2213 Supplemental Homework Summer 2010

2213 Supplemental Homework Summer 2010 - 1 Supplemental...

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Supplemental Homework #1 The partnership of King, Queen and Page has experienced operating losses for three consecutive years. The partners, who shares profits and losses in the ratios of King of 15%; Queen of 60%; and Page of 25%, are liquidating the business. The following is the condensed balance at December 31, 2009. Cash $ 7,000 Accounts Payable $63,000 Noncash Assets 163,000 King, Capital 24,000 Queen, Capital 66,000 Page, Capital 17,000 Total Assets 170,000 Total Liabilities and Capital 170,000 Requirements: Prepare a liquidation schedule assuming the noncash assets are sold for $103,000. 1
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Supplemental Homework #2 Vogue Skincare has 5,000 outstanding shares of 5%, $20 par preferred stock and 100,000 shares of $1.50 par common stock outstanding. During a three year period, Vogue declared and paid cash dividends as follows: 2008 of $4,000; 2009 of $10,000; and 2010 of $20,000. Required: 1. Compute the total dividends to preferred and common for each of the three years if the preferred stock is: a. Cumulative b. Non cumulative 2. For case 1a, journalize the declaration of the 2010 dividend on December 22, 2010, and payment on January 14, 2011. 2
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Supplemental Homework #3 Environmental Concerns Limited (ECL) issued $500,000 of 10 year, 6.5% bonds payable at par value on May 1, 2009. The bonds pay interest each April 30 and October 31, and the company ends its accounting year on December 31. Requirements: 1. Fill in the blanks: a. ECL’s bonds are priced at _____________. b. When ECL’s issued its bonds, the market interest rate was _____________. 2. Journalize for ECL: a. Issuance of the bonds on May 1, 2009. b. Payment of interest on October 31, 2009. c. Accrual of interest at December 31, 2009. d. Payment of interest on April 30, 2010. 3
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Supplemental Homework #4 Educators Credit Union (ECU) issued $300,000 of 20 year, 6% bonds payable on March 1, 2009. The bonds pay interest each February 28 and August 31, and the company ends its accounting year on December 31. Requirements: 3. Fill in the blanks: c. If the market rate of interest is 5% when ECU issued its bonds, will the bonds be priced at par, at a premium, or at a discount? ____________ d. If the market interest rate is 7% when ECU issued its bonds, will the bonds be priced at par, at a premium, or at a discount? ______________ 4.
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2213 Supplemental Homework Summer 2010 - 1 Supplemental...

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