F.A - MISCH FALL 2009 FINANCIAL ACCOUNTING FINAL EXAM...

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MISCH NAME_____________________________ FALL 2009 FINANCIAL ACCOUNTING FINAL EXAM PROBLEM POSSIBLE POINTS ACTUAL POINTS 1. Bonds Payable 22 2. Treasury Stock 09 3. Dividends 08 4. Time Value of Money 06 5. Basic and Adjusting Journal Entries and Financial Statements 64 6. Multiple Choice 09 7. Quibble Point 02 ---------- Total 120 NOTE: A. If you are asked for an entry or an amount when none is required, write “no entry” or “zero” in the space provided. B. Round all answers to the nearest dollar. C. Partial credit will be given only when supporting computations are shown in good form. D. Calculators with stored-text capabilities and cell phones are prohibited on this examination. Use of such items and/or possession of any unauthorized materials will result in your receiving a zero on the examination. E. Good Luck! Have a wonderful Christmas holiday! 1
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PART I—BONDS PAYABLE (22 POINTS) On January 2, 2008, Washington Corporation issued $300,000 of 7-year, 6.3% bonds for $282,461. On the date of issuance, the market interest rate for bonds on similar risk was 7.4%. The bonds pay interest annually each December 31 st . Ionic has a calendar year-end and uses the effective interest method of amortization. Required: A. Prepare the journal entry required on Washington’s books on January 2, 2008 to record the issuance of the bonds. (4 Points) DATE ACCOUNT DEBIT CREDIT B. Prepare a bond amortization table through December 31, 2011. (4 Points) C. Prepare, in good form, the balance sheet presentation related to the bonds that would appear on Washington’s books at December 31, 2009. (Ignore cash.) (3.5 points) 2
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PART I CONTINUED (BONDS PAYABLE) D. Prepare, in good form, the income statement presentation related to the bonds that would appear on Washington’s books for 2009 . (1.5 Points) E. Prepare any journal entry/entries required on Washington’s books at December 31, 2010. (4 Points) DATE ACCOUNT DEBIT CREDIT F. Assume that on January 2, 2011 , Washington redeemed the bonds at 98. Prepare the journal entry required on the company’s books to record the redemption. (5 Points) DATE ACCOUNT DEBIT CREDIT 3
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PART II—TREASURY STOCK (9 POINTS) Jefferson Corporation had the following normal balances in its stockholders’ equity accounts at January 1, 2009: Common Stock, $2 par value $ 540,000 Additional Paid-in Capital—Common Stock $2,460,000 Retained Earnings $5,000,000 The company accounts for treasury stock on the cost basis and had the following transactions during 2009: Feb. 25 Repurchased 3,000 shares of common stock at $25.00 per share. Apr. 16 Resold 1,000 of the treasury shares at $23.75 per share. Sept. 10
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This note was uploaded on 04/25/2011 for the course ACCT 224 taught by Professor None during the Spring '09 term at City College of San Francisco.

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F.A - MISCH FALL 2009 FINANCIAL ACCOUNTING FINAL EXAM...

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