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Homework answers / question archive / Bakersfield College ACG 2021 1)The changes in account balances for Allen Inc

Bakersfield College ACG 2021 1)The changes in account balances for Allen Inc

Accounting

Bakersfield College

ACG 2021

1)The changes in account balances for Allen Inc. for 2016 are as follows:

 

Assets                                                                     $225,000 debit

Common stock                                                     125,000 credit

Liabilities                                                                   80,000 credit

Paid-in capital—excess of par                          15,000 credit

 

Assuming the only changes in retained earnings in 2016 were for net income and a $25,000 dividend, what was net income for 2016?

a.     $30,000.

b.     $20,000.

c.     $15,000.

d.     $ 5,000.

 

 

 

Use the following to answer questions :

 

As of December 31, 2016, Warner Corporation reported the following:

 

Dividends payable

20,000

Treasury stock

600,000

Paid-in capital – share repurchase

20,000

Other paid-in capital accounts

4,000,000

Retained earnings

3,000,000

During 2017, half of the treasury stock was resold for $240,000; net income was $600,000; cash dividends declared were $1,500,000; and stock dividends declared were $500,000.

 

  1. What was shareholders' equity as of December 31, 2016? a.        $7,020,000.

b.     $6,440,000.

c.     $6,420,000.

 

d.     $6,400,000.

 

 

 

  1. What would shareholders' equity be as of December 31, 2017?
    1. Amount is not shown.

b.     $5,760,000.

c.     $5,820,000.

d.     $6,760,000.

 

 

 

 

 

  1. The 2017 sale of half of the treasury stock would:
    1. Reduce income before tax by $60,000.
    2. Reduce retained earnings by $60,000.
    3. Increase total shareholders' equity by $300,000.
    4. Reduce retained earnings by $40,000.

 

 

During 2017 ($ in 000s), net income was $9,000; 25% of the treasury stock was resold for $450; cash dividends declared were $600; cash dividends paid were $500.

 

  1. What ($ in 000s) was shareholders' equity as of December 31, 2016? a.         $29,600.

b.     $35,600.

c.     $30,400.

d.     $28,600.

 

 

 

 

 

  1. What ($ in 000s) was shareholders' equity as of December 31, 2017? a.         $38,100.

b.     $37,450.

c.     $38,450.

d.     $38,350.

 

 

 

  1. Accumulated other comprehensive income:
    1. is a liability.
    2. might include prior service cost from pension plan amendments.
    3. includes accumulated pension expense.
    4. is reported in the income statement.

 

 

 

 

 

  1. A statement of comprehensive income does not include:
    1. Net income.
    2. Losses resulting from the return on pension assets exceeding expectations.
    3. Losses from changes in estimates regarding the PBO.
    4. Prior service cost.

 

 

 

 

  1. Accumulated other comprehensive income is reported:
    1. In the balance sheet as an asset.
    2. In the balance sheet as a liability.
    3. In the balance sheet as a component of shareholders’ equity.
    4. In the statement of comprehensive income.

 

 

 

 

  1. A statement of comprehensive income does not include:
    1. Gains resulting from the return on assets exceeding expectations.
    2. Gains and losses on unsold held-to-maturity securities.
    3. Losses resulting from the return on pension assets falling short of expectations.
    4. Prior service cost.

 

 

 

 

  1. Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following except:
    1. Ease of raising capital.
    2. Low government regulation.

 

    1. Limited liability.
    2. Ease of ownership transfer.

 

 

 

 

  1. The preemptive right refers to the shareholder's right to:
    1. Maintain a proportional ownership interest in the corporation.
    2. Vote for members of the board of directors.
    3. Receive a share of dividends.
    4. Share in profits proportionally with all other stockholders.

 

 

 

 

  1. Common shareholders usually have all of the following rights except:
    1. To share in the profits.
    2. To share in assets upon liquidation.
    3. To elect a board of directors.
    4. To participate in the day-to-day operations.

 

 

 

 

  1. The par value of shares issued is normally recorded in the:
    1. Paid-in capital in excess of par account.
    2. Common stock account.
    3. Retained earnings account.
    4. Appropriated retained earnings account.

 

 

 

 

  1. Authorized common stock refers to the total number of shares:
    1. Outstanding.
    2. Issued.
    3. Issued and outstanding.
    4. That can be issued.

 

 

 

 

  1. The par value of common stock represents:
    1. The arbitrary dollar amount assigned to a share of stock.
    2. The liquidation value of a share.
    3. The book value of a share of stock.
    4. The amount received when the stock was issued.

 

 

 

 

  1. When stock traded on an active exchange is issued for a machine:
    1. No entry is recorded until restrictions are lifted.
    2. An asset is recorded for the fair value of the stock.
    3. An asset is recorded for the appraised value of the machine.
    4. Paid-in capital is increased by the appraised value of the machine.

 

 

 

  1. Paid-in capital in excess of par is reported:
    1. As a reduction of shareholders' equity.
    2. As a noncurrent asset.
    3. As a noncurrent liability.
    4. As an increase in shareholders' equity.

 

 

 

 

  1. Share issue costs refer to the costs of obtaining the legal, promotional, and accounting services necessary to effect the sale of shares. The costs reduce the net cash proceeds from selling the shares and thus paid-in capital—excess of par, and are:
    1. Not recorded separately.
    2. Recorded as an asset.
    3. Recorded as a liability.
    4. Amortized over time.

 

 

 

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