{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

3bm1w09v3 - Answer Key ”WM/M(5‘3>~C7 False...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Answer Key ”WM/M (5‘3 >~C7 . False . True >0?°.\’O‘U‘:‘>E”NT‘ >"%U E m 10. True 1 1. False 12 D 13 True 14 True 15 False 16 False R 17 D 18 A 4 Version 3 Problem 1 v1 a. On May 10 McLain Corporation issues 3,480 shares of $5 par value common stock for cash at $14 per share. Joumalize the issuance of the stock. (For mulfiple (lebiflcredit entries, list accounts in order of magnitude.) ABE] 1-2 b. On June 1 Harmon 1ch issues 2,300 shares of no—par common stock at a cash price of $8 per share. Journalize the issuance of the shares. ABE11—3 c. Duggen Inc. issues 4,750 shares of $89 par value preferred stock for cash at $1 13 per share Journalize the issuance of the shares. (For multiple debit/credit entries, list accounts in order of magnitude.) ABE11—4 6 Version 3 w Problem v1 The stockholders’ equity section of KC Corporation's balance sheet at December 3] is presented here. KC CORPORATION Balance Sheet (partial) Stockholder’s equity Paid~in capital Preferred stock, cumulative, l0,000 shares authorized, 6,000 shares issued and outstanding $600,000 Common stock, no par, 750,000 shares authorized, 600,000 shares issued 2,100,000 Total paid~in capital 2,700,000 Retained earnings 1,158,000 Total paid~in capital and retained earnings 3,858,000 Less: Treasury stock (8,000 common shares) (32,000) Total stockholders equity $3,826,000 From a review of the stockholders' equity section, answer the following questions. (Round all answers to 0 decimal places.) 9.9-9.6.” EXERCISE 11-4 Solution “V (a) How many shares of common stock are outstanding? Assuming there is a stated value, what is the stated value of the common stock? What is the par value of the preferred stock? lfthe annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock? If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings? , 7‘s , Common stock outstanding is 592,000 shares. (Issued shares 600,000 less treasury shares 8,000.) The stated value of the common stock is $3.50 per share. (Common stock issued $2,100,000 + 600,000 shares.) ¥Lhw The par value of the preferred stock is $100 per share. (Preferred stock $600,000 ~1- 6,000 shares.) The dividend rate is 6% ($36,000 ~I- $600,000). The Retained Earnings balance is still $1,158,000. Cumulative dividends in arrears are only disclosed in the notes to the financial statements. 7 Version 3 $77 Problem v1 On January 1, 2007, KC Corporation had these stockholders’ equity accounts Common Stock ($10 par value, 59,800 shares issued and outstanding) $598,000 Paid-in Capital in Excess of Par Value 491,900 Retained Earnings 618,000 During the year, the following transactions occurred. Jan. 15 Declared a $0.52 cash dividend per share to stockholders of record on January 3 l, payable February 15. Feb. 15 Paid the dividend declared in January. Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15 the market price of the stock was $12 per share. May 15 Issued the shares for the stock dividend. Dec. 1 Declared a $0.69 per share dividend to stockholders of record on December 15, payable January 10, 2008. Prepare the journal entry for each of the transactions above. Be sure and date each journal entry. (Round all answers to 0 decimal places.) Answer: APl 1—8A v1 Retained 6519198§J§53399§$9521,, . , , _, ,9 yeah--- Dividendspayable ,_ _, _ , , Cash , Reaeédfemiégs,(5998.9$423512 , , §§§§§ - ,, , ,, .Cammaastosk dividendsdistributable,_<<5~980,>< $10,) , Paidmcapitali<5~989x$2.>, ., - _ mmtkddddi'ls’ifibutéble «saésoxsiox,[f , " " _.,_,-'Y%d¢n91§payable __ 8 Version 3 Ex. 187 % Ll Problem v1 KC Company uses the periodic inventory method and had the following inventory information available: Units Unit Cost Total Cost 1/1 Beginning Inventory 100 $4 $ 400 1/20 Purchase 500 $5 2,500 7/25 Purchase 100 $7 700 10/20 Purchase 300 $8 2,400 LQQQ m A physical count of inventory on December 31 revealed that there were 325 units on hand. Instructions Answer the following independent questions and show computations supporting your answers. 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is? 2 Assume that the company uses the average cost method. The value of the ending inventory on December 31 is? 3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is? 4 Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less? Solution 187 (20 min.) 1. FIFO: Ending inventory $2,575 / 300 units @$8 = $2,400 15/ 25 units @s7 = 175 2?,» 2. Average Cost: Ending inventory $1,950 29/ $6,000 —:- 1,000 = $6.00 per unit x 325 units = $1.250 3 3. LIFO: Ending Inventory $1,525 100 units @$4 — $ 400 W = "Lg t 4. FIFO: Cost of goods sold $3,425 100 units @$4 = $ 400 500 units @$5 = 2,500 r” 75 units @$7 = 525 g mulls $3,525 WWWMWWMWW ‘ LIFO: Cost of goods sold $4,475 300 units @$8 $2,400 100 units @37 700 275 units @$5 1 375 515mm M Income would have been $1,050; ($4,475 vs. $3,425) greater if the company used FIFO instead of LIFO. 9 Version 3 Problem 5 The following information was available from the inventory records of KC Company for January: Units Unit Cost Total Cost Balance at January 1 3,000 $9.77 $29,310 Purchases: January 6 2,000 10.30 20,600 January 26 2,700 10.71 28,917 Sales: January 7 (2,500) January 31 12,000) Balance at January 31 3 200 Calculate ending inventory and cost of goods sold assuming KC uses the perpetual inventory system applying the LIFO cost flow assumption. FIFO: Transactions: inventory Balance: Date Units La er1 La er 2 Total Jan. 1 3,000 3,000 Jan. 6 2,000 2,000 , Jan. 7 (2,500) (500) (2,000) fiétm‘fi“ ‘7 Jan. 26 2,700 2,700 Jan. 31 (4,000) (2,000) 2,500 — 700 A — ’ 3,200 Cost 9.77 ifi 10.30 10.71 “of ‘ ' ”7‘“? 1,200 24,425.00 - 7,497.00 - 31,922.00 Calculation of Cost of Goods Sold: Dollars “*Units Beg. inventory 29,310.00 3,000 Purchases 49,517.00 4,700 Goods available z: 78,827.00 7,700 Ending inventory {7 (3,1,,,9»2”»*2T56j0m“‘ (1 ,200 COGS 10 Version 3 ...
View Full Document

{[ snackBarMessage ]}