1) On January 4, Year 1, Barber Company purchased 7,500 shares of Convell Compan
ID: 2438466 • Letter: 1
Question
1) On January 4, Year 1, Barber Company purchased 7,500 shares of Convell Company for $84,500 plus a broker's fee of $1,500. Convell Company has a total of 37,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.85 per share, and its net income was $97,000 and $92,000 for Year 1 and Year 2, respectively. What is the book value of Barber's investment in Convell at the end of Year 2?
A) $111,050.
B) $86,000.
C) $122,800.
D) $73,250.
E) $123,800.
2) The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
The amount of cash dividends paid during the year would be:
A) $253,000.
B) $179,000.
C) $46,000.
D) $258,500.
E) $281,000.
3) On February 15, Jewel Company buys 6,500 shares of Marcelo Corp. common stock at $28.68 per share plus a brokerage fee of $475. The stock is classified as long-term available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On March 15, Marcelo declares a dividend of $1.30 per share payable to stockholders of record on April 15. Jewel received the dividend on April 15 and ultimately sells half of the Marcelo stock on November 17 of the current year for $29.45 per share less a brokerage fee of $325. The journal entry to record the purchase on February 15 is:
A) Debit Long-Term Investments-AFS $186,420; credit Cash $186,420.
B) Debit Long-Term Investments-Trading $186,895; credit Cash $186,895.
C) Debit Long-Term Investments-HTM $191,425; credit cash $191,425.
D )Debit Long-Term Investments-AFS $186,895; credit Cash $186,895.
E) Debit Long-Term Investments-Trading $186,420; credit Cash $186,420.
4) Jeffreys Company reports depreciation expense of $58,000 for Year 2. Also, equipment costing $194,000 was sold for a $11,800 loss in Year 2. The following selected information is available for Jeffreys Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.
A) $57,800.
B) $34,200.
C) $78,200.
D) $46,000.
E) $58,000.
5) Use the following information to compute the cost of goods manufactured. Assume that all raw materials used were traceable to specific units of product.
A) $35,750.
B) $35,150.
C) $36,650.
D) $36,350.
E) $42,650.
6) Memphis Company anticipates total sales for April, May, and June of $830,000, $930,000, and $980,000 respectively. Cash sales are normally 30% of total sales. Of the credit sales, 30% are collected in the same month as the sale, 65% are collected during the first month after the sale, and the remaining 5% are collected in the second month. Compute the amount of accounts receivable reported on the company’s budgeted balance sheet for June 30.
$480,200.
$543,900.
$512,750.
$851,950.
$922,950.
7) Landmark Corp. buys $400,000 of Schroeter Company's 7%, 5-year bonds payable at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the 5-year life. When the bonds mature, the journal entry to record the proceeds will be:
A) Debit Cash $400,000; credit Interest Receivable $400,000.
B) Debit Cash $400,000; credit Long-Term Investments-HTM $400,000.
C) Debit Cash $400,000; credit Interest Revenue $400,000.
D) Debit Cash $400,000; credit Bonds Payable $400,000.
E) Debit Long-Term Investments-HTM $400,000; credit Cash $400,000.
Retained earnings balance at the beginning of the year $ 128,500 Cash dividends declared for the year 48,500 Proceeds from the sale of equipment 83,500 Gain on the sale of equipment 7,500 Cash dividends payable at the beginning of the year 20,500 Cash dividends payable at the end of the year 23,000 Net income for the year 94,500Explanation / Answer
1) On Jan 4 84,500 Add:Brokers fees 1,500 total cost of investment 86,000 less:Dividends paid (7500*.85*2) -12750 Add:net income (97000+92000)*7500/37500 37800 book value of investment at end of year 2 111,050 Answer) option A $111,050 2) Cash payable at the beginning of the year 20,500 Add:Cash dividends declared for the year 48,500 total 69,000 less:Cash dividend payable at the end of the year -23,000 cash dividends paid 46,000 Answer option C $46,000 3) cost (6500*28.68+475) 186895 Answer option D Debit Long term investments -AFS $186,895;credit cash $186,895 4) cash received from sales let depreciation expense on sold equipment be x 590,000 - x +58000 = 500,000 x = 590,000+58000-500,000 x= 148000 cost of equipment 194,000 less Accumulated depreciation -148000 Book value 46,000 less:loss on sale -11,800 Cash received on sale 34,200 answer option B $34,200 5) Beginning raw materials 6,700 add purchases 8,600 less ending raw materials -5,200 Raw materials consumed 10,100 Add: direct labor 13,450 add manufacturing overhead depreciation on factory equipment 7,700 Factory repairs and maintenance 4,500 12,200 total manufacturing cost 35,750 Add:Beginning work in process 6,900 less ending work in process -7,500 cost of goods manufactured 35,150 Answer option B $35,150 6) Account receivable for June 30 May (930,000*70%*5%)= 32550 June (980,000*70%*70%)= 480200 Account receivable for June 30 512750 answer $512,750 7) answer) option B Debit cash$400,000;credit long term investments -HTM $400,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.