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Q1 On December 31, 2014, Rayco Inc. had the following balances (all balances are normal): Accounts Amount Preferred Stock, ($100 par value, 5%...

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Q1 On December 31, 2014, Rayco Inc. had the following balances (all balances are normal): Accounts Amount Preferred Stock, ($100 par value, 5% noncumulaTve, 50,000 shares authorized, 10,000 shares issued and outstanding) $1,000,000 Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) $1,000,000 Paid-in Capital in Excess of par, Common 150,000 Retained Earnings 700,000 ±he following events occurred during 2014 and were not recorded: On January 1, Rayco declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends On February 15, Rayco reacquired 1,000 shares of common stock for $20 each. On March 31, Rayco reissued 250 shares of treasury stock for $25 each. On July 1, Rayco reissued 500 shares of treasury stock for $16 each. On October 1, Rayco declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October On December 15, Rayco split common stock 2 shares for 1. Net Income for 2014 was $275,000. Requirements: Prepare journal entries for the transacTons listed above. Prepare a Stockholders' secTon of a classi²ed balance sheet as of December 31, 2014. Q2 On January 1, 2014, XYZ Company purchased 10,000 shares of the stock of Rayco, and did obtain signi²cant in³uence. ±he investment is intended as a lo ±he stock was purchased for $90,000, and represents a 30% ownership stake. Rayco made $25,000 of net income in 2014, and paid dividends of $10,000 ±he price of Rayco's stock increased from $10 per share at the beginning of the year, to $12 per share at the end of the year. Requirements: Prepare the January 1 and December 31 general journal entries for XYZ Company. How much should the XYZ Company report on the balance sheet for the investment in Rayco at the end of 2014? Q3 ±he following is selected informaTon from Rayco Company for the ²scal years ended December 31, 2014: Rayco Company had net income of $1,225,000 DepreciaTon was $500,000, purchases of plant assets were $1,250,000, and disposals of plant assets for $500,000 resulted in a $50,000 gain. Stock was issued in exchange for an outstanding note payable of $725,000. Accounts receivable decreased by $25,000. Accounts payable decreased by $ Dividends of $300,000 were paid to shareholders. Rayco Company had interest expense of $50,000. Cash balance on January 1, 2014 was $250,000. Requirements: Prepare Rayco Company's statement of cash ³ows for the year ended December 31, 2014 using the indirect method. Q4 Rayco CorporaTon had the following bond transacTons during the ²scal year 2014: On January 1: issued ten $1,000 bonds at 102. ±he 5-year bonds is dated January 1, 2014. ±he contract interest rate is 6%. Straight-line amorTzaTon met On July 1: Rayco CorporaTon issued $500,000 of 10%, 10-year bonds. ±he bonds dated January 1, 2014 were issued at 88.5, and pay interest on July 1 an On October 1: issued 10-year bonds $10,000 face value bonds, for $10,853 cash. ±he bonds have a stated rate of 9%, but an e´ecTve rate of 6%. Straight Requirements: Prepare all general journal entries for the three bonds issued and any interest accruals and payments for the ²scal year 2014. (Round all c Q5 XYZ had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhea ±he company did not maintain any inventories, so total cost of goods sold was $4,400. Selling expenses totaled $1,600 ($600 variable and $1,000 ²xed), OperaTng income was $2,500. Round all ²nal answers to nearest dollar or whole number. Requirements: What is the break-even point in sales dollars and in units if the ²xed factory overhead increased by $1,700? What is the break-even point in sales dollars and in units if costs remain as originally projected? What would be the operaTng income if sales units increased by 25%? Q6 XYZ manufactures tote bags. ±he forecasted income statement for the year before any special orders included sales of $4,000,000 (sales price is $10 per Requirements: Prepare an incremental analysis schedule to demonstrate what amount operaTng income would increase or decrease as a result of accep Q7 RSW Company manufactures 10,000 units of wheel sets for use in its annual producTon. Costs are as follows: direct materials are $20,000; direct labor i Requirements: Prepare an incremental analysis schedule to demonstrate if RSW should accept Rayco's o´er. Q8 ±rain Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 100,000 units were started, and 80%
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Queston 8 optons: a) $0.16 b) $0.20 c) $0.36 d) $0.40 e) none of These Q9 ±rain Company had no beginning invenTory and adds all maTerials aT The very beginning of iTs only process. Assume 10,000 uniTs were sTarTed, and 5,000 Queston 9 optons: a) $1.00 if ToTal conversion cosT is $3,000 b) $1.00 if ToTal conversion cosT is $5,000 c) $1.00 if ToTal conversion cosT is $8,000 d) $1.00 if ToTal conversion cosT is $10,000 e) none of These Q10 ±rain Company makes uniTs, and each uniT requires 2 pounds of maTerial aT $3 per pound. 500 and 700 uniTs will be builT in May and June, respectvely. ± Queston 10 optons: a) $2,400 b) $3,000 c) $3,240 d) $4,200 e) none of These Q11 AntcipaTed uniT sales for January are 5,000; sales for February are 4,000; and sales for March are 8,000. Finished goods are consisTenTly mainTained aT 8 Queston 11 optons: a) $0 b)
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Q1
On December 31, 2014, Rayco Inc. had the following balances (all balances are normal):
Accounts
Amount
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares...

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