2006-Sum-test_2(solution)

2006-Sum-test_2(solution) - MGT120 Test #2 June 15, 2006...

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MGT120 Test #2 – June 15, 2006 Solutions Part A ( 10 marks) 1. c 2. d 3. b 4. b 5. b 6. b 7. d 8. a 9. b 10. a Part B (15 marks) January 15 Dividends (80,000 x $0.60) 48,000 Dividends Payable 48,000 February 15 Dividends Payable 48,000 Cash 48,000 April 15 No entry May 15 Retained earnings (80,000 x 10% x $20) 160,000 Common Shares 160,000 September 30 Retained earnings 2,046 Common shares (300 * $13.18) 3,954 Cash (300 * $20) 6,000 December 1 Dividends ((80,000-300+8000)x $0.75 65,775 Dividends Payable 65,775 * 13.18 = 8,000 + 80,000 ) 160,000 + (1,000,000
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Shareholders’ equity: Common shares ($1,000,000 + $160,000 - $3,954). ........................................................ 1,156,046 Retained earnings ($540,000 + $37,000 – $48,000 -160,000– $2,046 – 65,775). .............. 301,179 Total shareholders’ equity. .............................................................. $1,457,225 Part C (5 marks) 2003 2004 Net income $31,343 $35,910 1998Ending inventory (6,000) 6,000 1999 Ending inventory
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2006-Sum-test_2(solution) - MGT120 Test #2 June 15, 2006...

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