Spring_2011_Acct 510_Exam 3

Spring_2011_Acct 510_Exam 3 - Acct 510_Spring2011: Exam 3...

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Unformatted text preview: Acct 510_Spring2011: Exam 3 Name: _______________________ Question 1: (12 points) On January 1, 2009, Hooper Corporation issued 3-year bonds with a $80,000 face amount and a 6% annual coupon rate paid annually on December 31. When the bonds were issued, the implied market rate of interest was 10%. Make all necessary journal entries. Indicate whether each account is an asset (A), liability (L), or equity (E). **Rounded to two decimal places. Question 2: (12 points) A comparative balance sheet for Orozco Corporation is presented below. December 31 2010 $ 63,000 82,000 180,000 71,000 270,000 pment (69,000) $597,000 ity $ 34,000 150,000 214,000 199,000 $597,000 Additional information: 1. Net income for 2010 was $105,000. 2. Cash dividends of $40,000 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. 4. The depreciation expense is $27,000. 5. All changes in fixed assets are assumed to be cash sales or cash purchase. There is no gain or loss on the sale. Prepare a statement of cash flow using the indirect method. Question 3: (12 points) Lansbury Inc. had the balance sheet shown on the following page at December 31, 2009. LANSBURY INC. BALANCE SHEET DECEMBER 31, 2009 $ 20,000 Accounts payable 21,200 Long-term notes payable 32,000 Common stock 81,000 Retained earnings 40,000 $194,200 During 2010 the following occurred. 1. Lansbury Inc. so gain of $3,400 fo 2. A tract of land w 3. Long-term notes $16,000 cash. 4. An additional $2 5. Dividends totalli 6. Net income for 2 7. Land was purcha 8. At December 31, Payable remaine Prepare a statement of cash flows for 2010 using the indirect method Question 4: (14 points) a) Issuance of capital stock. b) Amortization of patent. c) Issuance of bonds for land. d) Purchase of land. e) Receipt of dividends on investment in stock. f) Loss on sale of land. g) Retirement of bonds. h) Payment of interest on notes payable. i) Exchange of land for patent. j) Sale of building at book value. k) Payment of dividends. l) Depreciation. m) Conversion of bonds into common stock. n) Receipt of interest on notes receivable. Instructions: Indicate how each item should be classified in the statement of cash flows using these four major classifications: operating activity (indirect method) (O), investing activity (I), financing activity (F) , and significant noncash investing and financing activity (NC)....
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This note was uploaded on 07/08/2011 for the course ACCOUNTING 510 taught by Professor Chavis during the Spring '09 term at CSU Fullerton.

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Spring_2011_Acct 510_Exam 3 - Acct 510_Spring2011: Exam 3...

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