Review Problem Final Exam_1 - Copy

# Review Problem Final Exam_1 - Copy - • Estimated that 2...

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Review Problem For Final Exam Calvin Co. had the following transactions in 2012: January 1 Beg Inv 10,000 units \$ 5.00/unit February 5 Purchase 5,000 units \$ 5.50/unit May 26 Purchase 5,000 units \$ 6.00/unit November 10 Sold 10,000 units \$15.75/unit Calvin Co. uses the FIFO method to account for inventory. All purchases and sales were made on account. On January 1, 2012 Calvin had a balance in Accounts Receivable of \$10,000 and a balance in Allowance for Doubtful Accounts of \$1,200. Issued a \$120,000, one year, 10% note on 4/1/12. Wrote off customers' accounts amounting to \$1,000. Issued a \$10,000, 10% five-year bond on January 1, 2012 for \$8,900. The market rate of interest was 12%. The bond pays interest annually on December 31 and the company uses the effective interest method for amortization. Purchased a car on July 1, 2012 for the CEO for \$100,000. It is estimated the car will be driven 100,000 miles over its useful life. Received \$148,600 from customers for sales made on account.

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Unformatted text preview: • Estimated that 2% of ending A/R will be uncollectible. Calvin Co. uses the allowance method to account for bad debts. • Paid \$10,000 in dividends to all stockholders. As of January 1, 2012, Calvin Co. had 5000 shares of \$10 par, 7%, cumulative preferred stock outstanding and 1000 shares of \$12 par common stock outstanding. All stock was issued at par value and no dividends were paid during 2011. • The car was driven 20,000 miles in 2012. REQUIRED 1. What is ending inventory on the December 31, 2012 Balance Sheet? 2. What is the amount of Bad Debt Expense? 3. What is the carrying value of the bonds on the December 31, 2012 Balance Sheet? 4. What is the book value of the car on the December 31¸2012 Balance Sheet? 5. How much of the dividends were paid to preferred stockholders? What amount was paid to common stockholders? 6. What is net income in 2012?...
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Review Problem Final Exam_1 - Copy - • Estimated that 2...

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