ACC301-Take-Home-2

ACC301-Take-Home-2 - ACC 301 Take Home Exam#2(9...

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ACC 301 Take Home Exam #2 (9 problems/questions) Please use EXCEL and/or WORD to complete this exam. Be sure to show your calculations so that you can receive partial credit. Print up two copies of your solutions to this exam and bring both copies to class next week. NOTE: You may consult with your classmates about any of the questions/problems on this exam. However, this is an exam and copying someone else’s work is not honest. Problem 1. The changes in the account balances and the following additional information are taken from the accounts of the Rainbow Co. Increase (Decrease) Cash . ................................................ $142,500 Accounts Receivable . ................................. (30,000) Inventory . ........................................... 202,500 Buildings and Equipment (net) . ....................... 630,000 Accounts Payable . .................................... (172,500) Bonds Payable . ....................................... 375,000 Capital Stock . ....................................... 300,000 Additional Paid-In Capital . .......................... 45,000 Dividends for 2004 were $82,500. There were no transactions in 2004 affecting retained earnings other than the dividends and net income. Calculate the 2004 net income. 2. The following pretax amounts pertain to the Brooke Corp. for the year ended December 31, 2004. Sales . ................................................ $ 400,000 Operating expenses . ................................... 84,000 Extraordinary gain . ................................... 30,000 Interest expense . ..................................... 4,000 Cost of goods sold . ................................... 280,000 Gain on sale of equipment . ............................ 10,000 Prior period adjustment . .............................. (16,000) Gain on disposal of business segment . ................. 40,000 Cumulative effect of change in accounting principle . .. (24,000) Retained earnings, January 1, 2004 . ................... 1,600,000 Dividends declared . ................................... 12,000 The effective corporate tax rate is 30 percent. The company had 10,000 shares of common stock outstanding for the entire year. (1)
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ACC301-Take-Home-2 - ACC 301 Take Home Exam#2(9...

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