25 Questions

”
Question 14 ptsWhen a new partner is admitted to an existing partnership, whether by contributing cash, property, or expertise, an adjustment of the accounts of the partnership to current value should be made (if necessary). Any such adjustment should be made to the capital accounts ofthe existing partners (only) in their income/loss sharing ratio.the existing partners (only) in the ratio of their beginning-of-period capital accounts.the existing partners AND the new partner in their income/loss sharing ratio.the existing partners AND the new partner in the ratio of their beginning-of-period capital accounts.Flag this QuestionQuestion 24 ptsErnie and Bert agree to form a partnership. Because the two are great friends, no written partnership agreement is made. Ernie agrees to contribute $100,000 in assets and to devote half of his time to the partnership. Bert is to contribute $40,000 in assets and to devote all of his time to running the operations of the partnership. Ernie and Bert will divide any net income or net loss in the following ratio (respectively):5 : 210 : 41 : 11/2 : 1Flag this QuestionQuestion 34 ptsLiquidation of an existing partnership must be done in a precise order. The proper steps to follow when liquidating a partnership aresell assets, distribute gains or losses to partners based on income sharing ratio, pay the liabilities with the cash from sale of assets, distribute remaining cash based on capital account balances.sell assets, pay liabilities off, distribute gains or losses based on income sharing ratio, distribute cash based on income sharing ratio.sell assets, distribute gains or losses based on capital account balances, pay liabilities off, distribute remaining cash based on capital account balances.sell assets, distribute cash based on income sharing ratio, pay liabilities off, distribute remaining cash based on income sharing ratio.Flag this QuestionQuestion 44 ptsLarry, Curly, and Moe form a partnership on 01/01/2019. Terms of the written partnership agreement state that net income/loss is to be split in the ratio of 5 : 3 : 2, respectively, after salaries and 10% interest on beginnig-of-the-year capital balances are considered. On 01/01/2019, capital contributions by the three are as follows: Larry — $50,000, Curly — $70,000, Moe — $90,000. Salaries paid during 2019 are as follows: Larry — $40,000, Curly — $45,000, Moe — $60,000. Net income for the partnership for 2019 is $125,000. At 12/31/2019, after closing entries are made, what is the capital account for Curly?$62,500$70,000$107,500$151,000Flag this QuestionQuestion 54 ptsIf a bonus is to be paid to an incoming new partner, this indicates that the incoming partner is contributing more to the partnership than the existing partners’ capital accounts after admission of the new partner.is contributing the same amount to the partnership as the existing partners’ capital accounts after admission of the new partner.is contributing less to the partnership than the existing partners’ capital accounts after admission of the new partner.The answer cannot be determined without additional information being provided.Flag this QuestionQuestion 64 ptsWhich of the following is/are characteristics of an LLC?An LLC may elect to be taxed like a partnership, so that the income/loss of the LLC “flows through” to the LLC’s members.Members of an LLC have limited liability, which means their personal assets are protected from the LLC’s creditors’ claims.In general, an LLC has access to capital (funds) more easily than a partnership.All of the above are characteristics of an LLC.Flag this QuestionQuestion 74 ptsProbably the major disadvantage of the standard corporation form of business islimited liability.double taxation of dividends paid to shareholders.limited life.an ability to issue bonds as a form of raising funds.Flag this QuestionQuestion 84 ptsWhen a cash dividend is paid to shareholders by a corporation, three dates are significant — the date of declaration, the date of record, and the date of payment. Which of these require(s) no journal entry to be made in the books and records of the corporation?Date of declarationDate of recordDate of paymentBoth the date of declaration and the date of payment do not require journal entries by the corporation. Only the shareholder needs to make journal entries on these dates.Flag this QuestionQuestion 94 ptsThe name of the stock that is allowed to vote in elections for the board of directors of a corporation ispreferred stock.common stock.treasury stock.trade stock.Flag this QuestionQuestion 104 ptsBlatt, Inc. is incorporated on 01/01/2019. Blatt’s articles of incorporation specify that the corporation’s par value of common stock is $10 per share. When Blatt sold common stock to its initial shareholders on 01/01/2019, it did so for $50 per common share. 10,000 shares were sold in this initial offering. The correct journal entry for Blatt to make on 01/01/2019 isdebit cash $500,000, credit common stock $500,000.debit common stock $100,000, debit paid-in capital $400,000, credit cash $500,000.debit cash $500,000, credit common stock $100,000, credit paid-in capital in excess of par $400,000.debit common stock $500,000, credit cash $500,000.Flag this QuestionQuestion 114 ptsThe cost method is almost always used to record treasury stock purchases. This means that the corporation has purchased its own stock — either from a shareholder or on the open market — and debited the full purchase price to Treasury Stock. Which of the following is a reason for a corporation to purchase its own shares and put them in the treasury?The cost of the treasury shares is a tax deductible item on the corporate income tax return.The corporation is able to pay itself a dividend if it owns its own shares of stock.The corporation is able to “stockpile” shares of its own stock to give to key employees as bonuses.The corporation is required by the Securities and Exchange Commission (SEC) to purchase its own shares periodically.Flag this QuestionQuestion 124 ptsDamion Enterprises, Inc. has the following stockholders’ equity section at 12/31/2018: Common stock, $10 par, 100,000 shares authorized, 20,000 shares issued and outstanding $200,000 Paid-in capital-common stock 700,000 Retained earnings 3,600,000 Total stockholders’ equity $4,500,000Damion splits its common stock 4-for-1 on 05/31/2019 when the value of its stock on the open market is $60 per share. The entry that Damion should make when this transaction takes place is as follows:Debit Stock Dividend Distributable $4,800,000, credit Common Stock $800,000, credit paid-in capital $4,000,000Debit Cash $800,000, credit Common Stock $800,000Debit Common Stock $800,000, credit Cash $800,000No journal entry is necessary for a stock split.Flag this QuestionQuestion 134 ptsIn addition to its common stock, Royale, Inc. sold cumulative preferred stock to shareholders at the corporation’s inception (i.e., at the first of Year 1). The dividend due to the preferred shareholders each year is $50,000. Royale did not pay any dividends to its shareholders in Year 1 or Year 2. In Year 3, a total dividend of $90,000 is declared and paid by Royale. The total dividend to be paid to preferred shareholders in Year 4 is$50,000.$90,000.$110,000.$150,000.Flag this QuestionQuestion 144 ptsThe option to call a callable bond rests withthe bondholder.the issuing corporation.either the bondholder or the issuing corporation, depending on the circumstances surrounding the issuance of the bond.the Securities and Exchange Commission.Flag this QuestionQuestion 154 ptsWhen a corporation is in default and is forced into bankruptcy, bondholder claims on corporate assets for satisfaction of amounts due them are rankedahead of common stockholders but after preferred stockholders’ claims are satisfied.ahead of preferred stockholder claims but after common stockholders’ claims are satisfied.ahead of both common stockholders’ claims and preferred stockholders’ claims.after both common stockholders’ claims and preferred stockholders’ claims are satisfied.Flag this QuestionQuestion 164 ptsA bond indenture isa requirement that states the bond in question must be paid off in quarterly installments.a contract between the corporate board of directors and the bondholders, stating that the board is indentured (i.e., bound) to the bondholders in case of default by the corporation.a promise to bondholders to substitute preferred stock amount for the bond amount in case of corporate default.a contract between the bondholders and the corporation issuing the bonds.Flag this QuestionQuestion 174 ptsIf a bond is issued at a contract percentage (coupon rate) that is identical to the market rate of interest, the bond will sell atface amount – that is, the contractual amount of the bond issue.a discount.a premium.A bond will not sell on the bond market with a coupon rate that is less than the market rate.Flag this QuestionQuestion 184 ptsRawl Company issues a 10-year, $4,000,000 bond on 01/01/2019 with a premium of $100,000. The coupon rate of the bond is 10%, and interest is to be paid to the bondholders semiannually on 06/30 and 12/31. The journal entry that Rawl should make on 12/31/2019 with regard to this bond isDebit cash $4,100,000, credit premium on bonds payable $100,000, credit bonds payable $4,000,000.Debit cash $5,000, debit interest expense $195,000, credit bonds payable $200,000.Debit premium on bonds payable $5,000, debit interest expense $195,000, credit bonds payable $200,000.Debit premium on bonds payable $5,000, debit interest expense $195,000, credit cash $200,000.Flag this QuestionQuestion 194 ptsWhen a note is secured by an asset of the corporation, it is called a(n)mortgage.asset note.callable note.serial bond.Flag this QuestionQuestion 204 ptsRoughRider Corporation owns $60,000 of the common stock of Pistola, Inc. This investment has been properly classified by RoughRider as a trading security. The $60,000 ownership of Pistola stockshould be classified as a current asset, and any unrealized gain/loss on the Pistola stock investment should be reported in the stockholders’ equity section of RoughRider’s balance sheet.should be classified as a current asset, and any unrealized gain/loss on the Pistola stock investment should be reported on RoughRider’s income statement for the period.should be classified as a current asset, and any unrealized gain/loss on the Pistola stock investment should be reported on Pistola’s income statement for the period.should be reported as a non-current asset on RoughRider’s balance sheet.Flag this QuestionQuestion 214 ptsThree different classifications of investments are possible on a company’s balance sheet: (1) trading securities, (2) available-for-sale securities, and (3) held-to-maturity securities. Absent any special recognition agreement by the company, which of these investments should be reported at fair value at period end?Held-to-maturity securities and available-for-sale securitiesTrading securities only.Trading securities and available-for-sale securitiesAll three classifications are to be reported at fair value.Flag this QuestionQuestion 224 ptsComprehensive income is a concept that includes which of the following?Dividends paid to stockholders, net income, paid-in capital in excess of par on a stock purchseInfusion of capital from preferred stockholders, interest revenue, unrealized gain/loss on available-for-sale securitiesUnrealized gain/loss on trading securities, dividends paid to stockholders, interest expenseNet income, revenue from sales, unrealized gain/loss on available-for-sale investmentsFlag this QuestionQuestion 234 ptsOn 03/01/2019 ABC Company purchased 30% of the stock of XYZ Corporation for $6,000,000. How will ABC treat a 2019 cash dividend paid by XYZ to its shareholders?ABC will record the dividend using the equity method. The dividend will therefore be reported as a reduction in the amount of the investment in XYZ.ABC will record the dividend using the equity method. The dividend will therefore be reported as an increase in the amount of the investment in XYZ.ABC will record the dividend using the equity method. The dividend will therefore be reported as dividend revenue.ABC will record the dividend using the equity method. The dividend will therefore be reported as an increase in current assets.Flag this QuestionQuestion 244 ptsOn 01/01/2018, Hanny Company acquired 60,000 shares of the 400,000 outstanding shares of Edwards Company common stock for $240,000. The investment was properly classified as an available-for-sale investment by Hanny. During 2018, Edwards declared a total of $100,000 cash dividends to its common shareholders. Edwards earned $200,000 in net income for the year ended 12/31/2018. The year-end valuation of Edwards Company on the stock market was $4.50 per share. What is the total valuation of the investment on Hanny’s balance sheet at 12/31/2018?$240,000$255,000$270,000$340,000Flag this QuestionQuestion 254 ptsOn 01/15/2019, Jurrie Enterprises, a manufacturing corporation, purchases 10,000 shares of its own common stock from a dissident shareholder, paying $150,000, and records the transaction as treasury stock. Jurrie makes the following journal entry on 01/15/2019: Debit treasury stock $150,000, credit cash $150,000. On 04/25/2019, Jurrie sells 3,000 shares of this stock to a new shareholder and receives $84,000. Jurrie should make the following journal entry:Debit cash $84,000, credit treasury stock $84,000Debit cash $45,000, debit treasury stock $39,000, credit retained earnings $84,000Debit cash $84,000, credit treasury stock $45,000, credit paid-in capital from treasury stock $39,000Debit treasury stock $84,000, credit paid-in capital from treasury stock $39,000, credit cash $45,000

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"