Mgmt_200_Fall_2006_Final_Exam_Solution(4,17)

Mgmt_200_Fall_2006_Final_Exam_Solution(4,17) - Name: _...

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Name: ________________________ PUID: ________________________ Purdue University Krannert School of Management MGMT 200 – Introductory Financial Accounting Fall 2006 Final Exam – December 12, 2006 - SOLUTION This exam consists of 4 questions on 11 pages (excluding this cover page) for a total of 100 points. Time allowed: 90 minutes. Answer all questions. To ensure full credit and to maximize partial credit, clearly show all supporting calculations. The exam is closed book. A calculator is permitted. GOOD LUCK . Question 1 (25 points) ________ Question 2 (25 points) ________ Question 3 (25 points) ________ Question 4 (25 points) ________ TOTAL (100 points) ________
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Question 1. Stockholders’ Equity (25 points) Part A. The Stockholders’ Equity section of Yellowcake Corporation’s balance sheet as at December 31, 2005 is as follows: Stockholders’ Equity: Common stock, $1 par, 4,000,000 shares authorized, 1,200,000 shares issued 1,200,000 Additional paid-in capital 24,600,000 Retained earnings 57,800,000 Less treasury shares, at cost (220,000 shares) (7,700,000) TOTAL STOCKHOLDERS’ EQUITY: $75,900,000 Required: a. On February 2, 2006 the company’s Chief Executive Officer (CEO) was sold 50,000 shares at a price of $25 per share. These shares were reissued from treasury. Prepare the journal entry to record this transaction. Cash 1,250,000 Additional paid-in capital 500,000 Treasury shares, at cost 1,750,000 b. On June 15, 2006 82,000 shares were sold from treasury (reissued) in the open market for $60 per share. Prepare the journal entry to record this transaction. Cash 4,920,000 Additional paid-in capital 2,050,000 Treasury shares, at cost 2,870,000 Question 1 continued over . . . Mgmt 200 – Final Exam Solution – Fall 2006 – page 1
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c. On August 27, 2006 Yellowcake Corporation repurchased 44,000 of its shares at a price of $70 per share. Prepare the journal entry to record this transaction. Treasury shares, at cost 3,080,000 Cash 3,080,000 d. On October 11, 2006 Yellowcake Corporation declared a dividend of $0.25 per share, payable on November 17, 2006 to shareholders of record on November 6, 2006. Prepare all the journal entries associated with this transaction. Shares outstanding = issued – treasury = 1,200,000 – 132,000 = 1,068,000 Dividend amount = 1,068,000 x 0.25 = $267,000 Retained earnings 267,000 Dividends payable 267,000 Dividends payable 267,000 Cash 267,000 Question 1 continued over . . . Mgmt 200 – Final Exam Solution – Fall 2006 – page 2
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This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.

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Mgmt_200_Fall_2006_Final_Exam_Solution(4,17) - Name: _...

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