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ACC 423 Final Exam

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ACC 423 Final Exam

Question 1: Buttercup Corporation issued 250 shares of $11 par value common stock for $4,125. Prepare Buttercup' journal entry.

Question 2: Wilco Corporation has the following account balances at December 31, 2012.

Question 3: Woolford Inc. declared a cash dividend of $1.38 per share on its 2.22 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare the journal entries necessary on those three dates.

Question 4: The outstanding capital stock of Pennington Corporation consists of 3,100 shares of $109 par value, 6% preferred, and 5,700 shares of $52 par value common. Assuming that the company has retained earnings of $83,000, all of which is to be paid out in dividends,

Question 5: Martinez Company's ledger shows the following balances on December 31, 2012.

Question 6: On January 1, 2012, Barwood Corporation granted 5,040 options to executives. Each option entitles the holder to purchase one share of Barwood's $5 par value common stock at $50 per share at any time during the next 5 years.

Question 7: Rockland Corporation earned net income of $340,800 in 2012 and had 100,000 shares of common stock outstanding throughout the year.

Question 8: DiCenta Corporation reported net income of $250,000 in 2012 and had 50,000 shares of common stock outstanding throughout the year.

Question 9: Ferraro, Inc. established a stock appreciation rights (SAR) program on January 1, 2012, which entitles executives to receive cash at the date of exercise for the difference between the market price of the stock and the pre-established price of $24 on 5,050 SARs.

Question 10: Hillsborough Co. has an available-for-sale investment in the bonds of Schuyler with a carrying (and fair) value of $88,020. Hillsborough determined that due to poor economic prospects for Schuyler, the bonds have decreased in value to $57,020. It is determined that this loss in value is other-than temporary.

Question 11: Capriati Corporation made the following cash purchases of securities during 2012, which is the first year in which Arantxa invested in securities.

Question 12: (Journal Entries for Fair Value and Equity Methods) Presented below are two independent situations. Prepare all necessary journal entries in 2012 for each situation.

Question 13: (Equity Method) Gator Co. invested $1,380,000 in Demo Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in dividends each year. Use the information in the following T-account for the investment in Demo to answer the following questions.

Question 14: (Fair Value and Equity Method Compared). Gregory Inc. acquired 20% of the outstanding common stock of Handerson Inc. on December 31, 2012. The purchase price was $1,320,000 for 50,000 shares. Handerson Inc. declared and paid an $0.87 per share cash dividend on June 30 and on December 31, 2013.

Question 15: (Call Option). On January 2, 2012, Jones Company purchases a call option for $450 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January 2, 2012

Question 16: In 2012, Amirante Corporation had pretax financial income of $207,000 and taxable income of $166,400. The difference is due to the use of different depreciation methods for tax and accounting purposes.

Question 17: At December 31, 2012, Fell Corporation had a deferred tax liability of $732,802, resulting from future taxable amounts of $2,155,300 and an enacted tax rate of 34%. In May 2013, a new income tax act is signed into law that raises the tax rate to 42% for 2013 and future years.

Question 18: AMR Corporation (parent company of American Airlines) reported the following for 2009 (in millions).

Question 19: For Warren Corporation, year-end plan assets were $2,094,700. At the beginning of the year, plan assets were $1,762,400. During the year, contributions to the pension fund were $120,000, and benefits paid were $200,000. Compute Warren's actual return on plan assets.

Question 20: For 2010, Campbell Soup Company had pension expense of $48 million and contributed $296 million to the pension fund. Prepare Campbell Soup Company's journal entry to record pension expense and funding.

Question 21: Lahey Corp. has three defined-benefit pension plans as follows.

Question 22: For 2012, Sampsell Inc. computed its annual postretirement expense as $278,680. Sampsell's contribution to the plan during 2012 was $185,750. Prepare Sampsell's 2012 entry to record postretirement expense.

Question 23: Wertz Corporation decided at the beginning of 2012 to change from the completed-contract method to the percentage-of-completion method for financial reporting purposes. The company will continue to use completed-contract method for tax purposes. For years prior to 2012,

Question 24: In 2012, Bailey Corporation discovered that equipment purchased on January 1, 2010, for $50,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 29%. Prepare Hiatt's 2012 journal entry to correct the error.

Question 25: At January 1, 2012, Beilder Company reported retained earnings of $2,027,300. In 2012, Beilder discovered that 2011 depreciation expense was understated by $442,300. In 2012, net income was $931,270 and dividends declared were $204,310. The tax rate is 38%. Complete the 2012 retained earnings statement for Beilder Company.

Question 26: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the investment was accounted for using the equity method. In early 2012, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2012,

Question 27: Manno Corporation has the following information available concerning its postretirement benefit plan for 2012.

Question 28: Ravonette Corporation issued 310 shares of $13 par value common stock and 130 shares of $47 par value preferred stock for a lump sum of $17,500. The common stock has a market price of $22 per share, and the preferred stock has a market price of $98 per share. Prepare the journal entry to record the issuance

Question 29: Garfield Company purchased, as a held-to-maturity investment, $82,400 of the 9%, 8-year bonds of Chester Corporation for $73,919, which provides an 11% return.

Question 30: Clydesdale Corporation has a cumulative temporary difference related to depreciation of $606,600 at December 31, 2012. This difference will reverse as follows: 2013, $43,100; 2014, $264,300; and 2015, $299,200.

ACC 423 Final Exam Question 1: Buttercup Corporation issued 250 shares of $11 par value common stock for $4,125. Prepare Buttercup' journal entry. Question 2: Wilco Corporation has the following account balances at December 31, 2012. Question 3: W
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