Take-home Test_W10

Take-home Test_W10 - Dr Seyedin Financial Accounting II...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Dr. Seyedin Financial Accounting II Take-home Exam (Chaps. 14, 15, and 16) Please mark your answers directly on the exam. You must show your work step-by-step as it relates to each problem- solving question. Use additional paper if needed. Points will not be awarded if the handwriting is not legible. Student Name--------------------- 1. On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable semiannu- ally, were sold for $1,225,000. Present entries to record the following transactions for the current fiscal year: (a) Issuance of the bonds. (b) First semiannual interest payment. (c) Amortization of bond discount for the year, using the straight-line method of amortization. 2. Present entries to record the selected transactions described below: (a) Issued $3,250,000 of 10-year, 8% bonds at 97. (b) Amortized bond discount for a full year, using the straight-line method. (c) Called bonds at 98. The bonds were carried at $3,175,500 at the time of the redemption. 3. A company issued $2,000,000 of 30-year, 8% callable bonds on April 1, 2008, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year. Journalize the entries to record the fol- lowing selected transactions: 2008 Apr. 1 Issued the bonds for cash at their face amount. Oct. 1 Paid the interest on the bonds. 2010 Oct. 1 Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.) 4. (a) Prepare the journal entry to issue $100,000 bonds which sold for $94,000. (b) Prepare the journal entry to issue $100,000 bonds which sold for $104,000. 5. Indicate the section where each of the following items would be reported on the corporation balance sheet: Use the following abbreviations to report the relevant balance sheet section: CA = Current Assets I = Investments PPE = Property, Plant, and Equipment IA = Intangible Assets CL = Current Liabilities LTL = Long-Term Liabilities PIC = Paid-In Capital
Background image of page 1

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

View Full DocumentRight Arrow Icon
RE = Retained Earnings (a) Marketable securities (b) Bond sinking fund (c) Excess of issue price over par of common stock (d) Unamortized bond discount (on bonds due in 2010) 6. Balance sheet and income statement data indicate the following: Company A Company B Bonds payable, 8% (issued 1985, due 2009) $1,200,000 $ 900,000 Preferred 5% stock, $100 par (no change during year) 300,000 400,000 Common stock, $50 par (no change during year) 1,000,000 1,000,000 Income before income tax for year 495,000 130,000 Income tax for year 75,000 12,000 Common dividends paid 50,000 0 Preferred dividends paid 21,000 28,000 (a) For each company, what is the number of times bond interest charges were earned (round to one decimal place)? (b)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/13/2010 for the course ACTG 1B a taught by Professor 2 during the Spring '10 term at Foothill College.

Page1 / 12

Take-home Test_W10 - Dr Seyedin Financial Accounting II...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online