Question 1. 1. (TCO C) Which characteristic is not possessed by intangible assets? (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 Physical existence\t\u00a0 \u00a0 \u00a0 \u00a0 Short-lived\t\u00a0 \u00a0 \u00a0 \u00a0 Result in future benefits\t\u00a0 \u00a0 \u00a0 \u00a0 Expensed over current and\/or future years\u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 2. 2. \u00a0 (TCO C) One factor that is not considered in determining the useful life of an intangible asset is (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 salvage value.\t\u00a0 \u00a0 \u00a0 \u00a0 provisions for renewal or extension.\t\u00a0 \u00a0 \u00a0 \u00a0 legal life.\t\u00a0 \u00a0 \u00a0 \u00a0 expected actions of competitors.\u00a0\t\u00a0\t\u00a0\tQuestion 3. 3. \u00a0 (TCO C) Intangible assets are reported on the balance sheet (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 with an accumulated depreciation account.\t\u00a0 \u00a0 \u00a0 \u00a0 in the property, plant, and equipment section.\t\u00a0 \u00a0 \u00a0 \u00a0 separately from other assets.\t\u00a0 \u00a0 \u00a0 \u00a0 None of the above\u00a0\t\u00a0\t\u00a0\tQuestion 4. 4. (TCO D) Which of the following is a current liability? (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 A long-term debt maturing currently, which is to be paid with cash in a sinking fund\t\u00a0 \u00a0 \u00a0 \u00a0 A long-term debt maturing currently, which is to be retired with proceeds from a new debt issue\t\u00a0 \u00a0 \u00a0 \u00a0 A long-term debt maturing currently, which is to be converted into common stock\t\u00a0 \u00a0 \u00a0 \u00a0 A long-term debt maturing currently, which is to be paid with current assets\u00a0\t\u00a0\t\u00a0\tQuestion 5. 5. (TCO D) A contingent liability (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 definitely exists as a liability but its amount and due date are indeterminable.\t\u00a0 \u00a0 \u00a0 \u00a0 is accrued even though not reasonably estimated.\t\u00a0 \u00a0 \u00a0 \u00a0 is not disclosed in the financial statements.\t\u00a0 \u00a0 \u00a0 \u00a0 is the result of a loss contingency.\u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 6. 6. (TCO D) Which of the following is a characteristic of the expense warranty approach, but not the sales warranty approach? (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 Estimated liability under warranties\t\u00a0 \u00a0 \u00a0 \u00a0 Warranty expense\t\u00a0 \u00a0 \u00a0 \u00a0 Unearned warranty revenue\t\u00a0 \u00a0 \u00a0 \u00a0 Warranty revenue\u00a0\t\u00a0\t\u00a0\tQuestion 7. 7. (TCO D) The term used for bonds that are unsecured regarding principal is (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 junk bonds.\t\u00a0 \u00a0 \u00a0 \u00a0 debenture bonds.\t\u00a0 \u00a0 \u00a0 \u00a0 in-debenture bonds.\t\u00a0 \u00a0 \u00a0 \u00a0 callable bonds.\u00a0\t\u00a0\t\u00a0\tQuestion 8. 8. \u00a0(TCO D) On July 1, 2009, Noble, Inc. issued 9% bonds in the face amount of $5,000,000, which mature on July 1, 2015. The bonds were issued for $4,695,000 to yield 10%, resulting in a bond discount of $305,000. Noble uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2011, Noble’s unamortized bond discount should be (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 $264,050.\t\u00a0 \u00a0 \u00a0 \u00a0 $255,000.\t\u00a0 \u00a0 \u00a0 \u00a0 $244,000.\t\u00a0 \u00a0 \u00a0 \u00a0 $215,000.\u00a0\ta2009″\ufffd2010\t$4,695,000 + [($4,695,000 \u00d7 .1) “\ufffd ($5,000,000 \u00d7 .09)] = $4,714,500.\u00a0\t2010″\ufffd2011:\t$4,714,500 + ($471,450 “\ufffd $450,000) = $4,735,950 $5,000,000 “\ufffd $4,735,950 = $264,050\t\u00a0\tQuestion 9. 9. \u00a0(TCO E) Total stockholders’ equity represents (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 a claim to specific assets contributed by the owners.\t\u00a0 \u00a0 \u00a0 \u00a0 the maximum amount that can be borrowed by the enterprise.\t\u00a0 \u00a0 \u00a0 \u00a0 a claim against a portion of the total assets of an enterprise.\t\u00a0 \u00a0 \u00a0 \u00a0 only the amount of earnings that have been retained in the business.\u00a0\t\u00a0\t\u00a0\tQuestion 10. 10. (TCO F) Houser Corporation owns 4,000,000 shares of stock in Baha Corporation. On December 31, 2010, Houser distributed these shares of stock as a dividend to its stockholders. This is an example of a (Points : 5)\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 property dividend.\t\u00a0 \u00a0 \u00a0 \u00a0 stock dividend.\t\u00a0 \u00a0 \u00a0 \u00a0 liquidating dividend.\t\u00a0 \u00a0 \u00a0 \u00a0 cash dividend. \u00a0\t\u00a0\t\u00a0\tPage 2\u00a0\t\u00a0\t\u00a0\tQuestion 1. 1. (TCO C) If intangible assets are acquired for stock, how is the cost of the intangible determined? (Points : 20)\u00a0\t\u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\t\u00a0\tQuestion 2. 2. (TCO D) Total payroll of Watson Co. was $920,000, of which $160,000 represented amounts paid in excess of $100,000 to certain employees. The amount paid to employees in excess of $7,000 was $720,000. Income taxes withheld were $225,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the FICA tax is 7.65% on an employee’s wages to $100,000 and 1.45% in excess of $100,000.\u00a0\t(a) Prepare the journal entry for the wages and salaries paid.\t(b) Prepare the entry to record the employer payroll taxes. (Points : 30)\u00a0\t\u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\t\u00a0\tQuestion 3. 3. (TCO D) On January 1, 2010, Solis Co. issued its 10% bonds in the face amount of $3,000,000, which mature on January 1, 2020. The bonds were issued for $3,405,000 to yield 8%, resulting in bond premium of $405,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2010, Solis’s adjusted unamortized bond premium is what amount? Please show computations. (Points : 35)\u00a0\t\u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\t\u00a0\tQuestion 4. 4.\u00a0\t(TCO E) The original sale of the 450 par-value common shares of Gray Company was recorded as follows:\t\u00a0\t\u00a0\tRecord the treasury stock transactions (given below) under the cost method.\tTransactions:\t(a) \u00a0 Bought 300 shares of common stock as treasury shares at $62\u00a0\t(b) \u00a0 Sold 80 shares of treasury stock at $60\u00a0\t(c) \u00a0 Sold four treasury shares at $68 \u00a0 \u00a0 \u00a0\u00a0\t(Points : 30)\u00a0\t\u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\t\u00a0\tQuestion 5. 5. (TCO F) In each of the following independent cases, it is assumed that the corporation has $400,000 of 6% preferred stock and $1,600,000 of common stock outstanding, each having a par value of $10. No dividends have been declared for 2009 and 2010.\t(a) As of 12\/31\/11, it is desired to distribute $250,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and nonparticipating?\t(b) As of 12\/31\/11, it is desired to distribute $400,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and participating up to 11% in total?\t(c) On 12\/31\/11, the preferred stockholders received a $120,000 dividend on their stock, which is cumulative and fully participating. How much money was distributed in total for dividends during 2011? (Points : 30)\u00a0\t\u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\t\u00a0\tQuestion 6. 6. (TCO A) At December 31, 2010, Kifer Company had 500,000 shares of common stock outstanding. On October 1, 2011, an additional 100,000 shares of common stock were issued. In addition, Kifer had $10,000,000 of 6% convertible bonds outstanding at December 31, 2010, which are convertible into 225,000 shares of common stock. No bonds were converted into common stock in 2011. The net income for the year ended December 31, 2011, was $3,000,000. Assuming the income tax rate was 30%, what would be the diluted earnings per share for the year ended December 31, 2011 (rounded to the nearest penny)? Show all computations. (Points : 25)\u00a0\t\u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\t\u00a0\tQuestion 7. 7.\u00a0\t(TCO B) The following information pertains to Fox Inc.’s portfolio of marketable securities for the Year ended Dec 31, Year 1 and Dec 31, Year 2.\t\u00a0 Cost Fair Value at\u00a0\t\u00a0\t\u00a0\tRecord the journal entries for the following marketable securities transactions based on the information given in the table.\t1. Mark to market journal entry for the \u00a0Smith Co security at 12\/31 Year 1\t2. Mark to market journal entry for the \u00a0Jones Co security at 12\/31 Year 1\t3. Mark to market journal entry for the \u00a0Williams Co security at 12\/31 Year 1\t4. Mark to market journal entry for the \u00a0Gores \u00a0Co security at 12\/31 Year 1\t5. Mark to market journal entry for the \u00a0Smith Co security at 12\/31 Year 2\t6. Mark to market journal entry for the \u00a0Jones \u00a0Co security at 12\/31 Year 2\t7. Mark to market journal entry for the \u00a0Williams Co security at 12\/31 Year 2\t8. Mark to market journal entry for the \u00a0Gores \u00a0Co security at 12\/31 Year 2\t9. Journal entry to record \u00a0purchase of Martin Co. Investment\t10. Journal entry to record the impairment of Martin Co. Investment\t(Points : 30)<\/p>\n","protected":false},"excerpt":{"rendered":"
Question 1. 1. (TCO C) Which characteristic is not possessed by intangible assets? (Points : 5)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Physical existence \u00a0 \u00a0 \u00a0 \u00a0 Short-lived \u00a0 \u00a0 \u00a0 \u00a0 Result in future benefits \u00a0 \u00a0 \u00a0 \u00a0 Expensed Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-201367","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201367","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=201367"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201367\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=201367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=201367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=201367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}