405quizonesummer2011solution

405quizonesummer2011solution - d) None of the above...

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Name_______________________ Quiz one ACCT 405 __________1. You have the following capital structure: 10,000 shares of 5% $100 par participating preferred stock 100,000 shares of $30 par common stock You have $300,000 available for dividends. They should be allocated as: a) $ 50,000 for the preferred, $250,000 for the common b) $ 75,000 for the preferred, $225,000 for the common c) $112,500 for the preferred, $187,500 for the common d) None of the above PS 10,000 x $100 = 1,000,000 x .05 = 50,000 CS 100,000 x $30 = 3,000,000 x .05 = 150,000 4,000,000 200 000 300,000 available -200,000 allocated 100,000 PS 100,000 x ¼ = 25,000 CS 100,000 x ¾ = 75,000 100,000 PS CS 50,000 150,000 25,000 75,000 75,000 225,000 __________2. Prepare the entry to convert this bond to common stock: 10,000 bonds with a face value of $1,000 each that have a book value of $9,990,000. You should: a) Debit Discount on Bonds Payable for $10,000 b) Credit Discount on Bonds Payable for $10,000 c) Credit Bonds Payable for $10,000,000
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Unformatted text preview: d) None of the above __________3. You purchased land by giving the seller 40,000 shares of your $10 par common stock. The stock is currently traded at $50 per share. The land has a fair value of $ 1,500,000 . The land should be valued on your books at: a) $1,500,000 Conservatism b) $2,000,000 c) $ 400,000 d) None of the above _____________ 4. You have 1,000,000 shares of common stock authorized, 600,000 shares issued, and 500,000 shares outstanding . If you give a . 10 per share dividend , you would give: a) $100,000 b) $ 50,000 c) $ 60,000 d) None of the above ______________5. You declared a 30% stock dividend. You have 100,000 shares of $10 par common stock issued and outstanding. The current market value of the stock is $30/share. At the date of declaration, you should debit Retained Earnings for: a) $300,000 Large stock dividend . Use par. b) $900,000 c) $100,000 d) None of the above...
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This note was uploaded on 11/05/2011 for the course ACCT 405 taught by Professor Caylor during the Summer '11 term at South Carolina.

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405quizonesummer2011solution - d) None of the above...

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