Assignment 4

Print Assignment: Assignment 4 ::true
Page 1 of 10
Question 1
Adana Inc. reported net income of $186,000 during 2014 and paid dividends of $ 26,000 on
ordinary shares. It also has 10,000 shares of 6%, $100 par value, non-cumulative preference
shares outstanding. Ordinary shareholders equity was $1,200,000 on January 1, 2014, and
$1,600,000 on December 31, 2014. The companys return on ordinary equity for 2014 is
10.0%.
9.0%.
7.1%.
13.3%.
Question 2
Dailey Company is a publicly held corporation whose $1 par value ordinary shares are actively
traded at $22 per share. The company issued 3,000 shares to acquire land recently advertised at
$82,000. When recording this transaction, Dailey Company will
credit Share PremiumOrdinary for $79,000.

debit Land for $82,000.
debit Land for $66,000.
credit Share CapitalOrdinary for $66,000.
Question 3
Lang Inc. reported net income of 235,000 during 2014 and paid dividends of 26,000 on ordinary
shares. It also has 10,000 shares of 6%, 100 par value preference share outstanding. Ordinary
shareholders' equity was 1,200,000 on January 1, 2014, and 1,600,000 on December 31, 2014.
The company's return on ordinary shareholders' equity for 2014 is:
12.5%.
14.9%.
10.6%.
16.8%.
http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014
Page 2 of 10
Question 4
Kinadynes land account decreased 90,000 as a result of a cash sale in which land was sold for
100,000. A gain was recognized on the sale for 10,000. The Equipment account increased
20,000 as a result of a cash equipment acquisition and by 25,000 as a result of the purchase of
a truck by issuing a five-year note for 25,000. In addition, Notes Payable increased from an
issuance of a note for cash for 50,000. How much is cash provided by investing activities?
70,000
80,000
55,000
105,000
Question 5
If Vickers Company issues 5,000 ordinary shares with a $5 par value for $175,000,
Cash will be debited for $150,000.

Share PremiumOrdinary will be credited for $150,000.
Share PremiumOrdinary will be credited for $25,000.
Share CapitalOrdinary will be credited for $175,000.
Question 6
Delsman Corporation purchased 2,200 of its $3 par value ordinary shares for $140,800 on August
1. It will hold these shares in the treasury until resold. On December 1, the corporation
sold 1,320 treasury shares for cash at $74 per share.
Journalize the treasury share transactions. (Record entries in the order displayed in the
problem statement. Credit account titles are automatically indented when amount is
entered. Do not indent manually.)
Date
Account Titles and

Explanation
Debit
Credit
Page 3 of 10
Question 7
Inmann Corporation has 3,000 7%, 120 par value preference shares outstanding at December
31, 2014. At December 31, 2014, the company declared a 120,600 cash dividend.
Determine the dividend paid to preference shareholders and ordinary shareholders under each of
the following scenarios.
1. The preference shares are non-cumulative, and the company has not missed any dividends in
previous years.
The dividend paid to preference shareholders
The dividend paid to ordinary shareholders
2. The preference shares are non-cumulative, and the company did not pay a dividend in each of
the two previous years.
The dividend paid to ordinary shareholders
3. The preference shares are cumulative, and the company did not pay a dividend in each of the
two previous years.
The dividend paid to ordinary shareholder
Question 8
Each of the items below must be considered in preparing a statement of cash flows for Aksu Co.
for the year ended December 31, 2014. For each item, state how it should be shown in the
statement of cash flows for 2014.
(a) Issued bonds for
150,000 cash.
(b) Purchased equipment for
(c) Sold land costing
200,000 cash.
50,000 for
(d) Declared and paid a
50,000 cash.
20,000 cash dividend.
Page 4 of 10
Question 9
The three accounts shown below appear in the general ledger of Chaudry Co. during 2014.
Equipment
Date
Debit
Jan. 1
Balance
July 31
Purchase of equipment
70,660
Sept. 2
Cost of equipment constructed
51,200
Nov. 10
Cost of equipment sold
Credit
Balance
160,620
231,280
282,480
51,420
231,060
Credit
Balance
Accumulated DepreciationEquipment
Date
Debit
Jan. 1
Balance
71,840
Nov. 10
Accumulated depreciation on equipment sold
Dec. 31
Depreciation for year
28,380
43,460
21,240
64,700
Credit
Balance
Retained Earnings
Date
Debit
Jan. 1
Balance
104,290
Aug. 23
Dividends (cash)
Dec. 31
Net income
16,700
87,590
67,250
154,840
From the postings in the accounts, indicate how the information is reported on a statement of cash
flows using the indirect method. The loss on disposal of plant assets was $5,650. (Hint: Cost of
equipment constructed is reported in the investing activities section as a decrease in cash of
$51,200.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in
parenthesis e.g. (15,000).)
CHAUDRY CO.
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
$
Adjustments to reconcile net income to
Page 5 of 10
Question 10
Zermatt Corporation began operations on April 1 by issuing 51,400 CHF3 par value ordinary
shares for cash at CHF13 per share. On April 19, it issued 2,000 ordinary shares to attorneys in
settlement of their bill of CHF29,200 for organization costs.
Journalize both issuances, assuming the shares are not publicly traded. (Record entries in the
order displayed in the problem statement. Credit account titles are automatically
indented when amount is entered. Do not indent manually.)
Date
Account Titles and

Explanation
Debit
Credit
Question 11
Raymond Corporation has retained earnings of 3,484,830 on January 1, 2014. During the year,
Raymond earned 1,239,790 of net income. It declared and paid a 155,960 cash dividend. In
2014, Raymond recorded an adjustment of 80,168 due to the overstatement (from mathematical
error) of 2013 depreciation expense.
Prepare a retained earnings statement for 2014. (List items that increase retained earnings
first.)
RAYMOND CORPORATION
Retained Earnings Statement
Page 6 of 10
Question 12
On January 1, 2014, Leonard Corporation purchased 1,500 of treasury shares. Other information
regarding Leonard Corporation is provided below.
2013
2014
$198,900
$214,100
Dividends on preferred share
$34,300
$34,300
Dividends on ordinary share
$18,300
$25,200
Net income
Weighted-average number of ordinary shares outstanding
10,200
8,700
Ordinary shareholders equity beginning of year
$598,400
$744,700
Ordinary shareholders equity end of year
$744,700
$820,711
Compute return on ordinary shareholders equity for each year. (Round answers to 2 decimal
places, e.g. 10.50% or $10.50.)
2013
Return on ordinary shareholders equity
2014
%
Question 13
Jude Corporation has been authorized to issue 20,400 $101 par value, 10%, non-cumulative
preference shares and 1,109,016 no-par ordinary shares. The corporation assigned a $2.92 stated
value to the ordinary shares. At December 31, 2014, the ledger contained the following balances
pertaining to equity.
Share CapitalPreference
Share PremiumPreference
$105,040
29,660
Share CapitalOrdinary
1,109,016
Share PremiumOrdinary
1,663,800
Treasury SharesOrdinary (1,020 shares)
9,180
Share PremiumTreasury
1,020
Retained Earnings
80,200
The preference shares were issued for land having a fair value of $134,700. All ordinary shares
Page 7 of 10
issued were for cash. In November, 1,530 ordinary shares were purchased for the treasury at a
per share cost of $9. In December, 510 treasury shares were sold for $11 per share. No dividends
were declared in 2014.
Prepare the journal entries for the: (Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
(1)
(2)
(3)
(4)
Issuance of preference shares for land.

Issuance of ordinary shares for cash.
Purchase of treasury shares (ordinary) for cash.
Sale of treasury shares for cash.
No. Account Titles and Explanation
Debit
Credit
1.
2.
3.
4.
Prepare the equity section at December 31, 2014.

JUDE CORPORATION
Statement of Financial Position (Partial)
December 31, 2014
Page 8 of 10
:
$
Question 14
Sentry Company has had 4 years of retained earnings. Due to this success, the market price of
its 491,000 $4 par value ordinary shares has increased from $15 per share to $51. During this
period, share capital and share premium remained the same at a total of $2,313,500. Retained
earnings increased from $1,846,800 to $12,091,900. CEO T. Boldt is considering either a 15%
share dividend or a 2-for-1 share split.
He asks you to show the before-and-after effects of each option on retained earnings.
Retained earnings after share dividend
Retained earnings after share split
$
$
He asks you to show the before-and-after effects of each option on total equity.
Total equity after share dividend
Total equity after share split
$
$
He asks you to show the before-and-after effects of each option on outstanding shares and par
value per share.
After Dividend
After Split
Outstanding share
Par value per share
Question 15
Condensed financial data of Sinjh Ltd. follow.
SINJH LTD.
Comparative Statements of Financial Position
December 31
Assets
Equipment
2014
2013
$264,720
$242,980
Accumulated depreciationequipment
(46,490 )
(51,840 )
Long-term investments
139,280
114,730
29,280
25,270
Prepaid expenses
Page 9 of 10
Inventory
111,460
102,910
91,980
33,940
104,800
47,070
$695,030
$515,060
$219,350
$174,160
Retained earnings
231,110
106,480
Bonds payable
117,080
149,560
Accounts payable
111,060
67,710
16,430
17,150
$695,030
$515,060
Accounts receivable
Cash
Total
Equity and Liabilities
Share capitalordinary
Accrued expenses payable

Total
SINJH LTD.
Income Statement
Sales revenue
$392,750
4,760
Gain on disposal of plant assets
$397,510
Less:
Cost of goods sold
135,940
Operating expenses, excluding depreciation
11,260
Depreciation expense
45,450
Income tax expense
26,820
4,290
Interest expense
223,760
$173,750
Net income
Additional information:
1. New equipment costing $80,280 was purchased for cash during the year.
Old equipment having an original cost of $58,540 and accumulated depreciation of 50,800 was
2.
sold for $12,500 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $49,120 was declared and paid during the year.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease
cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SINJH LTD.
Statement of Cash Flows
$
Adjustments to reconcile net income to
Page 10 of 10

Assignment 4

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Assignment 4

Caricato da

Copyright:

Formati disponibili

Print Assignment: Assignment 4 ::true

credit Share PremiumOrdinary for $79,000.

Print Assignment: Assignment 4 ::true

Cash will be debited for $150,000.

Account Titles and

Print Assignment: Assignment 4 ::true

(b) Purchased equipment for

(c) Sold land costing

(d) Declared and paid a

20,000 cash dividend.

Print Assignment: Assignment 4 ::true

Cost of equipment constructed

Cost of equipment sold

Accumulated depreciation on equipment sold

Depreciation for year

Print Assignment: Assignment 4 ::true

Account Titles and

Print Assignment: Assignment 4 ::true

Dividends on preferred share

Dividends on ordinary share

Weighted-average number of ordinary shares outstanding

Ordinary shareholders equity beginning of year

Ordinary shareholders equity end of year

Treasury SharesOrdinary (1,020 shares)

Print Assignment: Assignment 4 ::true

Issuance of preference shares for land.

No. Account Titles and Explanation

Prepare the equity section at December 31, 2014.

Print Assignment: Assignment 4 ::true

Print Assignment: Assignment 4 ::true

Accrued expenses payable

Gain on disposal of plant assets

Operating expenses, excluding depreciation

Income tax expense

Print Assignment: Assignment 4 ::true

Potrebbero piacerti anche