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Time Value of Money
Long-Term Liabilities
Corporations
Dividends
Miscellaneous
100
Which table would you use to calculate what amount must be deposited today so that $600 may be withdrawn at the end of each year for three years?
Present value of ordinary annuity
100
If a bond's stated interest rate is higher than the market rate than the bond will be issued at a....
What is premium
100
What are the disadvantages of a corporation?
1) Ownership and management are often separated. 2) Double Taxation 3) Government regulation is expensive 4) Start up costs are higher than other business forms
100
What are the three relevant dates when declaring a dividend?
What is Declaration date which creates an obligation or liability for the corporation. Date of record the date in which they record when the stockholders will get dividend checks. Payment date- the date at which the company pays the dividends.
100
What is the difference between preferred stock and common stock?
Common stock represents the basic ownership of a company and preferred stock gives owners certain advantages over common stockholders, such as the right to receive dividends before the common stockholders.
200
Jill wishes to deposit an amount into her saving account that will enable her to withdraw $100 per year for the next three years. She should deposit $100 multiplied by the...
What is Present value of an ordinary annuity
200
If $25,000 is invested for 3 years and earns 5% annual interest, it will grow in value to:
What is $78,813
200
How will you calculate the effect on retained earnings when a corporation's board of directors distributes a 5% stock dividend?
What is retained earnings will be debited for the new shares times the current market value of the stock.
200
What will happen to stockholder's percentage ownership in the stock of a corporation when the corporation declares a stock dividend?
What is stockholders ownership will stay the same
200
What will occur if a corporation issues a 4 for 1 stock split on 10,000 outstanding shares of $80 par common stock?
What is Outstanding shares increases to 40,000 and par value decreases to $20
300
Compound interest is computed semiannually on $2500 for 8 years at 8% annual interest. The future value table is used by multiplying the $2500 by which factor?
What is 16 periods at 4% interest
300
The balance in the bonds payable account is a credit of $65,000. The balance in the Premium on bonds payable account is a credit of $1,200. How much is the bond carrying amount?
What is $66,200
300
What is the effect on stockholders equity in the following situations: 3 for 1 stock split, distribution of a cash dividend, sold common stock.
3 for 1 stock split - no effect distribution of a cash dividend - decrease sold common stock - increase
300
Bob’s Landscaping issues a 10% common stock dividend on 200,000 shares issued and outstanding when the market value of its common stock is $25 per share and the par value of common stock is $15. Record the journal entry on the declaration date.
Debit Retained Earnings $500,000, credit Common stock Distributable $300,000 and credit Paid in Excess of par- common $200,000
300
If Bob's Landscaping is considering the purchase of a lawnmower that will save the company $500 per year in operating costs for a period of 4 years. the most he should pay for lawnmower is equal to...
What is $500 the present value of an ordinary annuity for 4 periods
400
A deposit of $4000 made at the end of each year for three years at 12% would grow to how much?
What is $13,498
400
On December 1, 2014, Bobs Landscaping borrowed $50,000 on a 5% 10 year note with annual installment payments of $5,000 plus interest due on December 1 of each succeeding year. How will the note be shown on the balance sheet dated December 31, 2014?
What is $5000 shown as a current liability; $45,000 shown as long term liability.
400
What would the journal entry be to record the issuance of 30,000 shares of $5 par value common stock sold at $20 per share on the market?
What is Debit cash $600,000 credit common stock $5 par value $150,000 and credit Paid in Excess of Par- Common $450,000
400
Bob’s Landscaping issues a 10% common stock dividend on 200,000 shares issued and outstanding when the market value of its common stock is $25 per share and the par value of common stock is $15. Record the journal entry on the payment date
Debit Common stock Distributable $300,000, and credit Common Stock- $15 par value $300,000
400
Bob’s Landscaping has $10,000 of 9% bonds that mature in 4 years and pay interest semiannually. The company issues the bonds on January 1, 2014 when the market rate is 10%. Bob’s Landscaping actually receives $9614 for the bonds and he uses the straight line method to amortize the bond discount. When Bob makes the first payment how much will he report as interest expense?
What is $498
500
Jane Doe wins the lottery and may pick from the following choices: take $700,000 now, take $1,500,000 15 years from now Assume that Jane Doe uses a discount rate of 6% to evaluate his choices. If he selects option 2 what is the present value of that alternative?
What is $625,905
500
On January 1, 2014 Bob’s Landscaping issues $10,000 of 5-year, 8 % bonds that pay interest semi-annually. The market interest rate is 10% and the bond is sold for $9228. Bob uses the effective-interest method to amortize the bond discount. Semiannual interest payments are mad on June 30 and December 31 each year. What is the journal entry to record the first interest payment?
What is Debit Interest Expense 461 and Credit Discount on Bonds Payable 61, Credit Cash 400
500
Common stock $5 par value=50,000 Paid in capital of excess of par-common=150,000 Given this info, what is the average issue price of common stock?
What is $20
500
During the current year a corporation has 6,000 shares of 15%, $45 par cumulative preferred stock outstanding and 10,000 shares of $2.50 par common stock outstanding. The company has a net income of $125,000 and paid all preferred dividends as usual. Compute earnings per share
What is $8.45
500
A corporation originally issued $5 par value stock for $8 per share. it purchased the stock for $10 per share for the treasury. What would the entry be to record the reissue of 15 shares of treasury stock for $12 per share?
What is debit cash 180, credit treasury stock 150 and credit paid in capital from treasury stock 30