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Confirmed at the meeting of the department of "Socio-Economic Disciplines" Minute №____ from ____ of 2015.The dean of the faculty "International Educational Programs" Ronald Voogdt _____________

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EXAMINATION CARD № 1

on the discipline “Financial Accounting”for the 3rd year students

1. What are cash equivalent?2. Jacobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local

bank on April 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.

3. Georgia Products Co. had the following positive cash flows during the current year: received cash from customers of $ 750,000; received bank loans of $ 35,000; and received cash from the sale of common stock of $ 145,000. During the same year, cash was paid out to purchase inventory for $ 335,000, to employees for $ 230,000, and for the purchase of plant assets of $ 190,000. Calculate the amount of cash provided by or used for operating activities by the direct method.

Lecturer A. Kaldarova ______________________


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1. What is a capital expenditures?2. Alpha Co sold 10 000 shares of common stock, which has a par value of $ 10, for $13

per share. The company’s balance in retained earning is $75 000. Prepare the stockholders’ equity section of the company’s balance sheet.

3. Assume that the following information relates to your most recent bank statement dated September 30:Balance per bank statement at September 30: ………………………………….$3400

Checks written that had not cleared the bank as of September 30:#203 University tuition $1,500 #205 University bookstore 350 #208 Rocco's pizza 25 #210 Stereo purchase 425 #211 October apartment rent 500

Interest amounting to $4 was credited to your account by the bank in September. The bank's service charge for the month was $5. In addition to your bank statement, you received a letter from your parents on October 2 informing you that they had made a $2,400 electronic funds transfer directly into your account. After reading your parents' letter, you looked in your checkbook and discovered its balance was $601. Adding your parents' deposit brought that total to $3,001.

Prepare a bank reconciliation to determine your correct checking account balance. Explain why neither your bank statement nor your checkbook shows this amount.



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1. Differences between current and long-term liabilities. 2. A company had the following positive and negative cash flows during the current year

Positive Cash Flows:Received from Customers - $180,000Interest & Dividends - $60,000Sale of plant assets - $220,000Negative Cash FlowsPaid to suppliers and employees - $80,000Purchase of Investments - $25,000Purchase of treasury stock - $47,000

Determine the amount of cash used for or provided by for operating activities by the direct method.

3. Smart Hardware purchases new shelving for its store on April 1, 2009. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase:

Cost of the shelving………………………………$12,000Freight charges……………………………………..$520Sales taxes………………………………………….$780Installation……………………………………… $2,700Cost to repair shelf damaged during installation….$400

InstructionsCompute depreciation expense for the year 2009 through 2012, 200% declining-balance



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1. Stockholders prefer to invest in preferred stock because…2. Many companies hold a significant portion of their financial assets in the form of marketable

securities. For example, Microsoft Corporation recently reported investments in marketable securities totaling $ 14.5 billion, an amount equal to 38 percent of its total financial assets. In contrast, only 24 percent of its financial assets were in the form of accounts receivable. Define marketable securities ( also referred to as short- term investments). What characteristics of these securities justify classifying them as financial assets?

3. Cronan, Inc., sells $1,000,000 general obligation bonds for 98. The interest rate on the bonds, paid quarterly, is 6 percent. Calculate the amount that the company will actually receive from the sale of the bonds. Calculate the amount of both the quarterly and the total annual cash interest that the company will be required to pay



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1. In what case we spend cash?2. Starlight a Broadway media firm uses the balance sheet approach to estimate uncollectible

accounts expense. At year- end an aging of the accounts receivable produced the following five groupings:

a. Notyetdue…………………………………………… $500,000b. 1-30 dayspastdue…………………………………… 110,000c. 31-60 dayspastdue……………………………………. 50,000d. 61-90 dayspastdue……………………………………. 30,000e. over 90 days past due………………………………….. 60,000Total………………………………………………………. $750,000

On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age group to be as follows: Group a, 1 Percent; Group b, 3 Percent; Group c, 10 Percent; Group d, 20 percent; and Group e, 50 Percent. The Allowance for doubtful accounts before adjustment at December 31 showed a credit balance of $ 4700.

3. Reeves, Inc., sold 1 000 000 share of $25 par value common stock at $30. It subsequently repurchased 100 000 of those shares at $50 per share and then sold 70 000 of those shares at 55$. Calculate the total amount of stockholders’ equity given the above transactions.



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1. What is the income statement?2. Swanson & Hiller, Inc., purchased a new machine on September 1, 2006, at cost of $108,000.

The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $8,000.

InstructionsPrepare a complete depreciation schedule, beginning with calendar year 2006 . Straight-line method.

3. Pearl Company sells $ 1,000,000 general obligation bonds for 101. The interest rate on the bonds, paid quarterly, is 5 percent. Calculate the amount that the company will actually receive from the sale of the bonds, and the amount of both the quarterly and the total annual cash interest that the company will be required to pay.



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. Explain what amount is recorded in the additional paid-in capital account when stock is issued.

2. Texas, Inc., sold common stock for $560,000 and preferred stock for $36,000 during the current year. In addition, the company purchased treasury stock for $35,000 and paid dividends on common and preferred stock for $24,000.Determine the amount of cash provided by or used for financing activities during the year

3. Magnum Plus, Inc., is a manufacturer of hunting supplies. The following is a summary of the company's annual payroll-related costs:

Wages and salaries expense (of which $2,200,000 was withheldfrom employees' pay and forwarded directly to tax authorities)

$ 7 200 000

Payroll taxes $ 580 000Workers' compensation premiums $ 250 000Group health insurance premiums $725 000Contributions to employees' pension plan

$ 450 000

a. Compute Magnum’s total payroll-related costs for the year.b. Compute the net amount of cash actually paid to employees (their take-home pay)



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1. Main categories of CF statement2. Super Star, a Hollywood publicity firm, uses the balance sheet approach to estimate uncollectible

accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings:

a. Not yet due…………………………………………….. $500,000

b. 1-30 days past due…………………………………… 210,000

c. 31-60 days past due……………………………………. 80,000

d. 61-90 days past due……………………………………. 15,000

e. over 90 days past due………………………………….. 30,000

Total………………………………………………………. $835,000

On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age group to be as follows: Group a, 1 Percent; Group b, 3 Percent; Group c, 10 Percent; Group d, 20 percent; and Group e, 50 Percent.

The Allowance for doubtful accounts before adjustment at December 31 showed a credit balance of $ 11,800.

Instructions

a. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount.

b. Assume that on January 10 of the following year, Super Star learned that an account receivable that had originated on September 1 in the amount of $8,250 was worthless because of the bankruptcy of the client, April Showers. Prepare the journal entry required on January 10 to write off this account.

3. During the current year, Black Corporation incurred the following expenditures which should be recorded either as operating expenses or as intangible assets:a. Expenditures were made for the training of new employees. The average employee remains

with the company for 5 years, but is trained for a new position every two years.b. Black purchased a controlling interest in a vinyl flooring company. The expenditure resulted

in the recording of a significant amount of goodwill. Black expects to earn above-average returns on this investment indefinitely.

c. Black incurred large amounts of research and development costs in developing a dirt-resistant carper fiber. The company expects that the fiber will be patented and that sales of the resulting products will contribute to revenue for at least 25 years. The legal life of the patent, however, will be only 20 years.

d. Black made an expenditure to acquire the patent on a popular carpet cleaner. The patent had a remaining legal life of 14 years, but Black expects to produce and sell the product for only six more years.

e. Black spent a large amount to sponsor the televising of the Olympic Games. Black’s intent was to make television viewers more aware of the company’s name and its product lines.



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EXAMINATION CARD № 9 on the discipline “Financial Accounting”

for the 3rd year students1. Plant and equipment items are often classified into the following groups:…….2. When Resisto Systems, Inc., was formed, the company was authorized to issue 5,000

shares of $100 par value, 8 percent cumulative preferred stock, and 100,000 shares of $2 stated value common stock.Half of the preferred stock was issued at a price of $103 per share, and 70,000 shares of the common stock were sold for $13 per share. At the end of the current year, Resisto has retained earnings of $382,000.Prepare the stockholders’ equity section of the company’s balance sheet at the end of the current year?

3. During the fiscal year ended December 31, Swanlee Corporation engaged in the following transactions involving notes payable:

July. 1 Borrowed $20,000 from Weston Bank, signing a 90-day, 12 percent note payable.

Sep.16 Purchased office equipment from Moontime Equipment. The invoice amount was $30,000, and Moontime agreed to accept, as full payment, a 10 percent, three-month note for the invoice amount.

Oct. 1 Paid Weston Bank the note plus accrued interest.

Dec. 1 Borrowed $100,000 from Jean Will, a major corporate stockholder. The corporation issued Will a $100,000, 9 percent, 120-day note payable.

Dec. 1 Purchased merchandise inventory in the amount of $10,000 from Listen Corporation. Listen accepted a 90-day, 12 percent note as a full settlement of the purchase. Swanlee Corporation uses a perpetual inventory system.

Dec. 16 The $30,000 note payable to Moontime Equipment matured today. Swanlee paid the accrued interest on this note and issued a new 60-day, 16 percent note payable in the amount of $30,000 to replace the note that matured.

Instructions

a. Prepare journal entries (in general journal form) to record the above transactions. Use a 360-day year in making the interest calculations.

b. Prepare the adjusting entry needed at December 31, prior to closing the accounts. Use one entry for all three notes (round to the nearest dollar).



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1. Describe the types of cash payments summarized by the caption “cash paid to suppliers and employees”.

2. The cash transactions and cash balances of Dodge inc., for November were as follows: The ledger account for Cash showed a balance at July 30 of $ 6 750. The November bank statement showed a closing balance of $4 710 . The cash received on November 30 amounted to $3 850 . It was left at the bank in the night

depository chute after banking hours on November 30 and therefore was not recorded by the bank on the November statement.

Also included with the November bank statement was a debit memorandum from the bank for $15 representing service charges for November.

A credit memorandum enclosed with the November bank statement indicated that a non-interest bearing note receivable for $4,000 from Wright Sisters, left with the bank for collection, had been collected and the proceeds credited to the account of Dodge inc

Comparison of the paid cheeks returned by the bank with the entries in the accounting records revealed that check no. 810 for $430, issued November 15 in payment for office equipment, had been erroneously entered in Dodge s records as $ 340.

Examination of the paid cheeks also revealed that three cheeks, all issued in November , had not yet been paid by the bank: no.814 for $115; no.816 for $170; no. 830 for $530.

Included with the November bank statement was a $2900 check drawn by Howard Williams, a customer of Dodge. Inc., This check was marked “NSF.” It had been included in the deposit of November 27 but had been charged back against the company’s account on November 31.

Prepare a bank reconciliation statement for Dodge. Inc., at November 30.

3. Cromley Corporation reports annual sales of $ 1 500 000. Its accounts receivable throughout the year averaged $125 000.

a. Compute the company’s accounts receivable turnover rate.b. Compute the average days outstanding of the company’s accounts receivable.



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1. A basic difference between loss contingencies and «real» liabilities is 2. Johnston, Inc., engaged in the following transactions involving treasury stock:

Feb. 10 Purchased for cash 17,000 shares of treasury stock at a price of $25 per share.June 4 Reissued 6,000 shares of treasury stock at a price of $33 per share.Dec. 22 Reissued 4,000 shares of treasury stock at a price of $22 per share. Prepare general journal entries to record these transactions. Compute the amount of retained earnings that should be restricted because of the

treasury stock still owned at December 313. During the current year, Omega Products Corporation incurred the following expenditures which

should be recorded either as operating expenses or as intangible assets:a. Expenditures were made for the training of new employees. The average employee

remains with the company for 5 years, but is trained for a new position every two years.b. Omega Products purchased a controlling interest in a wallpaper company. The

expenditure resulted in the recording of a significant amount of goodwill. Omega Products expects to earn above-average returns on this investment indefinitely.

c. Omega Products incurred large amounts of research and development costs in developing a supervisor product. The company expects that it will be patented and that sales of the resulting products will contribute to revenue for at least 40 years. The legal life of the patent, however, will be only 20 years.

d. Omega made an expenditure to acquire the patent on a whatsa. The patent had a remaining legal life of 10 years, but Omega expects to produce and sell the product for only four more years.

e. Omega spent a large amount to sponsor the televising of the WorldSeries. Omega’s intent was to make television viewers more aware of the company’s name and its product lines.



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1. What is depreciation?

2. A portion of the stockholders' equity section from the balance sheet of Walland Corporation appears as follows:

Stockholders' equityPreferred stock, 9% cumulative, $50 par, 40,000 shares authorized, issued and

outstanding……………………………………………………………..………. $2,000,000

Preferred stock, 12% non-cumulative, $100 par, 8,000 shares authorized, issued and outstanding…………………………………………………………..……………. $800,000

Common Stock, $5 par, 400,000 shares authorized, issued & outstanding……. $2,000,000Total paid in capital- $4,800,000

Assume that all the stock was issued on January 1 and that no dividends were paid during the first two years of operation. During the third year, Walland Corporation paid total cash dividends of $736,000.

a) Compute the amount of cash dividends paid during the 3rd year to each of three classes of stock.

b) Computer the dividends paid per share during the 3rd year for each of the 3 classes of stock.

3. On March 31, 2011, Gardner Corporation received authorization to issue $50,000 of 9 percent, 30-year debenture bonds. The bonds pay interest on March 31 and September 30. The entire issue was dated March 31, 2011, but the bonds were not issued until April 30, 2011. They were issued at face value.

a. Prepare the journal entry at April 30, 2011 to record the sale of the bonds.b. Prepare the adjusting entry at September 30, 2011 to record the semi-annual bond interest payment.



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1. What is treasury stock? How is it reported on the financial statements?2. Company had the following positive cash flows during the current year: received cash from

customers of $ 540,000; received bank loans of $ 28,000; and received cash from the sale of common stock of $ 137,000. During the same year, cash was paid out to purchase inventory for $ 265,000, to employees for $ 270,000, and for the purchase of plant assets of $ 170,000. Calculate the amount of cash provided by or used for operating activities by the direct method.

3. The following are selected items from the accounting records of Atlanta Peach for the year ended December 31, 2009

Note payable to Southern Bank 250 000 $Income taxes payable 15 000$Accrued expenses and payroll taxes 26 000$Mortgage note payable 750 000 $Accrued interest on mortgage note payable

15 000$

Trade accounts payable 275 000$Unearned revenue 33 000$Potential liability in pending lawsuit 2 000 000$

Other information 1. The note payable to Southern Bank is due in 60 days. Arrangements have been made to renew this note for an additional 24 months 2. The mortgage requires payments of $ 10 000 per month. An amortization table shows that its balance will be paid down to $ 733 000 by December 31, 2010 3. Accrued interest on the mortgage note payable is paid monthly. The next payment is due near the end of the first week in January 2010 4. Atlanta Peach has been sued for $ 2 000 000 in a product damage case. It is not possible at this time. However to make a reasonable estimate of the possible loss, if any that the company may have sustained Using the information provided prepare the current and long-term liability sections of the company’s balance sheet dated December 31, 2009 (Within each classification items may be listed in any order)



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1. Define “unearned revenue” 2. Wilson Corporation uses an income statement approach to estimate credit losses. Its gross

Accounts Receivable of $5,000,000 at the beginning of the period had a net realizable value of $4,925,000. During the period, the company wrote off actual accounts receivable of $100,000 and collected $7,835,000 from credit customers. Credit sales for the year amounted to $9,000,000. Of its credit sales, 1 percent was estimated to eventually be uncollectible.

Determine the net realizable value of the company’s account receivable at the end of the period. 3. Jell Stores is considering expanding its operations to include the greater Boston area. Rather

than build new stores in the Boston area, management plans to acquire existing stores and convert them into Jell outlets.

Carnie’sMell’s

Estimated normal rate of return on net assets ………………........ 20% 20%Fair value of net identifiable assets ………………………………… $900,000 $980,000Actual average net income for past five years …………………… $250,000 $280,000

InstructionsCompute an estimated fair value for any goodwill associated with Jell purchasing Carnie’s. Base your computation an assumption that successful service station typically sell at about 10 times their annual earnings.



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1. What kind of methods of depreciation you know?2. On September 1, 2009, Health Wise International acquired a 12 percent, nine-month note

receivable from Herbal Innovations, a credit customer, in settlement of a $22,000 account receivable.Prepare journal entries to record the following:a. The receipt of the note on September 1, 2009, in settlement of the account receivable.b. The adjustment to record accrued interest revenue on December 31, 2009.c. The collection of the principal and interest on May 31, 2010.

3. Olympic inc had the following positive and negative cash flows during the current year

Positive Cash Flows:Received from Customers - $240,000Interest & Dividends - $50,000Sale of plant assets - $330,000

Negative Cash FlowsPaid to suppliers and employees - $127,000Purchase of Investments - $45,000Purchase of treasury stock - $36,000

Determine the amount of cash used for or provided by for operating activities by the direct method.



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1. What called an underwriter ? 2. Early in the year Bill Barnes and several friends organized a corporation called Barnes

Communications, Inc. The corporation was authorized to issue 50,000 shares of $100 par value, 10 percent cumulative preferred stock and 400,000 shares of $2 par value common stock. The following transactions (among others) occurred during the year.

Jan. 6 Issued for cash 20,000 shares of common stock at $14 per share. The shares were issued to Barnes and 10 others.Jan. 7 Issued an additional 500 shares of common stock to Barnes in exchange for his services in organizing the corporation. The stockholders agreed that these services were worth $7,000.Jan. 12 Issued 2,500 shares of preferred stock for cash of $250,000.June 4 Acquired land as a building site in exchange for 15,000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that the common stock was to be valued for purposes of this transaction at $15 per share.Nov. 15 The first annual dividend of $10 per share was declared on the preferred stock to be paid December 20. (Hint: Record the dividend by debting Dividends and crediting Dividends Payable.)Dec. 20 Paid the cash dividend declared on November 15.Dec. 31 After the revenue and expenses were closed into the Income Summary account, that account indicated a net income of $147,200.

Prepare journal entries in general journal form to record the above transactions. Include entries at December 31 to close the Income Summary account and the Dividends account.3. Cromley Corporation reports annual sales of $ 1 500 000. Its accounts receivable

throughout the year averaged $125 000.c. Compute the company’s accounts receivable turnover rate.d. Compute the average days outstanding of the company’s accounts receivable.



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1. What is the treasure stock? 2. Purple & Orange, Inc., sold $700,000 of bonds on an interest payment date at 102.

Assuming the bonds will be retired in 10 years and interest is paid annually, calculate the amount of cash that will be received and paid by Purple & Orange in the first full year, as the amount of interest expense that will be recognized in the year. The bonds carry a stated interest rate of 6.5 percent.

3. The Cash account in the general ledger of Lyco Corporation showed a balance of $21,749 at December 31 (but prior to performing a bank reconciliation). The company's bank statement showed a balance of $22,000 at the same date. The only reconciling items consisted of: (1) a $5,000 deposit in transit, (2) a bank service charge of $200, (3) outstanding checks totaling $9,000, (4) a $3,000 check marked "NSF" from Susque Company, one of Lyco's customers, and (5) a check written for office supplies in the amount of $1,832, recorded by the company's bookkeeper as a debit to Office Supplies of $1,283, and a credit to Cash of $1,283. In addition to the above information, Lyco owned the following financial assets at December 31: (1) a money market account of $60,000, (2) $3,000 of high-grade, 120-day commercial paper, and (3) $5,000 of highly liquid stock investments.

Prepare the company’s December 31 bank reconciliation



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1. Describe the classification of cash flows? 2. Mathews Bus Service Traded in a used bus for a new one. The original cost of the old bus was

$52,000. Accumulated depreciation at the time of the trade in amounted to $34,000. The new bus cost $65,000, but Mathews was given a trade in allowance of $10,000.a. What amount of cash did Mathews have to have to acquire the new bus?b. Compute the gain or loss on the disposal for financial reporting purposes.c. Explain how the gain or loss would be reported in the company’s income statement.

3. Johnston, Inc., engaged in the following transactions involving treasury stock:Feb. 10 Purchased for cash 17,000 shares of treasury stock at a price of $25 per share.June 4 Reissued 6,000 shares of treasury stock at a price of $33 per share.Dec. 22 Reissued 4,000 shares of treasury stock at a price of $22 per share. Prepare general journal entries to record these transactions. Compute the amount of retained earnings that should be restricted because of the

treasury stock still owned at December 31



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1. What is often called markaet-to market? 2. Texas, Inc., sold common stock for $560,000 and preferred stock for $36,000 during the current

year. In addition, the company purchased treasury stock for $35,000 and paid dividends on common and preferred stock for $24,000.Determine the amount of cash provided by or used for financing activities during the year

3. Lake Company obtained authorization to issue 10-year bonds with a face value of $ 5 million. The bonds are dated June 1, 2009 and have a contract rate of interest of 6 percent. They pay interest on December 1 and June1. The bonds are issued on September1, 2009 at 100 plus three months accrued interest. Instructions a. September 1, 2009 to record the issuance of the bonds b. December 1, 2009 to record the first semiannual interest payment on the bond issue c. December 31, 2009 to record interest expense accrued through year-end d. June 1 , 2010 to record the second semiannual interest payment



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1. In what case we receive cash?2. Smalley, Inc., has preferred and common stock outstanding as follows:

$5 preferred stock, 40,000 shares $100 par value.................$4,000,000Common stock, 500,000 shares at $10 par value....................... 5,000,000Additional paid-in capital on common stock................................ 800,000Retained earnings....................................................................... 1,750,000

Calculate the book value on common stock, assuming preferred dividends are cumulative and are currently one year in arrears.

3. Following are the average accounts receivable and net sales reported recently by two large beverage compamies (dollar amount are stated in millions):

Average accounts receivable Net salesMolson Coors Brewing Co $ 720 $ 8320Anheuser Busch Companies inc 900 17400

a. Compute the accounts receivable turnover rate each company (round your result o one decinal place)

b. Compute the average number of days that it takes for each company o collect its accounts receivable (round your result t the nearest whole day )



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1. What is the impairment loss?2. Fox Company has debt totaling $2,000,000 and total stockholders' equity of

$4,000,000. Wolfe Company has debt totaling $3,000,000 and stockholders' equity of $5,000,000. Calculate the debt ratio for each company. Briefly explain the meaning of the debt ratio

3. The following information is necessary to compute the net assets (stockholders' equity) and book value per share of common stock for Rothchild Corporation:

8% cumulative preferred stock, $100 par- $200,000Common stock, $5 par, authorized 100,000 shares, issued 60,000 shares- $300,000Additional paid-in capital- $452,800Deficit (negative amount in retained earnings)- $146,800Dividends in arrears on preferred stock, 1 full year- $16,000A. Compute the amount of net assets (stockholders' equity).Amount of net assets ?______________B. Compute the book value per share of common stock.Book value per share? _______________________



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1. When accrued liabilities arise? 2. Davidson, DDD, purchases new furniture for its store on May 1, 2009. The furniture is expected

to have a 10-year life and no residual value. The following expenditures were associated with the purchase:

Cost of the shelving……………………………………… …$11,000Freight charges…………… …………………… …..$325Sales taxes……………………………………………… .$550Installation……… ………………………………………$75Cost to repair shelf damaged during installation…… ….$400InstructionsCompute depreciation expense for the year 2009 through . 150% declining-balance method

3. Walla Company has common and preferred stock outstanding as follows:

Common stock:100,000 shares, $30 par value 8 percent preferred stock:10,000 shares, $100 par value

Dividends on preferred stock have not been paid for the last three years (in addition to the current year). If the company pays a total of $120,000 in dividends, how much will the common stockholders receive per share if the preferred stock is not cumulative? How much will the common stockholders receive per share if the preferred stock is cumulative?



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1. What does book value per share of common stock represent?2. Garagiola Company had net income in the current year of $ 430,000. Depreciation expense for

the year totaled $ 67,000. During the year the company experienced an increase in accounts receivable ( all from sales to customers) of $ 35,000 and an increase in accounts payable ( all to suppliers) of $ 56,000.Compute the amount of cash provided by or used for operating activities by the indirect method.

3. Swanson Corporation issued $ 8 million of 20 year, 8 percent bonds o n April 1, 2009, at 102. Interest is due on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2029. Swanson's fiscal year ends on December 31.

Prepare the following journal entries: a. April 1, 2009 to record the issuance of the bondsb. Sept 30, 2009 pay interest and amortize the bond premiumc. March 31, 2029, to pay interest, amortize the bond premium, and retire the bonds

at maturity (make two separate entries).



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1. What is allowance for doubtful accounts? 2. Mega Inc has common and 6 % preferred stock outstanding as follows:

Preferred stock 10,000 shares, $100 par value, cumulativeCommon stock: 50,000 shares, $50 par valueThe company declares a total dividend of $200,000If the dividends on preferred stock are one year in arrears ( in addition to the current year), how will the total dividends be divided between the common and preferred stock?

3. Zephre Company reported net income for the year of $56.000. Depreciation expense for the year was $12,000. During the year, accounts receivable increased by $4,000, inventory decreased by $6,000, accounts payable increased by $3,000, and accrued expenses payable decreased by $2,000. Reconcile the amount of net income to the amount of cash provided by or used for operating activities.



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1. Purposes of the statement of CF?2. Joseph Max, Inc., sold 10-year, 7 percent bonds for $1,000,000 at 98. On the interest

payment date at the end of the 5th year the bonds were outstanding, 50 percent of the bonds were retired by Max at 101 under an early retirement option that was written into the bond agreement. Determine the gain or loss that Max will incur as a result of retiring the bonds.

3. Menza Company has stockholders’ equity accounts as follows: Common stock ( 100,000 shares @ $ 10 par value). . . . . $ 1,000,000

Additional paid- in capital on common stock . . . … …… ..750,000Retained earnings. . ………………………………… .. . . .600,000

Calculate the amount of book value per share for common stock and summarize briefly what that figure means in relation to the current market value of the stock.



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1. What is Dividend in Arrears? Explain please.2. Watson,Inc.,had a cash balance at the beginning of the year of 89,000$. During the

year,the following cash flows occurred:

From operating activities ……………………….136000from investing activities………………………….(56000)from financing activities………………………….(34000)Prepare an abbreviated statement of cash flows, including a reconciliation of the beginning and ending cash balances for the year. 3. Pachel Corporation reports the following information pertaining to its accounts

receivable:

Days Past Due Current 1–30 31–60 61–90 Over 90 $ 60,000 $ 40,000 $ 25,000 $ 12,000 $ 2,000

The company's credit department provided the following estimates regarding the percent of accounts expected to eventually be written off from each category listed above: Current receivables outstanding 2 % Receivables 1–30 days past due 4 Receivables 31–60 days past due 16 Receivables 61–90 days past due 40 Receivables over 90 days past due 90

The company uses a balance sheet approach to estimate credit losses.

Record the company's uncollectible accounts expense, assuming it has a $1,400 credit balance in its Allowance for Doubtful Accounts prior to making the necessary adjustment.


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