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- 1. Unit Plan Template Unit Title________________________________________ Grade________ Day 1 Day 2 Day 3 Day 4 Day 5 Title of Lesson and Brief Summary Create a title for each lesson and 1-2 sentences summarizing the lesson, identifying the central focus based on the content and skills you are teaching. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. National/State Learning Standards List specific grade-level social studies and arts standards that are the focus of the lesson being presented. The same standards can be used for multiple days. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text.
- 2. Click here to enter text. Specific Learning Target(s)/Objectives Create at least one specific learning objective that is aligned to both selected standards. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Resources, Materials, Equipment, and Technology List all resources, materials, equipment, and technology you and the students will use in the unit, including collaborative technology. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Multiple Means of Representation Explain major concepts from social studies that will be included to promote elementary students’ abilities to make informed decisions as citizens of a culturally diverse democratic society and interdependent world. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Multiple Means of Engagement Explain learning activities, including how students will use collaborative technology in positive face-to-face and virtual local and global environments through applying effective interpersonal communication skills. Click here to enter text.
- 3. Click here to enter text. Click here to enter text.Does not Click here to enter text. Click here to enter text. Multiple Means of Expression Describe formative and summative assessments that the content, functions, and achievements of the performing and the visual arts as primary media for communication, inquiry, and engagement among elementary students. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Differentiation: Describe accommodations in assessments or testing conditions that meet the needs of students with disabilities or English language learners. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. © 2021. Grand Canyon University. All Rights Reserved. © 2018. Grand Canyon University. All Rights Reserved QUESTION 1 1. Retrievable documentation for every transaction and the basis for preparing financial statements are the two basic core elements of a proper __________.
- 4. accounting system database structure accounting equation contra account 1.25 points QUESTION 2 1. If you sell $3,000.00 worth of clothing at your boutique, in which account would you post this amount to reflect the transaction? Revenues Liabilities Equity Expenses 1.25 points QUESTION 3 1. The collection of all accounts in an accounting system is called the __________. general ledger
- 5. debit financial statement accounting equation 1.25 points QUESTION 4 1. When asset, expense, and dividend accounts have more debits than credits, they are said to have a normal debit balance. general ledger balance. normal credit balance. contra account balance. 1.25 points QUESTION 5 1. If you sell $250.00 worth of smoothies at your juice bar, in which account would you post this amount to reflect the transaction? Revenues Liabilities
- 6. Equity Expenses 1.25 points QUESTION 6 1. The is the overall process that leads to the capture and communication of essential accounting information. accounting cycle balance sheet general ledger general journal 1.25 points QUESTION 7 1. The numbering system called the is used by a business for account hierarchy. chart of accounts debit credit
- 7. accounting equation 1.25 points QUESTION 8 1. In the accounting cycle, the fourth step is __________. preparing the unadjusted trial balance posting general journal entries to the general ledger preparing an adjusted trial balance preparing financial statements 1.25 points QUESTION 9 1. You have just paid off an open credit card balance with cash and you would record the entry as a . debit to accounts payable, credit to cash credit to accounts payable, debit to cash debit to accounts payable, credit to sales debit to accounts payable, and debit to cash 1.25 points QUESTION 10 1. Which type of transaction is reflected on the right side of a t-
- 8. account? Credit accounts Debit accounts Chart of accounts General ledger accounts 1.25 points QUESTION 11 1. What is the third step of the accounting cycle? Posting general journal entries to the general ledger Preparing an unadjusted trial balance Preparing an adjusted trial balance Preparing financial statements 1.25 points QUESTION 12 1. The two basic core elements of a proper accounting system include retrievable documentation for every transaction and the basis for preparing what? Financial statements
- 9. Database structure Accounting equation Contra account 1.25 points QUESTION 13 1. Useful financial data for purposes of investment and business management comes from business transactions that have been analyzed and interpreted by accounting systems. source documents. a chart of accounts. a general ledger. 1.25 points QUESTION 14 1. What is the process of sorting data from the journal into the relevant general ledger accounts? Posting Transaction analysis
- 10. Adjusting entries Period closing 1.25 points QUESTION 15 1. If you wish to look at all transactions for a given period according to the posting date, which of the following items would be the best choice to consult? General journal General ledger Account ledger Journal account 1.25 points QUESTION 16 1. What is the name for the numbering system used by a business for account hierarchy? Chart of accounts Debit Credit
- 11. Accounting equation 1.25 points QUESTION 17 1. An entry that debits cash to increase the account is reflected on of the t-account. the left side the right side both sides neither side 1.25 points QUESTION 18 1. What is the name for the computerized accounting system component that serves as the basis for storing, indexing, and organizing data? Database structure General journal General ledger Source document
- 12. 1.25 points QUESTION 19 1. An accounting system is essential for recording the daily transactions of a business as part of the . accounting cycle balance sheet general ledger general journal 1.25 points QUESTION 20 1. Which of the following requires an understanding of how to increase or decrease an account using debits and credits? Transaction analysis Adjusting entry Trial balance Journal entry Part 2 QUESTION 1 1. In the accounting cycle, the ________ is prepared after the adjusting entries are posted.
- 13. recorded transactions general ledger source documents adjusted trial balance 2.5 points QUESTION 2 1. A _________ is an expense that is recorded before it is paid for. prepaid expense depreciation accrued expense revenue 2.5 points QUESTION 3 1. The two primary accounts in the journal that are impacted by accrued interest are . notes payable and accounts receivable
- 14. revenue and expenses revenue and accounts receivable cash and notes payable 2.5 points QUESTION 4 1. As you prepare payroll for the next pay period, the primary accounts impacted are cash and salaries expense. salaries payable and accounts receivable. cash and salaries payable. salaries payable and salaries expense. 2.5 points QUESTION 5 1. _________ is the prevailing income measurement model that is primarily driven by a transactions and events and uses past data that are viewed as objective and verifiable. The periodicity assumption Revenue recognition
- 15. The historical cost principle Depreciation 2.5 points QUESTION 6 1. Earned Interest that is yet to be paid to the holder of the note is __________. periodicity assumption accrued interest prepaid expense systematic allocation 2.5 points QUESTION 7 1. The expense recognition principle that explains the manner in which a large proportion of business costs are to be recorded is called the ___________. systematic allocation. immediate recognition. matching principle.
- 16. periodicity assumption. 2.5 points QUESTION 8 1. Which of the following accounts is used when you record a deposit for work that will not begin until next month? Cash Revenue Unearned revenue Prepaid expense 2.5 points QUESTION 9 1. The is used for costs that are not seen as benefiting any future periods and are not linked to any revenue production. periodicity assumption immediate recognition matching principle systematic allocation 2.5 points QUESTION 10
- 17. 1. _____________ is the process for recording the purchase of assets and then gradually transferring their cost to expense. Matching principle Immediate recognition Depreciation Prepaid expenses Part 3 QUESTION 1 1. When reviewing a worksheet, an accountant can quickly identify the balance of accounts, which are carried forward each period. dividend expense permanent temporary 5 points QUESTION 2 1. At the end of an accounting cycle, which of the following is the best indication that a company had a net income?
- 18. Moving a negative amount from temporary accounts to retained earnings Resetting all revenue, expense, and dividend accounts to a zero balance Experiencing a lower than anticipated rate of accumulated depreciation Transferring a positive amount from temporary accounts to retained earnings 5 points QUESTION 3 1. At the end of an accounting cycle, the accountant for Carson Manufacturing transfers $10,000 from the firm's temporary accounts to its retained earnings account. The accountant's action most likely suggests that Carson Manufacturing doubled its profitability. adjusted its trial balance. experienced a net income. experienced a net loss. 5 points QUESTION 4 1. The primary purpose of the closing process is to
- 19. post journal entries to the appropriate ledger accounts. transfer net income into temporary accounts. prepare for the start of the next accounting period. set permanent accounts back to a zero balance. 5 points QUESTION 5 1. A fiscal year reporting period is often based on what? Government requirements A firm's natural business cycle The natural calendar A firm's mission and vision part 4 QUESTION 1 1. Which method for recording uncollectible accounts receivable ensures that a bad debt expense is recorded in the same period as the initial credit sale? Direct write-off method
- 20. Allowance method Net realizable value method Contra asset method 5 points QUESTION 2 1. Rockwell Used Cars sells a truck to Marcus for $12,000 on October 1, 2015. Rockwell issues a 6-month note to Marcus at an interest rate of 5%. Which of the following belongs in the blank space of the following journal entry? 10-01-15 ________________________ 12,000 Sales 12,000 Interest Receivable Accounts Receivable Cash Notes Receivable 5 points
- 21. QUESTION 3 1. An accountant who uses an income statement approach to estimate the expected amount of bad debts is using the method: percentage of sales percentage of accounts receivable aging of accounts receivable direct write-off 5 points QUESTION 4 1. Which of the following represents amounts that customers owe to a business for purchasing goods or services from the business on credit? Accounts payable Interest charges Accounts receivable Operating expenses 5 points QUESTION 5 1. A customer for Dailey Enterprises had a $1,000 balance in his account that was deemed uncollectible and written off using
- 22. an allowance method. However, the customer has now contacted Dailey Enterprises and stated he will pay the $1,000 balance in the next 10 days. Which of the following phrases belongs in the journal entry? 3-1-X5 Accounts receivable 1,000 _______________ 1,000 Net Realizable Value Cash Accounts payable Allowance for Uncollectible Accounts Part 6 QUESTION 1 1. The future value of $1,000, assuming an interest rate of 5%, compounded yearly, for three years is $. (Your answer should be to two decimal places.) 5 points QUESTION 2 1. The present value of $2,000 invested at 6% interest, compounded yearly, for three years is ________.
- 23. $1,689.24 $1,679.24 $1,699.24 $1,669.24 5 points QUESTION 3 1. Arnold wishes to open a small business and has the opportunity to borrow $30,000 from his brother, Fred, at an interest rate of 2%.Though the money is available to him now, Arnold is not logistically ready to open the business for another year. What would be the advantage for Arnold to take the money now? There is no advantage. He will pay less interest. He could earn interest on the money in the meantime. 5 points QUESTION 4 1. Chad has borrowed $80,000 from the bank to open a second espresso cart. The interest rate is 7% and the loan term is one year. Once the repayment is completed, Chad will have repaid __________ to the bank. $136,000
- 24. $85,600 $74,400 $87,000 5 points QUESTION 5 1. The present value of an annuity that you make payments of $1,000 yearly for three years, has an interest rate of 5%, compounded yearly, is __________. $2,523.25 $2,823.25 $2,923.25 $2,723.25 Part 7 QUESTION 1 1. True or false. Unlike a merchandising business, a manufacturing business uses multiple inventory accounts to reflect the cost of raw materials, partially completed goods, and finished goods. TRUE
- 25. FALSE 2.5 points QUESTION 2 1. For a manufacturing business, the finished goods inventory account reflects the cost of what? Shipping Partially completed goods Completed goods Raw materials 2.5 points QUESTION 3 1. Super Goods, an electronics retailer, purchases $80,000 worth of computers from a manufacturer in Taiwan. The terms of the purchase are FOB shipping point. Freight costs total $9,000. The goods are shipped on June 1 and delivered on June 15. On June 1, which two accounts should be debited by Super Goods in the following journal entry? Date Account Dr. Cr. 6- 01-XX 80000.00 9000.00 Accounts Payable 89000.00 Inventory and Freight-out Accounts Receivable and Freight-out Inventory and Freight-in
- 26. Accounts Receivable and Freight-in 2.5 points QUESTION 4 1. At the time of shipment, goods that are purchased FOB shipping point are reported on the seller's balance sheet. considered the responsibility of the buyer. designated as freight-out. categorized as partially completed inventory. 2.5 points QUESTION 5 1. On February 15, a buyer purchases $30,000 worth of goods from a manufacturer. The manufacturer offers the buyer a 3% discount ($900) if payment for the goods is made within 10 days. The buyer pays for the merchandise on February 20. In a journal entry, the seller should debit ________ and credit ________ for $900. Sales; Purchase Discounts Accounts Receivable; Sales Sales; Accounts Receivable
- 27. Accounts Payable; Inventory 2.5 points QUESTION 6 1. A buyer receives a sales discount from a seller for paying for purchased goods within a specific period of time. In what way does the sales discount affects the buyer? Reducing freight-in costs Reducing the cost of inventory Increasing freight-out costs Increasing the cost of inventory 2.5 points QUESTION 7 1. For a manufacturing business, the __________ inventory account reflects the cost of products that have been manufactured and are ready to be sold. Raw materials Work-in-process Freight-in
- 28. Finished goods 2.5 points QUESTION 8 1. Which term refers to goods that a merchandising business purchases and resells? Inputs Frieght Supplies Inventory 2.5 points QUESTION 9 1. On February 15, a buyer purchases $10,000 worth of goods from a manufacturer, who spent $5,000 to manufacture the goods. The terms of sale are FOB shipping point, and shipping costs are $800. The goods will be shipped on June 1. The manufacturer must make two journal entries on June 1. In the second journal entry, the manufacturer should debit ________ and credit ________. Date Account Dr. Cr. 6-01-XX Accounts Receivable 10,000.00 Cash 800.00 Sales 10,000.00 Date Account Dr. Cr. 6-01-XX 5,000.00 5,000.00 Cash; Cost of Goods Sold Cost of Goods Sold; Inventory
- 29. Cost of Goods Sold; Cash Inventory; Cash 2.5 points QUESTION 10 1. Which statement about FOB shipping point is true? Goods are the buyer's property on the shipment date. The seller and buyer share all freight costs. Lost goods are the responsibility of the seller. The seller reports shipping costs as an expense. Part 8 QUESTION 1 1. Which inventory costing approach calculates a new cost per unit every time a purchase is made? Periodic LIFO FIFO Average cost 2.5 points
- 30. QUESTION 2 1. If a company that is facing rising prices wants to reduce the amount of its taxable income, which cost flow assumption should be used? average cost FIFO LIFO retail method 2.5 points QUESTION 3 1. Simply Shoes uses the FIFO system in conjunction with a perpetual inventory accounting system to track transactions that affect the store's shoe inventory. On August 1, 2015, the store had 50 pairs of shoes in inventory valued at $60 each. On August 8, the store bought 100 pairs of shoes at $65 each. Assuming the store has not sold any shoes, what was the ending inventory on August 9? $9,000 $9,500 $9,750
- 31. $9,450 2.5 points QUESTION 4 1. Super Sportz uses the FIFO system in conjunction with a perpetual inventory accounting system to track transactions that affect the store's inventory of sporting goods. On July 1, there were 100 basketballs in inventory, all valued at $5 each. On July 9, the store sold 30 basketballs for $15 each. The store's accountant made two journal entries for July 9. Which two did the accountant make? 7-9-xx Accounts Receivable 450.00 Sales 450.00 7-9-xx _________________ 150.00 _________________ 150.00 Debit to Inventory; credit to Cost of Goods Sold Debit to Cost of Goods Sold; credit to Inventory Debit to Sales; credit to Cost of Goods Sold
- 32. Debit to Accounts Payable; credit to Inventory 2.5 points QUESTION 5 1. Which of the following best explains the increasing use of perpetual inventory accounting systems? Changes in government regulations Demands of globalization Improvements in technology Increases in consumer awareness 2.5 points QUESTION 6 1. The selling price of every item offered by Dailey Department Store is marked up 5% over the actual cost of the merchandise. Given this information, Dailey Department Store can estimate its ending inventory balance using the method. lower-of-cost-or-market retail 2.5 points QUESTION 7 1. Tom's Tools uses the LIFO system and made the following purchases and sales in August. The cost of goods available for sale for Tom's Tools is
- 33. Date Purchases Sales Remaining Inventory Balance Aug 1 100 units @ $5 Aug 7 40 units @ $12 Aug 14 80 units @ $7 Aug 21 60 units @ $14 Aug 28 90 units @ $8 $1,320.00 $460.00 $1,780.00
- 34. $1,280.00 2.5 points QUESTION 8 1. DIY Hardware's inventory purchases Date Quantity Purchased Cost per Unit Total Cost Beginning Balance July 1 800 $2.00 $1,600 Purchase 2 July 15 600 $2.25 $1,350 Purchase 3 July 24 700 $2.10 $1,470 Cost of goods available for sale Operating expenses Accounts receivable
- 35. Cost of goods sold 2.5 points QUESTION 9 1. True or false. A firm's decision to use FIFO, LIFO, or average costing depends on its needs and preferences. However, all three methods typically result in the same values for ending inventory, cost of goods sold, gross margin, and net income. TRUE FALSE 2.5 points QUESTION 10 1. Which inventory costing method depends on a firm's markup being the same for all inventory items? FIFO LIFO Retail method Lower-of-cost-or-market method Part 9 QUESTION 1 1. On January 1, 2015, Madison Manufacturing purchased a piece of equipment that cost $600,000 and has a 10-year life. The Madison accountant, who uses the double-declining balance
- 36. depreciation method, needs to make a journal entry to indicate the machine’s depreciation in its second year. What amount should be debited and credited in the following entry? Date Account Dr. Cr. 12-31-16 Depreciation Expense Accumulated Depreciation $192,000 $96,000 $120,000 $60,000 5 points QUESTION 2 1. The units-of-activity method of depreciation relies on units of _________________ to determine an asset’s depreciation. time
- 37. use 5 points QUESTION 3 1. The accountant for Dawson Dairy uses the straight-line depreciation method. The business recently purchased a refrigerated truck for $180,000. The truck’s salvage value is $30,000, and has a service life of 6 years. What is the truck’s annual depreciation? $20,000 $30,000 $35,000 $25,000 5 points QUESTION 4 1. Top-Notch Construction purchased a bulldozer on January 1, 2012 for $120,000. The bulldozer has an estimated service life of 80,000 machine hours, and a salvage value of $20,000. The number of hours the bulldozer was used for the first 4 years is as follows: 8,000 hours in 2012; 9,000 hours in 2013; 7,000 hours in 2014; and 10,000 hours in 2015. The accountant for Top-Notch uses the units-of-activity method of depreciation. Which of the following is the correct journal entry for recording the depreciation for 2014? Date Account
- 38. Dr. Cr. 12-31-14 Accumulated Depreciation 8,750.00 Depreciation Expense 8,750.00 Date Account Dr. Cr. 12-31-14 Accumulated Depreciation 10,500.00 Depreciation Expense 10,500.00 Date Account Dr. Cr. 12-31-14 Depreciation Expense 10,500.00
- 39. Accumulated Depreciation 10,500.00 Date Account Dr. Cr. 12-31-14 Depreciation Expense 8,750.00 Accumulated Depreciation 8,750.00 5 points QUESTION 5 1. Which term refers to spreading the cost of an asset over the asset’s service life? Depreciation Adjusting Forecasting Transation
- 40. Part 10 QUESTION 1 1. The process of depletion applies to which of the following? Timber Patents Equipment Real estate 3.125 points QUESTION 2 1. On January 1, 2009, Dixon Enterprises purchased a delivery truck for $60,000 to be used for 10 years. The truck has no salvage value. On November 30, 2015, the company sold the truck for $20,000 in cash. The journal entry below records the truck's depreciation for 2015. Date Account Dr. Cr. 11-30-15 Depreciation Expense 5,500.00 Accumulated Depreciation 5,500.00
- 41. Which of the following journal entries correctly removes the asset and its accumulated depreciation account from the books? Date Account Dr. Cr. 11-30-15 Accumulated Depreciation 41,500.00 Loss 20,000.00 Equipment 60,000.00 Date Account Dr. Cr. 11-30-15 Equipment 60,000.00 Gain 1,500.00
- 43. Dr. Cr. 11-30-15 Accumulated Depreciation 41,500.00 Cash 20,000.00 Gain 1,500.00 Equipment 60,000.00 3.125 points QUESTION 3 1. In 2014, Medco Pharmaceuticals spent $1,000,000 on research and development (R&D). In 2015, Medco scientists developed a new medication as a result of the 2014 R&D findings. Given this information, Medco should have credited the R&D expenses in 2014. amortized the R&D expenses between 2014 and 2015. recorded R&D expenses in 2014.
- 44. recorded R&D expenses in 2015. 3.125 points QUESTION 4 1. Which term refers to allocating the cost of a natural resource to all accounting periods benefitting from its use? Amortization Depreciation Depletion Retirement 3.125 points QUESTION 5 1. The owner of Rosie's Flower Shop recently spent $300 to install a GPS navigation system in the shop's delivery truck, and spent $40 to replace the truck's oil. Which of the following statements about this situation is true? The oil change is a betterment, as well as a capital expenditure. The satellite is a betterment, as well as a revenue expenditure. The satellite is a betterment, as well as a capital expenditure. The oil change is a replacement outlay, as well as a capital expenditure.
- 45. 3.125 points QUESTION 6 1. In July 2015, the owner of Carlson Construction decides to retire a dump truck before the end of its service life because the truck is no longer reliable. The truck has no salvage value. The company's accountant needs to create two journal entries in this scenario. The first journal entry records depreciation for the first 7 months of the year. Which of the following explains the purpose of the second journal entry? Recording the revenue expenditures associated with the asset Removing the asset and its accumulated depreciation from the books Removing the asset from the books and recording its replacement cost Recording the gain on disposition at the time of retirement 3.125 points QUESTION 7 1. Sunshine Hamburgers, a fast-food chain, purchases the copyright to a song that the company plans to use in all of its commercials. Sunshine pays the songwriter $40,000 in cash for the copyright and expects to use the song for 4 years. Based on this information, which of the following statements is true? Depreciation Expense should be debited for $10,000, annually. The copyright purchase is reported as goodwill on the balance
- 46. sheet. Amortization Expense should be debited for $10,000, annually. The copyright is an intangible asset, so its costs are not amortized. 3.125 points QUESTION 8 1. DIY-Mart owns timber that it uses to make into the plywood and lumber sold in its stores. As the timber is processed into lumber, the DIY-Mart accountant needs to do which of the following to the cost of the timber? Depreciate it. Amortize it. Retire it. Deplete it. Part 11 QUESTION 1 1. On December 1, 2015, Winston Enterprises secured a loan from a bank for $300,000 to purchase manufacturing equipment. The loan will be repaid in 5 years with payments due every month and an interest rate of 4%. What will be the interest expense for the first payment on January 1, 2016? $500
- 47. $1,000 $300 $1,200 2.5 points QUESTION 2 1. Which type of bond gives the corporation the right to redeem the bond before the maturity date? Serial bond Callable bond Term bond Convertible bond 2.5 points QUESTION 3 1. On November 1, Carlson Flooring purchased copy paper and printer ink in the amount of $500 from Office Mart. The purchase was made on account. On November 20, Carlson's accountant paid the full amount of the invoice using a company check. Which journal entry correctly records the invoice payment?
- 48. DR CR 11/1/2015 Office Supplies 500.00 Accounts Payable 500.00 DR CR 11/20/2015 Accounts Payable 500.00 Cash 500.00 DR CR 11/20/2015 Accounts Payable 500.00
- 49. Office Supplies 500.00 DR CR 11/1/2015 Office Supplies 500.00 Cash 500.00 2.5 points QUESTION 4 1. True or false. When a business borrows a large sum of money from a bank, a notes payable serves as the contractual agreement between the two parties. TRUE FALSE 2.5 points QUESTION 5 1. Collins Clothing Company has an operating cycle of 90 days. How much time does Collins have to repay its current
- 50. liabilities? 2 years 1 year 90 days 6 months 2.5 points QUESTION 6 1. The board of directors at Cameron Industries recently approved the firm's first bond issue. On November 1, 2015, the company issued $20 million in bonds with a 2% interest rate, payable annually, and at a market interest rate of 2%. The bonds will mature in 10 years. Which is recorded in the journal entry shown below? DR CR 11/1/2025 Bonds Payable 20,000.00 Cash 20,000.00 Repaying a bond issued at face value
- 51. Repaying a bond at a discount Issuing a bond at face value Paying interest on a bond issued at face value 2.5 points QUESTION 7 1. The board of directors at Cameron Industries recently approved the firm's first bond issue. On November 1, 2015, the company issued $20 million in bonds with a 2% interest rate, payable annually, and at a market interest rate of 2%. The bonds will mature in 10 years. Which correctly records the bonds being issued? DR CR 11/1/2025 Cash 20,400,000 Bonds Payable 20,000,000 Premium on Bonds Payable 400,000
- 52. DR CR 11/1/2025 Cash 20,000,000 Bonds Payable 20,000,000 DR CR 11/1/2025 Cash 20,000,000 Discount on Bond Payable 400,000 Bonds Payable 20,400,000
- 53. DR CR 11/1/2025 Bonds Payable 20,000,000 Cash 20,000,000 2.5 points QUESTION 8 1. Wilson Industries needs to raise capital to pay for costly new production equipment, so the firm obtains a 20-year bank loan at an interest rate of 5%. Which statement about this situation is most likely true? Interest payments will be considered tax-deductible expenses. The loan will be considered a current liability because of the interest fees. If the loan is repaid before the due date, no interest will be charged.
- 54. If the loan is repaid in a lump sum, no interest will be charged. 2.5 points QUESTION 9 1. Collins Clothing Company manufactures men's apparel and conducts all business on credit. Which item, when purchased, is considered a current liability for Collins? Land to build a new facility Fabric to make shirts Trucks to deliver clothes to retailers Buildings to store inventory 2.5 points QUESTION 10 1. How does a company benefit from issuing callable bonds? Retiring and reissuing bonds when interest rates drop Delaying the lump sum repayment of bonds Repaying bonds in increments when interest rates are low Issuing bonds without any collateral Part 12 QUESTION 1 1. True or false. Davidson Corporation has 1,000,000 shares of
- 55. $10 par value common stock issued and outstanding. The market price of the stock is $25 per share. On March 1, 2016, the company's board of directors declared a 5% stock dividend. The value of the stock dividend on the declaration date would be $500,000. TRUE FALSE 2.5 points QUESTION 2 1. True or false. On November 12, 2016, Barber Corporation issued 100,000 shares of its $2 par value common stock for $20 per share. The journal entry to record this transaction is: TRUE FALSE 2.5 points QUESTION 3 1. Which statement about preferred shareholders/stock is true? Preferred shareholders are not guaranteed a return on their investment in the form of cash dividends. Preferred stock cannot be converted to common stock. In the event the corporation goes out of business (liquidates), common shareholders will be paid any unpaid dividends (in
- 56. arrears), plus the value of their stock holdings before preferred shareholders. Preferred shareholders do not have voting rights. 2.5 points QUESTION 4 1. On November 12, 2016, Barber Corporation issued 100,000 shares of its $2 par value common stock for $20 per share. Part of the journal entry to record this transaction would be a __________ to Paid-in Capital in Excess of Par for $1,800,000. credit debit 2.5 points QUESTION 5 1. What is a disadvantage to issuing stock instead of bonds? The payment of cash dividends is not a tax deductible expense. A corporation is required to pay cash dividends. The company must buy back its stock. Payment of dividends reduces the company's net income and profitability. 2.5 points QUESTION 6 1. True or false. Each share of common stock entitles the owner
- 57. to own a proportionate share of the company. TRUE FALSE 2.5 points QUESTION 7 1. Babel Corporation has 2,000,000 shares of $10 par value common stock issued and outstanding. The market price of the stock was $100 per share. Suppose the company decided to declare a 4-for-1 stock split. What is the market price of the shares after the stock split? $25 $2.50 $50 $5.00 2.5 points QUESTION 8 1. True or false. A key advantage of stock financing over bond financing is that there is no repayment. TRUE FALSE
- 58. 2.5 points QUESTION 9 1. On June 15, 2016, Fabin Corporation purchased 15,000 shares of its common stock for $50 per share for its treasury. On December 1, 2016, the company sold 5,000 of its treasury shares for $40 per share. Part of the journal entry to record the sale of the treasury stock on December 1, 2016 would be a __________ to Retained Earnings for $50,000. debit credit 2.5 points QUESTION 10 1. Davidson Corporation has 1,000,000 shares of $10 par value common stock issued and outstanding. The market price of the stock is $25 per share. On March 1, 2016, the company's board of directors declared a 5% stock dividend. The value of the stock dividend on the declaration date would be: $25,000,000 $50,000 $500,000 $1,250,000 image3.wmf