W09_136A_MT1

W09_136A_MT1 - 26. The following is from the balance sheet...

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26. Common Stock, $10 par value 1,000,000 APIC 9,000,000 Retained earnings 2,750,000 Accumulated comprehensive income, net of $25,000 deferred tax 75,000 Total Stockholders' equity 12,825,000 Net income 1,000,000 Dividends declared and paid 700,000 Unrealized gain from available for sale securities 10,000 Change in accounting estimate 200,000 * Correction of an error; prior year income was overstated by 50,000 Unrealized loss form trading securities (40,000) * Effective income tax rate 25% Sold 1,000 shares for 100,000 I. * II. SHOW THE EQUITY SECTION OF THE BALANCE SHEET AS OF 12/31/06 The following is from the balance sheet of TRULY, Inc. as of December 31, 2005: DURING THE YEAR ENDED DECEMBER 31, 2006, THE FOLLOWING ACTIVITY TOOK PLACE: BASED ON THE ABOVE INFORMATION, PREPARE THE STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2006 NOTE: The unrealized loss from trading securities and the change in accounting estimate were both already subject to the tax provision and included in the net income noted above.
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27. The following summarizes the terms of a bond and other information necessary to answer the question which follows. Face value of bond 10,000,000 Stated rate 8% 3 periods 0.7938 3 periods 0.7118 Term in years 3 PV of a lump sum at 1% rate 36 periods 0.7872 36 periods 0.6989 Market rate 12% Compounding period Annual, normal Monthly interest payment 800,000 3 periods 2.5771 3 periods 2.4018 36 periods 31.9099 36 periods 30.1075 i. Compute the value which these bonds would sell at on the market on date of issuance based on the above conditions. ii. Present the journal entry required by the company issuing the bonds on the date of issuance. iii. Present the journal entry required by the company issuing the bonds at the end of the first year. iv. Present the journal entry required by the company issuing the bonds at the end of the second year. v. What will the balance of any premium or discount be at the end of 3 years for these bonds? PV of a lump sum at 8% rate PV of ord. annuity at 8% rate PV of ord. annuity at .667% rate PV of a lump sum at 12% rate PV of ord. annuity at 12% rate PV of ord. annuity at 1% rate PV of a lump sum at .667% rate 28. a) Extraordinary loss due to a hurrinado-quake-fire natural disaster which cost the company $100,000 in cash. b) c) d) e) Sell $200,000 of goods to customers on credit. Record the appropriate journal entry for each item of activity listed below please. Assume that the effective tax rate is 25% in all instances (when to include that in your JE is for you to determine!) and that all amounts presented exclude any tax effect. Cumulative effect of changing from straight line to a more accelerated depreciation would have resulted in $20,000 more depreciation in all prior years combined. Recording an additional amount of depreciation expense due to a change in estimate this year.
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W09_136A_MT1 - 26. The following is from the balance sheet...

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