Strayer university acc 304 final exam part 1 (3 sets) new

Strayer University ACC 304 Final Exam Part 1
(3 Sets) NEW
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ACC 304 Final Exam Part 1 (3 Sets) 1
1) Swing High Inc. offers its 100 employees to
participate in an employee share-purchase
plan. Under the terms of plan, employees are
entitled to purchase 10 shares at 10%
discount. The par values of shares were $10.
Overall, 60 employees accepted the offer and
each employee purchased six shares. The
market price on purchase date was $100.

What is the compensation expense recorded
by Swing High Inc.?
2) The interest rate written in the terms of the
bond indenture is known as the
3) Which of the following methods of
amortization is normally used for intangible
assets?
4) If bonds are initially sold at a discount and
the straight-line method of amortization is
used, interest expense in the earlier years will
5) The distribution of stock rights to existing
common stockholders will increase paid-in
capital at the
6) Treasury shares are shares
7) Which of the following is a contract-related
intangible assets?

8) Which of the following taxes does not
represent a common employee payroll
deduction?
9) On January 1, 2014, Ellison Co. issued eight-
year bonds with a face value of $4,000,000
and a stated interest rate of 6%, payable
semiannually on June 30 and December 31.
The bonds were sold to yield 8%. Table values
are:
Present value of 1 for 8 periods at
6% .627
8% .540
3% .623
4% .534
Present value of annuity for 8 periods at
6% 6.210
8% 5.747
3% 12.561

4% 11.652
The present value of the interest is
10) Which of the following would be
considered research and development costs?
11) On January 1, 2015, Evans Company
granted Tim Telfer, an employee, an option to
buy 3,000 shares of Evans Co. stock for $25
per share, the option exercisable for 5 years
from date of grant. Using a fair value option
pricing model, total compensation expense is
determined to be $22,500. Telfer exercised
his option on September 1, 2015, and sold his
1,000 shares on December 1, 2015. Quoted
market prices of Evans Co. stock during 2015
were
January 1 $25 per share
September 1 $30 per share
December 1 $34 per share
The service period is for three years
beginning January 1, 2015. As a result of the

option granted to Telfer, using the fair value
method, Evans should recognize
compensation expense for 2015 on its books
in the amount of
12) Presented below is information related to
Hale Corporation:
Common Stock, $1 par $4,500,000
Paid-in Capital in Excess of Par―Common
Stock 550,000
Preferred 8 1/2% Stock, $50 par 2,000,000
Paid-in Capital in Excess of Par―Preferred
Stock 400,000
Retained Earnings 1,500,000
Treasury Common Stock (at cost) 150,000
The total paid-in capital (cash collected)
related to the common stock is
13) On October 1, 2014 Macklin Corporation
issued 5%, 10-year bonds with a face value of
$4,000,000 at 104. Interest is paid on October
1 and April 1, with any premiums or discounts
amortized on a straight-line basis.

Bond interest expense reported on the
December 31, 2014 income statement of
Macklin Corporation would be
14) Gannon Company acquired 10,000 shares
of its own common stock at $20 per share on
February 5, 2014, and sold 5,000 of these
shares at $27 per share on August 9, 2015.
The fair value of Gannon's common stock was
$24 per share at December 31, 2014, and $25
per share at December 31, 2015. The cost
method is used to record treasury stock
transactions. What account(s) should Gannon
credit in 2015 to record the sale of 5,000
shares?
15) When computing diluted earnings per
share, convertible bonds are
16) Jeff Corporation purchased a limited-life
intangible asset for $225,000 on May 1, 2013.
It has a useful life of 10 years. What total
amount of amortization expense should have
been recorded on the intangible asset by
December 31, 2015?

17) A corporation called an outstanding bond
obligation four years before maturity. At that
time there was an unamortized discount of
$750,000. To extinguish this debt, the
company had to pay a call premium of
$250,000. Ignoring income tax considerations,
how should these amounts be treated for
accounting purposes?
18) Slack Inc. borrowed $320,000 on April 1.
The note requires interest at 12% and
principal to be paid in one year. How much
interest is recognized for the period from
April 1 to December 31?
19) Venible newspapers sold 6,000 of annual
subscriptions at $125 each on June 1. How
much unearned revenue will exist as of
December 31?
20) Hanson Co. had 200,000 shares of
common stock, 20,000 shares of convertible
preferred stock, and $1,000,000 of 5%
convertible bonds outstanding during 2015.
The preferred stock is convertible into 40,000

shares of common stock. During 2015, Hanson
paid dividends of $.60 per share on the
common stock and $2 per share on the
preferred stock. Each $1,000 bond is
convertible into 45 shares of common stock.
The net income for 2015 was $400,000 and
the income tax rate was 30%.
Basic earnings per share for 2015 is (rounded
to the nearest penny)
21) Sealy Corporation had the following
information in its financial statements for the
years ended 2014 and 2015:
Cash dividends for the year 2015 $5,000
Net income for the year ended 2015 87,000
Market price of stock, 12/31/14 10
Common stockholders' equity, 12/31/14
1,000,000
1,200,000
Outstanding shares, 12/31/15 100,000
Preferred dividends for the year ended 2015
10,000

What is the payout ratio for Sealy Corporation
for the year ended 2015?
22) Jenks Corporation acquired Linebrink
Products on January 1, 2015 for $8,000,000,
and recorded goodwill of $1,500,000 as a
result of that purchase. At December 31, 2015,
Linebrink Products had a fair value of
$6,800,000. The net identifiable assets of the
Linebrink (excluding goodwill) had a fair
value of $5,800,000 at that time. What amount
of loss on impairment of goodwill should
Jenks record in 2015?
23) On December 31, 2014, the stockholders'
equity section of Arndt, Inc., was as follows:
Common stock, par value $10; authorized
30,000 shares;
issued and outstanding 9,000 shares $90,000
Additional paid-in capital 116,000
Retained earnings 184,000
Total stockholders' equity $390,000

On March 31, 2015, Arndt declared a 10%
stock dividend, and accordingly 900
additional shares were issued, when the fair
value of the stock was $18 per share. For the
three months ended March 31, 2015, Arndt
sustained a net loss of $32,000. The balance of
Arndt’s retained earnings as of March 31,
2015, should be
24) On September 1, 2014, Halley Co. issued a
note payable to Fidelity Bank in the amount of
$1,800,000, bearing interest at 10%, and
payable in three equal annual principal
payments of $600,000. On this date, the
bank's prime rate was 11%. The first payment
for interest and principal was made on
September 1, 2015. At December 31, 2015,
Halley should record accrued interest payable
of
ACC 304 Final Exam Part 1 (3 Sets) 2
1) We have also attached download of Chapter
12, 13, 14, 15, 16 (download it from my
account section)

Please use those as well for your finals and
please either use the question number or
some data from question to search as they
usually change the company keeping the data
same
2) Convertible bonds
3) Litke Corporation issued at a premium of
$5,000 a $100,000 bond issue convertible into
2,000 shares of common stock (par value
$20). At the time of the conversion, the
unamortized premium is $2,000, the market
value of the bonds is $110,000, and the stock
is quoted on the market at $60 per share. If
the bonds are converted into common, what is
the amount of paid-in capital in excess of par
to be recorded on the conversion of the
bonds?
4) Didde Co. had 300,000 shares of common
stock issued and outstanding at December 31,
2014. No common stock was issued during
2015. On January 1, 2015, Didde issued
200,000 shares of nonconvertible preferred

stock. During 2015, Didde declared and paid
$75,000 cash dividends on the common stock
and $60,000 on the preferred stock. Net
income for the year ended December 31, 2015
was $465,000. What should be Didde's 2015
earnings per common share?
5) Weiser Corp. on January 1, 2012, granted
stock options for 40,000 shares of its $10 par
value common stock to its key employees. The
market price of the common stock on that
date was $23 per share and the option price
was $20. The Black-Scholes option pricing
model determines total compensation
expense to be $420,000. The options are
exercisable beginning January 1, 2015,
provided those key employees are still in
Weiser’s employ at the time the options are
exercised. The options expire on January 1,
2016.
On January 1, 2015, when the market price of
the stock was $29 per share, all 40,000
options were exercised. The amount of

compensation expense Weiser should record
for 2015 under the fair value method is
6) Carr Corporation retires its $300,000 face
value bonds at 105 on January 1, following the
payment of interest. The carrying value of the
bonds at the redemption date is $311,235.
The entry to record the redemption will
include a
The entry to record the issuance of the bonds
would include a credit of
8) Farmer Company issues $25,000,000 of 10-
year, 9% bonds on March 1, 2014 at 97 plus
accrued interest. The bonds are dated January
1, 2014, and pay interest on June 30 and
December 31. What is the total cash received
on the issue date?

9) On its December 31, 2014 balance sheet,
Emig Corp. reported bonds payable of
$3,000,000 and related unamortized bond
issue costs of $160,000. The bonds had been
issued at par. On January 2, 2015, Emig
retired $1,500,000 of the outstanding bonds
at par plus a call premium of $35,000. What
amount should Emig report in its 2015
income statement as loss on extinguishment
of debt (ignore taxes)?
10) Feller Company issues $15,000,000 of 10-
year, 9% bonds on March 1, 2014 at 97 plus
accrued interest. The bonds are dated January
1, 2014, and pay interest on June 30 and
December 31. What is the total cash received
on the issue date?
11) Where is debt callable by the creditor
reported on the debtor's financial statements?
12) Sawyer Company self-insures its property
for fire and storm damage. If the company
were to obtain insurance on the property, it

would cost them $1,500,000 per year. The
company estimates that on average it will
incur losses of $1,200,000 per year. During
2014, $525,000 worth of losses were
sustained. How much total expense and/or
loss should be recognized by Sawyer Company
for 2014?
13) A liability for compensated absences such
as vacations, for which it is expected that
employees will be paid, should
14) On September 1, Horton purchased
$13,300 of inventory items on credit with the
terms 1/15, net 30, FOB destination. Freight
charges were $280. Payment for the purchase
was made on September 18. Assuming Horton
uses the perpetual inventory system and the
net method of accounting for purchase
discounts, what amount is recorded as
inventory from this purchase?
15) What is a discount as it relates to zero-
interest-bearing notes payable?

16) Which of the following legal fees should
be capitalized?
17) Which of the following costs of goodwill
should be amortized over their estimated
useful lives?
18) MaBelle Corporation incurred the
following costs in 2015:
Acquisition of R&D equipment with a useful
life of 4 years in R&D projects $800,000
Start-up costs incurred when opening a new
plant 140,000
Advertising expense to introduce a new
product 700,000
Engineering costs incurred to advance a
product to full production stage 500,000
What amount should MaBelle record as
research & development expense in 2015?
19) Jenks Corporation acquired Linebrink
Products on January 1, 2015 for $8,000,000,
and recorded goodwill of $1,500,000 as a
result of that purchase. At December 31, 2015,
Linebrink Products had a fair value of

$6,800,000. The net identifiable assets of the
Linebrink (excluding goodwill) had a fair
value of $5,800,000 at that time. What amount
of loss on impairment of goodwill should
Jenks record in 2015?
20) The general ledger of Vance Corporation
as of December 31, 2015, includes the
following accounts:
Copyrights $30,000
Deposits with advertising agency (will be used
to promote goodwill) 27,000
Discount on bonds payable 70,000
Excess of cost over fair value of identifiable
net assets of Acquired subsidiary 480,000
Trademarks 90,000
In the preparation of Vance's balance sheet as
of December 31, 2015, what should be
reported as total intangible assets?
21) Sealy Corporation had the following

1,000,000
1,200,000
10,000
What is the rate of return on common stock
equity for Sealy Corporation for the year
ended 2015?
22) An entry is not made on the
23) The issuer of a 5% common stock
dividend to common stockholders should
transfer from retained earnings to paid-in
capital an amount equal to the
24) Layne Corporation had the following

1,600,000
1,980,000
15,000
What is the book value per share for Layne
Corporation for the year ended 2015?
25) The pre-emptive right of a common
stockholder is the right to
ACC 304 Final Exam Part 1 (3 Sets)
1) Swing High Inc. offers its 100 employees to
participate in an employee share-purchase
plan. Under the terms of plan, employees are
entitled to purchase 10 shares at 10%
discount. The par values of shares were $10.
Overall, 60 employees accepted the offer and

each employee purchased six shares. The
market price on purchase date was $100.
2) Didde Co. had 300,000 shares of common
stock issued and outstanding at December 31,
2014. No common stock was issued during
2015. On January 1, 2015, Didde issued
200,000 shares of nonconvertible preferred
stock. During 2015, Didde declared and paid
$75,000 cash dividends on the common stock
and $60,000 on the preferred stock. Net
income for the year ended December 31, 2015
was $465,000. What should be Didde's 2015
earnings per common share?
3) When convertible debt is retired by the
issuer, any material difference between the
cash acquisition price and the carrying
amount of the debt should be
4) On July 1, 2014, an interest payment date,
$90,000 of Parks Co. bonds were converted
into 1,800 shares of Parks Co. common stock
each having a par value of $45 and a market
value of $54. There is $3,600 unamortized

discount on the bonds. Using the book value
method, Parks would record
5) Convertible bonds
6) Paige Co. took advantage of market
conditions to refund debt. This was the fourth
refunding operation carried out by Paige
within the last three years. The excess of the
carrying amount of the old debt over the
amount paid to extinguish it should be
reported as a
7) Under the effective-interest method of
bond discount or premium amortization, the
periodic interest expense is equal to
8) When a business enterprise enters into
what is referred to as off-balance-sheet
financing, the company
9) When the interest payment dates of a bond
are May 1 and November 1, and a bond issue
is sold on June 1, the amount of cash received
by the issuer will be

11) Which of the following taxes does not
represent a common employee payroll
deduction?
12) Which of the following is an example of a
contingent liability?
13) Sawyer Company self-insures its property
for fire and storm damage. If the company
were to obtain insurance on the property, it
would cost them $1,500,000 per year. The
company estimates that on average it will
incur losses of $1,200,000 per year. During
2014, $525,000 worth of losses were
sustained. How much total expense and/or
loss should be recognized by Sawyer Company
for 2014?

14) Greeson Corp. signed a three-month, zero-
interest-bearing note on November 1, 2014
for the purchase of $250,000 of inventory. The
face value of the note was $253,900. Greeson
used a "Discount on Note Payable" account to
initially record the note. Assuming that the
discount will be amortized equally over the 3-
month period and that there was no adjusting
entry made for November, the adjusting entry
made at December 31, 2012 will include a
15) Presented below is information available
for Marley Company.
Current Assets
Cash $ 4,000
Short-term investments 65,000
Accounts receivable 61,000
Inventories 110,000
Prepaid expenses 30,000
Total current assets $ 270,000
16) In accounting for internally generated
intangible assets, U.S. GAAP requires that

17) One factor that is not considered in
determining the useful life of an intangible
asset is
18) In 2015, Edwards Corporation incurred
research and development costs as follows:
Materials and equipment $110,000
Personnel 130,000
Indirect costs 150,000
$390,000
These costs relate to a product that will be
marketed in 2016. It is estimated that these
costs will be recouped by December 31, 2018.
The equipment has no alternative future use.
What is the amount of research and
development costs that should be expensed in
2015?
19) The carrying value of an intangible is
20) Under current accounting practice,
intangible assets are classified as
21) The statement of changes in equity has
columns for each of the following except:

22) The pre-emptive right of a common
stockholder is the right to
23) Total stockholders' equity represents
24) The issuer of a 5% common stock
dividend to common stockholders should
transfer from retained earnings to paid-in
capital an amount equal to the
25) Which of the following features of
preferred stock makes it more like a debt
than an equity instrument?

Strayer university acc 304 final exam part 1 (3 sets) new

Strayer university acc 304 final exam part 1 (3 sets) new

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