accounting for indirect labor costs?
A) Indirect labor costs are product costs and are expensed as incurred.
B) Indirect labor costs are period costs and are expensed as incurred.
C) Indirect labor costs are product costs and are expensed when the manufactured product is sold.
D) Indirect labor costs are period costs and are expensed when the manufactured product is sold.
24) Which of the following correctly describes the accounting for factory depreciation?
A) Factory depreciation is a product cost and is expensed as incurred.
B) Factory depreciation is a period cost and is expensed as incurred.
C) Factory depreciation is a product cost and is expensed when the manufactured product is sold.
D) Factory depreciation is a period cost and is expensed when the manufactured product is sold.
25) Ferrell, Inc. used $213,000 of direct materials and incurred $111,000 of direct labor costs during the
year. Indirect labor amounted to $8,100, while indirect materials used totaled $4,800. Other operating
costs pertaining to the factory included utilities of $9,300; maintenance of $13,500; repairs of $5,400;
depreciation of $23,700; and property taxes of $7,800. There was no beginning or ending finished goods
inventory. The Work-in-Process Inventory account reflected a balance of $16,500 at the beginning of the
period and $22,500 at the end of the period.
Required: Prepare a schedule of cost of goods manufactured for Ferrell, Inc. using the format below.
Cost of Goods Manufactured
Beginning Work-in-Process Inventory
Direct Materials Used
Direct Labor
Manufacturing Overhead:
Indirect Labor Used
Indirect Materials
Utilities
Maintenance
Repairs
Depreciation
Property Taxes
Total Manufacturing Overhead
Total Manufacturing Costs Incurred
during the Year
Total Manufacturing Costs to Account
For
Ending Work-in-Process Inventory
Cost of Goods Manufactured

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