Acct Final Review

Acct Final Review - 1 A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share recording it at cost What will be the

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Unformatted text preview: 1. A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders equity? a. Increase by $200,000 b. Increase by $500,000 c. Decrease by $200,000 d. Decrease by $500,000 e. No effect on total stockholders equity 2. The board of directors of Essex Company declared a cash dividend on November 15, 2006, to be paid on December 15, 2006, to stockholders owning the stock on November 30, 2006. Given these facts, the date of November 30, 2006, is referred to as the a. Declaration date b. Record date c. Payment date d. Ex-dividend date 3. Allstate, Inc. has 10,000 shares of 8%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2006. Preferred dividends in arrears are $10,000. If the board of directors declare a $90,000 dividend, the a. Common shareholders will receive the entire $90,000. b. Preferred shareholders will receive the entire $90,000. c. Preferred shareholders will receive $80,000 and the common shareholders will receive $10,000. d. Preferred shareholders will receive $45,000 and the common shareholders will receive $45,000. e. Preferred shareholders will receive $8,181.82 and the common shareholders will receive $81,818.18. 4. Which of the following would not affect the balance of the Retained Earnings account? a. Net income b. Stock dividend c. Stock split d. Gains and losses of a company 5. Stockholders of a corporation directly elect: a. The president of the corporation b. The board of directors c. The treasurer of the corporation d. All the employees of the corporation 6. Allen Company acquires 50 Community 10%, 5 year, $1,000 bonds on January 1, 2007 for $51,250. This includes a brokerage commission of $1,250. If Pima sells all of its Community Bonds for $52,000 and pays $1,000 in brokerage commissions, what gain or loss is recognized? a. Gain of $1,000 b. Loss of $250 c. Gain of $250 d. Gain of $500 7. At the time of acquisition of a debt investment a. no journal entry is required. b. the cost principle applies. c. the Stock Investments account is debited when bonds are purchased. d. the investment account is credited for its cost plus brokerage fees. 8. Wilson Co. purchased 30, 6% D&D Company bonds for $30,000 cash plus brokerage fees of $300. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a a. debit to Interest Receivable for $900. b. debit to Interest Revenue for $900. c. credit to Interest Revenue for $909. d. debit to Debt Investments for $900. 9. Lucial Ball Corporation makes an investment in 100 shares of Ricky Company's common stock. The stock is purchased for $50 a share plus brokerage fees of $200. The entry for the purchase is: a. Debt Investments .................................................................. 5,200 Cash ..............................................................................Cash ....
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This note was uploaded on 03/27/2008 for the course AIS 100 taught by Professor Ta during the Spring '08 term at Wisconsin.

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Acct Final Review - 1 A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share recording it at cost What will be the

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