ACC 304 Final Exam Part 2 (2 Sets) 1 1) On January 1, 2015, Piper Co. issued ten-year bonds with a face value of $3,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 10 periods at 10% .386 Present value of 1 for 10 periods at 12% .322 Present value of 1 for 20 periods at 5% .377 Present value of 1 for 20 periods at 6% .312 Present value of annuity for 10 periods at 10% 6.145

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ACC 304 Final Exam Part 2 (2 Sets) 1
1) On January 1, 2015, Piper Co. issued ten-
year bonds with a face value of $3,000,000
and a stated interest rate of 10%, payable
semiannually on June 30 and December 31.
The bonds were sold to yield 12%. Table
values are:
Present value of 1 for 10 periods at 10% .386
Present value of 1 for 10 periods at 12% .322
Present value of 1 for 20 periods at 5% .377
Present value of 1 for 20 periods at 6% .312
Present value of annuity for 10 periods at
10% 6.145

2. Present value of annuity for 10 periods at
12% 5.650
Present value of annuity for 20 periods at 5%
12.462
Present value of annuity for 20 periods at 6%
11.470
2) Without prejudice to your solution in part
(a), assume that the issue price was
$2,652,000. Prepare the amortization table
for 2015, assuming that amortization is
recorded on interest payment dates using the
effective-interest method.
3) The following information pertains to
Parsons Co.:
Preferred stock, cumulative:
Par value per share $100
Dividend rate 8%
Shares outstanding 9,000
Dividends in arrears none
Common stock:
Par value per share $10
Shares issued 100,000
Dividends paid per share $2.00

3. Market price per share $47
Additional paid-in capital $480,000
Unappropriated retained earnings (after
closing) $250,000
Retained earnings appropriated for
contingencies $280,000
Common treasury stock:
Number of shares 9,000
Total cost $240,000
Net income $610,000
Compute (assume no changes in balances
during the past year): (Round per share and
ratios to 2 decimal places, e.g. $15.75 or
15.75%.)
(a) Total amount of stockholders' equity in
the balance sheet $
(b) Earnings per share of common stock $
per share
(c) Book value per share of common stock $
per share
(d) Payout ratio of common stock
%
(e) Return on common stock equity

4. %
4) Sisco Co. purchased a patent from Thornton
Co. for $620,000 on July 1, 2012. Expenditures
of $119,000 for successful litigation in
defense of the patent were paid on July 1,
2015. Sisco estimates that the useful life of the
patent will be 20 years from the date of
acquisition.
Prepare a computation of the carrying
value of the patent at December 31, 2015.
5) On August 31, Latty Co. partially refunded
$401,000 of its outstanding 10% note payable
made one year ago to Dugan State Bank by
paying $401,000 plus $40,100 interest, having
obtained the $441,100 by using $126,240 cash
and signing a new one-year $346,000 note
discounted at 9% by the bank.
6) Make the entry to record the partial
refunding. Assume Latty Co. makes reversing
entries when appropriate. (Credit account
titles are automatically indented when the
amount is entered. Do not indent manually.)

5. 7) Prepare the adjusting entry at December
31, assuming straight-line amortization of the
discount. (Credit account titles are
automatically indented when the amount is
entered. Do not indent manually.)
ACC 304 Final Exam Part 2 (2 Sets)
1) The following information pertains to
Parsons Co.:
Preferred stock, cumulative:
Par value per share $100
Dividend rate 8%
Shares outstanding 9,000
Dividends in arrears none
Common stock:
Par value per share $10
Shares issued 100,000
Dividends paid per share $2.00
Market price per share $47
Additional paid-in capital $480,000
Unappropriated retained earnings (after
closing) $250,000

6. Retained earnings appropriated for
contingencies $280,000
Common treasury stock:
Number of shares 9,000
Total cost $240,000
Net income $610,000
Compute (assume no changes in balances
during the past year): (Round per share and
ratios to 2 decimal places, e.g. $15.75 or
15.75%.)
(a) Total amount of stockholders' equity in
the balance sheet $
(b) Earnings per share of common stock $
per share
(c) Book value per share of common stock $
per share
(d) Payout ratio of common stock
%
(e) Return on common stock equity
%
2) On January 1, 2015, Piper Co. issued ten-
year bonds with a face value of $3,000,000
and a stated interest rate of 10%, payable

7. semiannually on June 30 and December 31.
The bonds were sold to yield 12%. Table
values are:
Present value of 1 for 10 periods at
10% .386
Present value of 1 for 10 periods at
12% .322
Present value of 1 for 20 periods at 5%
.377
Present value of 1 for 20 periods at 6% .312
Present value of annuity for 10 periods at
10% 6.145
Present value of annuity for 10 periods at
12% 5.650
Present value of annuity for 20 periods at 5%
12.462
Present value of annuity for 20 periods at 6%
11.470
3) Calculate the issue price of the bonds.
Issue price of bond
4) Without prejudice to your solution in part
(a), assume that the issue price was
$2,652,000. Prepare the amortization table

8. for 2015, assuming that amortization is
recorded on interest payment dates using the
effective-interest method.
5) Sisco Co. purchased a patent from Thornton
Co. for $620,000 on July 1, 2012. Expenditures
of $119,000 for successful litigation in
defense of the patent were paid on July 1,
2015. Sisco estimates that the useful life of the
patent will be 20 years from the date of
acquisition.
Prepare a computation of the carrying value
of the patent at December 31, 2015.
6) On August 31, Latty Co. partially refunded
$443,000 of its outstanding 10% note payable
made one year ago to Dugan State Bank by
paying $443,000 plus $44,300 interest, having
obtained the $487,300 by using $134,220 cash
and signing a new one-year $388,000 note
discounted at 9% by the bank.
7) Make the entry to record the partial
refunding. Assume Latty Co. makes reversing

9. entries when appropriate. (Credit account
titles are automatically indented when the
amount is entered. Do not indent manually.)
8) Prepare the adjusting entry at December
31, assuming straight-line amortization of the
discount. (Credit account titles are
automatically indented when the amount is
entered. Do not indent manually.)
Date Account Titles and Explanation
Debit Credit