ACC 423 Final Exam Guide (New 2017, With EXCEL

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values Week 5 Final Exam CPA Question 01 CPA Question 02 CPA
Question 05 Question 29 Brief Exercise 15-4 Exercise 15-1 CPA
Question 04 CPA Question 06 Brief Exercise 16-2 Brief Exercise 16-7
Brief Exercise 17-1 Brief Exercise 17-9 Brief Exercise 17-13 Exercise
17-3 Exercise 17-10 Question 8 Brief Exercise 19-3 Brief Exercise
19-12 Exercise 19-2 CPA Question 08 CPA Question 02 Brief
Exercise 20-8 Exercise 20-1 Exercise 20-5 Exercise 20-12 CPA
Question 03 Exercise 22-19 CPA Question 01 On September 1, 2017,
Hyde Corp., a newly formed company, had the following stock issued
and outstanding: Common stock, no par, $1 stated value, 5,000
shares originally issued at $15 per share. Preferred stock, $10 par
value, 1,500 shares originally issued for $25 per share. Hyde's
September 1, 2017 statement of stockholders' equity should report
Common stock Preferred stock Additional Paid-in capital CPA
Question 02 Beck Corp. issued 200,000 shares of common stock
when it began operations in year 1 and issued an additional 100,000
shares in year 2. Beck also issued preferred stock convertible to
100,000 shares of common stock. In year 3, Beck purchased 75,000
shares of its common stock and held it in Treasury. At December 31,
year 3, how many shares of Beck's common stock were outstanding?
CPA Question 05 Jones Co. had 50,000 shares of $5 par value
common stock outstanding at January 1. On August 1, Jones declared
a 5% stock dividend followed by a two-for-one stock split on
September 1. What amount should Jones report as common shares
outstanding at December 31? Question 29 Grouper Corp. had
$100,000 of 7%, $20 par value preferred stock and 12,000 shares of
$25 par value common stock outstanding throughout 2017. Assuming
that total dividends declared in 2017 were $64,000, and that the
preferred stock is not cumulative but is fully participating, common
stockholders should receive 2017 dividends of what amount?
Assuming that total dividends declared in 2017 were $64,000, and
that the preferred stock is fully participating and cumulative with
preferred dividends in arrears for 2016, preferred stockholders should
receive 2017 dividends totaling what amount? Assuming that total
dividends declared in 2017 were $30,000, that the preferred stock is
cumulative, nonparticipating, and was issued on January 1, 2016, and
that $5,000 of preferred dividends were declared and paid in 2016, the
common stockholders should receive 2017 dividends totaling what
amount? Brief Exercise 15-4 Kingbird Corporation issued 384 shares
of $10 par value common stock and 144 shares of $50 par value
preferred stock for a lump sum of $19,872. The common stock has a
market price of $20 per share, and the preferred stock has a market
price of $100 per share. Prepare the journal entry to record the
issuance. Exercise 15-1 During its first year of operations, Metlock
Corporation had the following transactions pertaining to its common
stock. Jan. 10 Issued 80,500 shares for cash at $6 per share. Mar. 1
Issued 5,000 shares to attorneys in payment of a bill for $37,700 for
services rendered in helping the company to incorporate. July 1 Issued
33,300 shares for cash at $8 per share. Sept. 1 Issued 62,100 shares
for cash at $10 per share. (a) Prepare the journal entries for these
transactions, assuming that the common stock has a par value of $5
per share. (b) Prepare the journal entries for these transactions,
assuming that the common stock is no-par with a stated value of $2
per share. CPA Question 04 A restricted stock award was granted at
the beginning of 2015 calling for 3,000 shares of stock to be awarded
to executives at the beginning of 2019. The fair value of one option
was $20 at grant date. During 2017, 100 shares were forfeited because
an executive left the firm. What amount of compensation expense is
recognized for 2017? CPA Question 06 A company had the following
outstanding shares as of January 1, year 2: Preferred stock, $60 par,
4%, cumulative 10,000 shares Common stock, $3 par 50,000 shares
On April 1, year 2, the company sold 8,000 shares of previously
unissued common stock. No dividends were in arrears on January 1,
year 2, and no dividends were declared or paid during year 2. Net
income for year 2 totaled $236,000. What amount is basic earnings
per share for the year ended December 31, year 2? Brief Exercise 16-
2 Oriole Corporation has outstanding 2,100 $1,000 bonds, each
convertible into 60 shares of $10 par value common stock. The bonds
are converted on December 31, 2017, when the unamortized discount
is $26,200 and the market price of the stock is $21 per share. Record
the conversion using the book value approach. Brief Exercise 16-7 On
January 1, 2017, Larkspur Corporation granted 2,000 shares of
restricted $5 par value common stock to executives. The market price
(fair value) of the stock is $66 per share on the date of grant. The
period of benefit is 2 years. Prepare Larkspurs journal entries for
January 1, 2017, and December 31, 2017 and 2018. Brief Exercise 17-
1 Teal Company purchased, on January 1, 2017, as a held-to-maturity
investment, $81,000 of the 8%, 5-year bonds of Chester Corporation
for $74,859, which provides an 10% return. Prepare Teals journal
entries for (a) the purchase of the investment, and (b) the receipt of
annual interest and discount amortization. Assume effective-interest
amortization is used. BE 17-3 Brief Exercise 17-9 The following
information relates to Culver Co. for the year ended December 31,
2017: net income 1,321 million; unrealized holding loss of $11.7
million related to available-for-sale debt securities during the year;
accumulated other comprehensive income of $56.3 million on
December 31, 2016. Assuming no other changes in accumulated other
comprehensive income. Determine (a) other comprehensive income
for 2017, (b) comprehensive income for 2017, and (c) accumulated
other comprehensive income at December 31, 2017 Exercise 17-3 On
January 1, 2017, Carla Company purchased 8% bonds having a
maturity value of $360,000, for $390,329.57. The bonds provide the
bondholders with a 6% yield. They are dated January 1, 2017, and
mature January 1, 2022, with interest receivable January 1 of each
year. Carla Company uses the effective-interest method to allocate
unamortized discount or premium. The bonds are classified in the
held-to-maturity category. Question 8 Skysong financial income for
Lake Inc. is $290,000, and its taxable income is $100,000 for 2018.
Its only temporary difference at the end of the period relates to a
$100,000 difference due to excess depreciation for tax purposes. If the
tax rate is 39% for all periods, compute the amount of income tax
expense to report in 2018. No deferred income taxes existed at the
beginning of the year. Brief Exercise 19-3 Marigold Corporation
began operations in 2017 and reported pretax financial income of
$206,000 for the year. Marigolds tax depreciation exceeded its book
depreciation by $33,000. Marigolds tax rate for 2017 and years
thereafter is 30%. Assume this is the only difference between
Marigolds pretax financial income and taxable income. Prepare the
journal entry to record the income tax expense, deferred income taxes,
and income taxes payable Brief Exercise 19-12 Blossom Corporation
had the following tax information. Year Taxable Income Tax Rate
Taxes Paid 2015 $306,000 34% $104,040 2016 324,000 29% 93,960
2017 393,000 29% 113,970 In 2018, Blossom suffered a net operating
loss of $488,000, which it elected to carry back. The 2018 enacted tax
rate is 28%. Prepare Blossoms entry to record the effect of the loss
carryback. Exercise 19-2 The following information is available for
Pronghorn Corporation for 2016 (its first year of operations). 1.
Excess of tax depreciation over book depreciation, $40,800. This
$40,800 difference will reverse equally over the years 20172020. 2.
Deferral, for book purposes, of $21,400 of rent received in advance.
The rent will be recognized in 2017. 3. Pretax financial income,
$319,400. 4. Tax rate for all years, 30%. CPA Question 08 Brass Co.
reported income before income tax expense of $60,000 for 2017.
Brass had no permanent or temporary timing differences for tax
purposes. Brass has an effective tax rate of 30% and a $40,000 net
operating loss carry-forward from 2016. What is the maximum
income tax benefit that Brass can realize from the loss carry-forward
for 2017? Brief Exercise 20-8 Windsor Corporation has the following
balances at December 31, 2017. Projected benefit obligation
$2,705,000 Plan assets at fair value 2,099,000 Accumulated OCI
(PSC) 995,000 What is the amount for pension liability that should be
reported on Windsor's balance sheet at December 31, 2017? Exercise
20-1 The following information is available for the pension plan of
Marigold Company for the year 2017. Actual and expected return on
plan assets $ 16,300 Benefits paid to retirees 38,400 Contributions
(funding) 94,400 Interest/discount rate 11 % Prior service cost
amortization 8,800 Projected benefit obligation, January 1, 2017
510,000 Service cost 63,300 Exercise 20-12 Shamrock Company
received the following selected information from its pension plan
trustee concerning the operation of the companys defined benefit
pension plan for the year ended December 31, 2017. January 1, 2017
December 31, 2017 Projected benefit obligation $1,499,000
$1,527,000 Market-related and fair value of plan assets 802,000
1,127,200 Accumulated benefit obligation 1,622,000 1,742,500
Accumulated OCI (G/L)Net gain 0 (199,900 ) The service cost
component of pension expense for employee services rendered in the
current year amounted to $78,000 and the amortization of prior
service cost was $120,500. The companys actual funding
(contributions) of the plan in 2017 amounted to $245,000. The
expected return on plan assets and the actual rate were both 10%; the
interest/discount (settlement) rate was 10%. Accumulated other
comprehensive income (PSC) had a balance of $1,205,000 on January
1, 2017. Assume no benefits paid in 2017. CPA Question 03 Your
answer has been saved and sent for grading. See Gradebook for score
details. During 2017, Orca Corp. decided to change from the FIFO
method of inventory valuation to the weighted-average method.
Inventory balances under each method were as follows: FIFO
Weighted-average January 1, 2017 $71,000 $77,000 December 31,
2017 $79,000 $83,000 Orca's income tax rate is 30%. In its 2017
financial statements, what amount should Orca report as the
cumulative effect of this accounting change? Exercise 22-18 Pina
Tool Companys December 31 year-end financial statements
contained the following errors. December 31, 2017 December 31,
2018 Ending inventory $10,500 understated $7,400 overstated
Depreciation expense $2,100 understated An insurance premium of
$70,200 was prepaid in 2017 covering the years 2017, 2018, and
2019. The entire amount was charged to expense in 2017. In addition,
on December 31, 2018, fully depreciated machinery was sold for
$13,500 cash, but the entry was not recorded until 2019. There were
no other errors during 2017 or 2018, and no corrections have been
made for any of the errors. (Ignore income tax considerations.)
Question 18 In January 2017, installation costs of $5,800 on new
machinery were charged to Maintenance and Repairs Expense. Other
costs of this machinery of $29,000 were correctly recorded and have
been depreciated using the straight-line method with an estimated life
of 10 years and no salvage value. At December 31, 2018, it is decided
that the machinery has a remaining useful life of 20 years, starting
with January 1, 2018. What entries should be made in 2018 to
correctly record transactions related to machinery, assuming the
machinery has no salvage value? The books have not been closed for
2018 and depreciation expense has not yet been recorded for 2018.