Log in
Accounting
1
answer
0
watching
134
views

All of the following statements regarding stock dividends are trueexcept:
Directors can use stock dividends to keep the market price of thestock affordable.
Stock dividends provide evidence of management's confidence thatthe company is doing well.
Stock dividends do not reduce assets or equity.
Stock dividends decrease the number of shares outstanding.
Stock dividends transfer a portion of equity from retained earningsto contributed capital.

A stock dividend:
Is not a liability on the balance sheet.
Does not reduce a corporation's assets and stockholders'equity.
Transfers a portion of equity from retained earnings to contributedcapital.
Does not affect total equity, but does affect the components ofequity.
All of these.

Prior period adjustments are reported in the:
Multiple-step income statement.
Balance sheet.
Statement of retained earnings.
Statement of cash flows.
Single-step income statement.

The withdrawals account of each partner is:
Closed to that partner's capital account with a credit.
Closed to that partner's capital account with a debit.
A permanent account that is not closed.
Credited with that partner's share of net income.
Debited with that partner's share of net loss.

A bonus may be paid:
By a new partner when the current value of a partnership is greaterthan the recorded amounts of equity.
By a withdrawing partner to remaining partners if the recordedvalue of the equity is overstated.
To a new partner with exceptional talents.
By remaining partners to a withdrawing partner if the recordedequity is understated.
All of these.




Watch
1
answer
0
watching
134
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Elin Hessel
Elin HesselLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $676,400 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $519,800. Credit balances are indicated by parentheses.

Adams Clay
Current assets $ 422,000 $ 317,000
Investment in Clay 676,400 0
Equipment 697,800 470,000
Liabilities (259,000 ) (173,000 )
Common stock (350,000 ) (150,000 )
Retained earnings, 1/1/17 (1,187,200 ) (464,000 )

In 2017, Clay earns a net income of $78,900 and declares and pays a $5,000 cash dividend. In 2017, Adams reports net income from its own operations (exclusive of any income from Clay) of $162,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows:

Adams Clay
Revenues $ (546,000 ) $ (252,000 )
Expenses 395,850 189,000
Investment income Not given 0
Retained earnings, 1/1/18 Not given (537,900 )
Dividends declared 0 8,000
Common stock (350,000 ) (150,000 )
Current assets 785,000 379,700
Investment in Clay Not given 0
Equipment 591,800 521,600
Liabilities (204,700 ) (117,200 )

What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the:

Equity method.

Initial value method.

How does the parent’s internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement?

How does the parent’s internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated balance sheet?

What is Adams’s January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the:

Equity value method.

Initial value method.

What worksheet adjustment to Adams’s January 1, 2018, Retained Earnings account balance is required if Adams accounts for its investment in Clay using the initial value method?

Prepare the worksheet entry to eliminate Clay’s stockholders’ equity.

What is consolidated net income for 2018?

2.
A. Prepare a multiple-step income statement for the year endedDecember 31, 2016, concluding with earnings per share. In computingearnings per share, assume that the average number of common sharesoutstanding was 100,000 and preferred dividends were $100,000.(Round earnings per share to the nearest cent.)
• Refer to the Chart of Accounts for exact wording of accounttitles.
•

Refer to the Labels and Amount Descriptions for exact wording oftext entries.

B. Prepare a retained earnings statement for the year endedDecember 31, 2016.
• Refer to the Chart of Accounts for exact wording of accounttitles.
• Refer to the Labels and Amount Descriptions for exact wordingof text entries.
• You will need to enter the word “Less” or “Add” asnecessary.
C. Prepare a balance sheet in report form as of December 31, 2016.You are not required to present the details of Preferred and CommonStock (i.e., number of shares authorized, issued and outstanding).
• Refer to the Chart of Accounts for exact wording of accounttitles.
• Refer to the Labels and Amount Descriptions for exact wordingof text entries.
• “Less” , “Deduct”, “Add” and colons will appearautomatically.
• Available-for-sale investments should be reported as a singleasset on the balance sheet, regardless of how many accounts existin the ledger for such assets.
• Recall that current assets are to be reported in order ofliquidity. Available-for-sale investments are considered to be moreliquid that accounts receivable.
• Report fixed assets and paid-in capital accounts inaccount-number order.
• Omit the description of bonds and stocks (i.e., percentagerates, due date, number of shares, etc.)
• Enter all amounts as positive numbers, with one exception: Ifan unrealized loss has occurred, it must be reported as a negativeamount on the balance sheet.
Labels

In CengageNOW, a Label is a text entry that does not have anamount associated with it.
Current assets
Current liabilities
December 31, 2016
For the Year Ended December 31, 2016
Intangible assets
Investments
Less dividends
Long-term liabilities
Operating expenses
Other income and expenses
Paid-in capital
Add dividends
Property, plant, and equipment
Amount Descriptions

In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.
Available-for-sale investments
Decrease in retained earnings
Excess of issue price over par
Gross profit
Income before income tax
Income from operations
Increase in retained earnings
Miscellaneous selling expense
Net income
Net loss
Retained earnings, January 1, 2016
Retained earnings, December 31, 2016
Sales commissions
Sales salaries expense
Store supplies expense
Total administrative expenses
Total assets
Total (before treasury stock)
Total current assets
Total current liabilities
Total liabilities
Total liabilities and stockholders’ equity
Total long-term liabilities
Total investments
Total operating expenses
Total paid-in capital
Total property, plant, and equipment
Total selling expenses
Total stockholders’ equity
Unamortized premium

Unamortized discount

Income Statement data:
Advertising expense $ 150,000
Cost of merchandise sold 3,700,000
Delivery expense 30,000
Depreciation expense-office buildings and equipment 30,000
Depreciation expense-store buildings and equipment 100,000
Dividend revenue 4,500
Gain on sale of investments 4,980
Income from Pinkberry Co. investment 76,800
Income tax expense 140,500
Interest expense 21,000
Interest revenue 2,720
Miscellaneous administrative expense 7,500
Miscellaneous selling expense 14,000
Office rent expense 50,000
Office salaries expense 170,000
Office supplies expense 10,000
Sales 5,254,000
Sales commissions 185,000
Sales salaries expense 385,000
Store supplies expense 21,000

Retained earnings and balance sheet data:
Accounts payable $ 194,300
Accounts receivable 545,000
Accumulated depreciation—office buildings and equipment 1,580,000
Accumulated depreciation—store buildings and equipment 4,126,000
Allowance for doubtful accounts 8,450
Available-for-sale investments (at cost) 260,130
Bonds payable, 5%, due 2024 500,000
Cash 246,000
Common stock, $20 par
(400,000 shares authorized; 100,000 shares issued, 94,600outstanding) 2,000,000
Dividends:
Cash dividends for common stock 155,120
Cash dividends for preferred stock 100,000
Goodwill 500,000
Income tax payable 44,000
Interest receivable 1,125
Investment in Pinkberry Co. stock (equity method) 1,009,300
Investment in Dream Inc. bonds (long term) 90,000
Merchandise inventory (December 31, 2016),
at lower of cost (FIFO) or market 778,000
Office buildings and equipment 4,320,000
Paid-in capital from sale of treasury stock 13,000
Excess of issue price over par:
-Common 886,800
-Preferred 150,000
Preferred 5% stock, $80 par
(30,000 shares authorized; 20,000 shares issued) 1,600,000
Premium on bonds payable 19,000
Prepaid expenses 27,400
Retained earnings, January 1, 2016 9,319,725
Store buildings and equipment 12,560,000
Treasury stock
(5,400 shares of common stock at cost of $33 per share) 178,200
Unrealized gain (loss) on available-for-sale investments (6,500)
Valuation allowance for available-for-sale investments (6,500)

none

X

Chart of Accounts

CHART OF ACCOUNTS
Equinox Products Inc.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
122 Allowance for Doubtful Accounts
131 Merchandise Inventory
132 Interest Receivable
133 Prepaid Expenses
141 Investments-Solstice Corp.
142 Investment in Pinkberry Co. Stock
143 Investment in Dream Inc. Bonds
144 Valuation Allowance for Available-for-Sale Investments
181 Store Buildings and Equipment
182 Accumulated Depreciation-Store Buildings and Equipment
183 Office Buildings and Equipment
184 Accumulated Depreciation-Office Buildings and Equipment
191 Goodwill
LIABILITIES
211 Accounts Payable
221 Income Tax Payable
225 Cash Dividends Payable
251 Bonds Payable
252 Discount on Bonds Payable
253 Premium on Bonds Payable
EQUITY
311 Preferred Stock
312 Paid-in Capital in Excess of Par-Preferred Stock
321 Common Stock
322 Paid-in Capital in Excess of Par-Common Stock
331 Retained Earnings
341 Cash Dividends
351 Treasury Stock
352 Paid-in Capital from Sale of Treasury Stock
361 Unrealized Gain (Loss) on Available-for-Sale Investments
REVENUE
410 Sales
611 Dividend Revenue
621 Interest Revenue
631 Income from Pinkberry Co.
641 Gain on Sale of Investments
EXPENSES
511 Cost of Merchandise Sold
512 Bad Debt Expense
520 Sales Salaries Expense
521 Sales Commissions
522 Office Salaries Expense
531 Advertising Expense
532 Delivery Expense
537 Store Supplies Expense
538 Office Supplies Expense
539 Office Rent Expense
541 Income Tax Expense
551 Depreciation Expense-Store Equipment
552 Depreciation Expense-Office Equipment
591 Miscellaneous Selling Expense
592 Miscellaneous Administrative Expense
710 Interest Expense
731 Loss on Sale of Investments

none

X

Labels and Amount Descriptions

Labels

In CengageNOW, a Label is a text entry that does not have anamount associated with it.
Current assets
Current liabilities
December 31, 2016
For the Year Ended December 31, 2016
Intangible assets
Investments
Less dividends
Long-term liabilities
Operating expenses
Other income and expenses
Paid-in capital
Add dividends
Property, plant, and equipment
Amount Descriptions

In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.
Available-for-sale investments
Decrease in retained earnings
Excess of issue price over par
Gross profit
Income before income tax
Income from operations
Increase in retained earnings
Miscellaneous selling expense
Net income
Net loss
Retained earnings, January 1, 2016
Retained earnings, December 31, 2016
Sales commissions
Sales salaries expense
Store supplies expense
Total administrative expenses
Total assets
Total (before treasury stock)
Total current assets
Total current liabilities
Total liabilities
Total liabilities and stockholders’ equity
Total long-term liabilities
Total investments
Total operating expenses
Total paid-in capital
Total property, plant, and equipment
Total selling expenses
Total stockholders’ equity
Unamortized premium
Unamortized discount

XYZ Company - Balance Sheet As of12/31/2014

Assets

Current Assets

Cash

$ 50,000

Accounts Receivable

$ 35,000

Total Current Assets

$85,000

Long-term Investments

Investments in Hokie Co. - AFS

$25,000

Property Plant and Equipment

Printing Equipment

$100,000

less Accumulated Depreciation

$ (40,000)

$60,000

Building

$ 110,000

less Accumulated Depreciation

$ (3,667)

$106,333

Intangible Assets

Trademark

$10,000

Total Assets

$ 286,333

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts Payable

$115,000

Unearned Revenue

$45,000

Total Current Liabilities

$160,000

Total Liabilities

$ 160,000

Stockholder's Equity

Capital Stock:

Common Stock ($1 par value 10,000 shares issued)

$10,000

Additional Paid in Capital

$50,000

Total Paid in Capital

$ 60,000

Retained Earnings

$ 66,333

Total Stockholder's Equity

$126,333

Total Liabilities and Stockholder's Equity

$286,333

The Following Events Happened in 2015

1. On Jan. 1 XYZ Co. issued1000 shares of 6% $10 par preferred stock for $20,000.

2. XYZ Co. had $150,000 insales ($100,000 cash and $50,000 on account).

3. On Jan. 1 XYZ. paid$20,000 to rent a building for the next 12 months

4. XYZ purchased suppliesfor $10,000 on account

5. XYZ Co. collected $35,000in cash for settlement of outstanding accounts receivable

6. XYZ Co. provided servicesto earn all unearned revenue in 2015.

7. At the end of the yearonly $2000 of supplies remained

8. On 12-31 XYZ Companydeclared and paid preferred dividends

Other Information:

The Building has a useful life of 10 years and a salvage valueof 10,000. The company uses straight linedepreciation.

The Printing Equipment has a useful life of 10 years and asalvage value of 50,000. The company uses straight linedepreciation.

XYZ Co's Income Tax Rate is 30 percent and taxes will not bepaid until 2016.

1:What would XYZ Company report for revenue onthe 2015 Income Statement?

2:What would XYZ Company report for total operatingexpenses on the 2015 Income Statement?

3:What would XYZ Company report for Net Incomeon the 2015 Income Statement?

4: What would XYZ Company report for total currentassets on the 2015 Balance Sheet?

5: What would XYZ Company report for totalliabilities on the 2015 Balance Sheet?

6: What would XYZ Company report for additional paid incapital for preferred stock on the 2015 Balance Sheet?

7: What would XYZ Company report for total stockholders'equity on the 2015 Balance Sheet?

8: After closing entries, howdoes Event #2 affect stockholders' equity?

Event #2: XYZ Co. had $150,000 in sales ($100,000 cash and$50,000 on account).

9: After closing, how does Event #6 affect the BalanceSheet?

Event #6: Blazer Co. provided services to earn allunearned revenue in 2015.

10: After closing entries, how doesEvent #7 affect the Balance Sheet?

Event #7: At the end of the year only $2000 of suppliesremained

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in