FINAL Exam - Please remember these are just some selected...

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Please remember these are just some selected practice questions. This is NOT a study guide. You need to understand all the OWL problems, text problems and class examples to be prepared for the exam. Part 1 Indicate how each transaction affects total assets and total stockholders equity, according to the following choices. Total liabilities may also be affected-- it just isn't reported here. The transactions are from the records of Flobee, Inc. Total Assets Total Stockholder's Equity A. Decrease No effect B. Decrease Decrease C. No effect Decrease D. Increase Increase E. None of the above 1. Flobee declares a $2 per share dividend on 2,000 shares of common stock. 2. Flobee pays the previously declared dividend on common stock. 3. Flobee purchases 1000 shares of treasury stock for $41 per share. 4. Flobee declares a 3 for 1 stock split. 5. Flobee declares and issues a 5% stock dividend. 6. Flobee issues preferred stock at par value for $500,000. 7. At the maturity date, Flobee retires bonds that sold for $96,000 at the face value of $100,000. 8. Ms. Able, a major shareholder of Flobee, sells her stock to Ms. Baker. Ms. Able paid $5 a share for the stock and she sold it at $34 a share. No #9 No #10 Page 3
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Part 2 Welsh Inc. issued bonds with a face value of $10,000 on January 1, 2003. The bonds pay 9% interest annually on December 31. The bonds mature in 3 years. Consider the following bond amortization table to answer the following questions. Date Interest Paid Interest Expense Amortization Carrying Value 1/1/03 -- -- -- $9,512 12/31/03 ? $1,046 146 ? 11. How much interest will Welsh Inc. pay to the bondholders on December 31, 2003? A. $1,100 B. $900 C. $1,192 D. $951 E. $1,046 12. What was the market rate of interest when the bonds were issued? Choose the closest answer. A. 9% B. 10% C. 10.5% D. 11% 13. What was the issue price of the bond? A. $10,558 B. $9,658 C. $9,512 D. $3,188 E. $10,000 14. What is the carrying value of the bond at 12/31/2003? A. $10,558 B. $9,658 C. $9,512 D. $3,188 E. $10,000 15. Total interest expense reported over the life of this bond will be: (Hint- you should not need to complete the entire table to answer this question) A. $2,252 B. $2,700 C. $3,138 D. $3,188 16. The carrying value of the bond at maturity will be: A. $10,000 B. $9,512 C. $10,448 D. $12,700 Page 4
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Part 3. Putnam Company had the following stockholders equity section at January 1, 2003. Common stock, $5 par value, 100,000 shares authorized, 34,000 shares issued and outstanding $170,000 Paid-in-capital in excess of par, Common Stock $714,000 Preferred stock, $50 par value, 4%, noncumulative, 6,000 shares authorized, 1,000 shares issued and outstanding $50,000 Retained Earnings $362,000 Answer the following questions about Putnam Company. They are chronological events so you should consider the information in earlier questions as you answer later questions. 17. On January 2, 2003, Putnam issues 2,000 shares of Common Stock for $25 each.
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FINAL Exam - Please remember these are just some selected...

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