EXAM2 - AC404 SPRING 2011 EXAM 2 COMPLETE ALL PROBLEMS...

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AC404 SPRING 2011 EXAM 2 – COMPLETE ALL PROBLEMS PROBLEM 1 —Investment in debt securities at premium. On April 1, 2010, West Co. purchased $160,000 of 6% bonds for $166,300 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2015. Instructions (a) Prepare the journal entry on April 1, 2010. (b) The bonds are sold on November 1, 2011 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method (by months and round to the nearest dollar). Prepare all entries required to properly record the sale. PROBLEM 2 —Trading equity securities. Korman Company has the following securities in its portfolio of trading equity securities on December 31, 2010: Cost Fair Value 5,000 shares of Thomas Corp., Common $155,000 $139,000 10,000 shares of Gant, Common 182,000 190,000 $337,000 $329,000 All of the securities had been purchased in 2010. In 2011, Korman completed the following securities transactions: March 1 Sold 5,000 shares of Thomas Corp., Common @ $31 less fees of $1,500. April 1 Bought 600 shares of Werth Stores, Common @ $45 plus fees of $550. The Korman Company portfolio of trading equity securities appeared as follows on December 31, 2011: Cost Fair Value 10,000 shares of Gant, Common $182,000 $195,500 600 shares of Werth Stores, Common 27,550 25,500 $209,550 $221,000 Instructions Prepare the general journal entries for Korman Company for: (a) the 2010 adjusting entry. (b) the sale of the Thomas Corp. stock. (c) the purchase of the Werth Stores' stock. (d) the 2011 adjusting entry. PROBLEM 3 —Percentage-of-completion and completed-contract methods.
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On February 1, 2010, Marsh Contractors agreed to construct a building at a contract price of $6,000,000. Marsh estimated total construction costs would be $4,000,000 and the project would be finished in 2012. Information relating to the costs and billings for this contract is as
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This note was uploaded on 03/14/2011 for the course AC 403 taught by Professor Brown during the Spring '11 term at Clarkson University .

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EXAM2 - AC404 SPRING 2011 EXAM 2 COMPLETE ALL PROBLEMS...

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