For more course tutorials visit uophelp.com is now newtonhelp.com www.newtonhelp.com This Tutorial contains Excel File which can be used for any change in values Week 5 Final Exam CPA Question 01 CPA Question 02 CPA Question 05 Question 29 Brief Exercise 15-4 Exercise 15-1 CPA Question 04 CPA Question 06

1. ACC 423 Final Exam Guide (New 2018, With EXCEL FILE)
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Week 5 Final Exam
CPA Question 01
CPA Question 02
CPA Question 05
Question 29
Brief Exercise 15-4
Exercise 15-1
CPA Question 04
CPA Question 06
Brief Exercise 16-2
Brief Exercise 16-7
Brief Exercise 17-1
Brief Exercise 17-9
Brief Exercise 17-13

2. Exercise 17-3
Exercise 17-10
Question 8
Brief Exercise 19-3
Brief Exercise 19-12
Exercise 19-2
CPA Question 08
CPA Question 02
Brief Exercise 20-8
Exercise 20-1
Exercise 20-5
Exercise 20-12
CPA Question 03
Exercise 22-19
CPA Question 01
On September 1, 2017, Hyde Corp., a newly formed company, had the following stock
issued and outstanding:
• Common stock, no par, $1 stated value, 5,000 shares originally issued at $15 per share.
• Preferred stock, $10 par value, 1,500 shares originally issued for $25 per share.
Hyde's September 1, 2017 statement of stockholders' equity should report
Common
stock
Preferred
stock
Additional Paid-
in capital
CPA Question 02

3. Beck Corp. issued 200,000 shares of common stock when it began operations in year 1
and issued an additional 100,000 shares in year 2. Beck also issued preferred stock
convertible to 100,000 shares of common stock. In year 3, Beck purchased 75,000 shares
of its common stock and held it in Treasury. At December 31, year 3, how many shares
of Beck's common stock were outstanding?
CPA Question 05
Jones Co. had 50,000 shares of $5 par value common stock outstanding at January 1. On
August 1, Jones declared a 5% stock dividend followed by a two-for-one stock split on
September 1. What amount should Jones report as common shares outstanding at
December 31?
Question 29
Grouper Corp. had $100,000 of 7%, $20 par value preferred stock and 12,000 shares of
$25 par value common stock outstanding throughout 2017.
Assuming that total dividends declared in 2017 were $64,000, and that the preferred
stock is not cumulative but is fully participating, common stockholders should receive
2017 dividends of what amount?
Assuming that total dividends declared in 2017 were $64,000, and that the preferred
stock is fully participating and cumulative with preferred dividends in arrears for 2016,
preferred stockholders should receive 2017 dividends totaling what amount?
Assuming that total dividends declared in 2017 were $30,000, that the preferred stock is
cumulative, nonparticipating, and was issued on January 1, 2016, and that $5,000 of
preferred dividends were declared and paid in 2016, the common stockholders should
receive 2017 dividends totaling what amount?
Brief Exercise 15-4
Kingbird Corporation issued 384 shares of $10 par value common stock and 144 shares
of $50 par value preferred stock for a lump sum of $19,872. The common stock has a
market price of $20 per share, and the preferred stock has a market price of $100 per
share.
Prepare the journal entry to record the issuance.
Exercise 15-1
During its first year of operations, Metlock Corporation had the following transactions
pertaining to its common stock.
Jan.
10
Issued 80,500 shares for cash at $6 per share.
Mar.
1
Issued 5,000 shares to attorneys in payment of a bill for $37,700 for services
rendered in helping the company to incorporate.
July
1
Issued 33,300 shares for cash at $8 per share.

4. Sept.
1
Issued 62,100 shares for cash at $10 per share.
(a)
Prepare the journal entries for these transactions, assuming that the common stock
has a par value of $5 per share.
(b)
Prepare the journal entries for these transactions, assuming that the common stock is
no-par with a stated value of $2 per share.
CPA Question 04
A restricted stock award was granted at the beginning of 2015 calling for 3,000 shares of
stock to be awarded to executives at the beginning of 2019. The fair value of one option
was $20 at grant date. During 2017, 100 shares were forfeited because an executive left
the firm.
What amount of compensation expense is recognized for 2017?
CPA Question 06
A company had the following outstanding shares as of January 1, year 2:
Preferred stock, $60
par, 4%, cumulative
10,000
shares
Common stock, $3
par
50,000
shares
On April 1, year 2, the company sold 8,000 shares of previously unissued common stock.
No dividends were in arrears on January 1, year 2, and no dividends were declared or
paid during year 2. Net income for year 2 totaled $236,000. What amount is basic
earnings per share for the year ended December 31, year 2?
Brief Exercise 16-2
Oriole Corporation has outstanding 2,100 $1,000 bonds, each convertible into 60 shares
of $10 par value common stock. The bonds are converted on December 31, 2017, when
the unamortized discount is $26,200 and the market price of the stock is $21 per share.
Record the conversion using the book value approach.
Brief Exercise 16-7
On January 1, 2017, Larkspur Corporation granted 2,000 shares of restricted $5 par value
common stock to executives. The market price (fair value) of the stock is $66 per share
on the date of grant. The period of benefit is 2 years.
Prepare Larkspur’s journal entries for January 1, 2017, and December 31, 2017 and
2018.

5. Brief Exercise 17-1
Teal Company purchased, on January 1, 2017, as a held-to-maturity investment,
$81,000 of the 8%, 5-year bonds of Chester Corporation for $74,859, which provides
an 10% return.
Prepare Teal’s journal entries for (a) the purchase of the investment, and (b) the receipt of
annual interest and discount amortization. Assume effective-interest amortization is
used.
BE 17-3
Brief Exercise 17-9
The following information relates to Culver Co. for the year ended December 31, 2017:
net income 1,321 million; unrealized holding loss of $11.7 million related to available-
for-sale debt securities during the year; accumulated other comprehensive income of
$56.3 million on December 31, 2016. Assuming no other changes in accumulated other
comprehensive income.
Determine (a) other comprehensive income for 2017, (b) comprehensive income for
2017, and (c) accumulated other comprehensive income at December 31, 2017
Exercise 17-3
On January 1, 2017, Carla Company purchased 8% bonds having a maturity value of
$360,000, for $390,329.57. The bonds provide the bondholders with a 6% yield. They are
dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of
each year. Carla Company uses the effective-interest method to allocate unamortized
discount or premium. The bonds are classified in the held-to-maturity category.
Question 8
Skysong financial income for Lake Inc. is $290,000, and its taxable income is $100,000
for 2018. Its only temporary difference at the end of the period relates to a $100,000
difference due to excess depreciation for tax purposes. If the tax rate is 39% for all
periods, compute the amount of income tax expense to report in 2018. No deferred
income taxes existed at the beginning of the year.
Brief Exercise 19-3

6. Marigold Corporation began operations in 2017 and reported pretax financial income of
$206,000 for the year. Marigold’s tax depreciation exceeded its book depreciation by
$33,000. Marigold’s tax rate for 2017 and years thereafter is 30%. Assume this is the
only difference between Marigold’s pretax financial income and taxable income.
Prepare the journal entry to record the income tax expense, deferred income taxes, and
income taxes payable
Brief Exercise 19-12
Blossom Corporation had the following tax information.
Year
Taxable
Income
Tax
Rate
Taxes Paid
2015 $306,000 34% $104,040
2016 324,000 29% 93,960
2017 393,000 29% 113,970
In 2018, Blossom suffered a net operating loss of $488,000, which it elected to carry
back. The 2018 enacted tax rate is 28%.
Prepare Blossom’s entry to record the effect of the loss carryback.
Exercise 19-2
The following information is available for Pronghorn Corporation for 2016 (its first year
of operations).
1.
Excess of tax depreciation over book depreciation, $40,800. This $40,800 difference
will reverse equally over the years 2017–2020.
2.
Deferral, for book purposes, of $21,400 of rent received in advance. The rent will be
recognized in 2017.
3. Pretax financial income, $319,400.
4. Tax rate for all years, 30%.
CPA Question 08
Brass Co. reported income before income tax expense of $60,000 for 2017. Brass had no
permanent or temporary timing differences for tax purposes. Brass has an effective tax
rate of 30% and a $40,000 net operating loss carry-forward from 2016. What is the
maximum income tax benefit that Brass can realize from the loss carry-forward for
2017?

7. Brief Exercise 20-8
Windsor Corporation has the following balances at December 31, 2017.
Projected benefit
obligation
$2,705,000
Plan assets at fair
value
2,099,000
Accumulated OCI
(PSC)
995,000
What is the amount for pension liability that should be reported on Windsor's balance
sheet at December 31, 2017?
Exercise 20-1
The following information is available for the pension plan of Marigold Company for the
year 2017.
Actual and expected return on
plan assets
$ 16,300
Benefits paid to retirees 38,400
Contributions (funding) 94,400
Interest/discount rate 11%
Prior service cost amortization 8,800
Projected benefit obligation,
January 1, 2017
510,000
Service cost
63,300
Exercise 20-12
Shamrock Company received the following selected information from its pension plan
trustee concerning the operation of the company’s defined benefit pension plan for the
year ended December 31, 2017.
January 1,
2017
December 31,
2017
Projected benefit
obligation
$1,499,000 $1,527,000
Market-related and fair
value of plan assets
802,000 1,127,200
Accumulated benefit
obligation
1,622,000 1,742,500
Accumulated OCI
(G/L)—Net gain
0 (199,900)

8. The service cost component of pension expense for employee services rendered in the
current year amounted to $78,000 and the amortization of prior service cost was
$120,500. The company’s actual funding (contributions) of the plan in 2017 amounted to
$245,000. The expected return on plan assets and the actual rate were both 10%; the
interest/discount (settlement) rate was 10%. Accumulated other comprehensive income
(PSC) had a balance of $1,205,000 on January 1, 2017. Assume no benefits paid in 2017.
CPA Question 03
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During 2017, Orca Corp. decided to change from the FIFO method of inventory valuation
to the weighted-average method. Inventory balances under each method were as follows:
FIFO Weighted-average
January 1, 2017$71,000 $77,000
December 31, 2017$79,000 $83,000
Orca's income tax rate is 30%.
In its 2017 financial statements, what amount should Orca report as the cumulative effect
of this accounting change?
Exercise 22-18
Pina Tool Company’s December 31 year-end financial statements contained the
following errors.
December 31, 2017 December 31, 2018
Ending inventory $10,500 understated $7,400 overstated
Depreciation expense $2,100 understated —
An insurance premium of $70,200 was prepaid in 2017 covering the years 2017, 2018,
and 2019. The entire amount was charged to expense in 2017. In addition, on December
31, 2018, fully depreciated machinery was sold for $13,500 cash, but the entry was not
recorded until 2019. There were no other errors during 2017 or 2018, and no corrections
have been made for any of the errors. (Ignore income tax considerations.)
Exercise 22-19
A partial trial balance of Bramble Corporation is as follows on December 31, 2018.

9. Dr. Cr.
Supplies $2,600
Salaries and wages payable $1,500
Interest Receivable 4,600
Prepaid Insurance 86,200
Unearned Rent 0
Interest Payable 14,100
Additional adjusting data:
1. A physical count of supplies on hand on December 31, 2018, totaled $1,100.
2.
Through oversight, the Salaries and Wages Payable account was not changed during
2018. Accrued salaries and wages on December 31, 2018, amounted to $4,700.
3.
The Interest Receivable account was also left unchanged during 2018. Accrued
interest on investments amounts to $3,700 on December 31, 2018.
4.
The unexpired portions of the insurance policies totaled $68,300 as of December 31,
2018.
5.
$26,500 was received on January 1, 2018, for the rent of a building for both 2018 and
2019. The entire amount was credited to rent revenue.
6.
Depreciation on equipment for the year was erroneously recorded as $5,200 rather
than the correct figure of $52,000.
7.
A further review of depreciation calculations of prior years revealed that equipment
depreciation of $7,500 was not recorded. It was decided that this oversight should be
corrected by a prior period adjustment.
Exercise 22-5
Presented below are income statements prepared on a LIFO and FIFO basis for Novak
Company, which started operations on January 1, 2016. The company presently uses the
LIFO method of pricing its inventory and has decided to switch to the FIFO method in
2017. The FIFO income statement is computed in accordance with the requirements of
GAAP. Novak’s profit-sharing agreement with its employees indicates that the company
will pay employees 10% of income before profit-sharing. Income taxes are ignored.
Question 18
In January 2017, installation costs of $5,800 on new machinery were charged to
Maintenance and Repairs Expense. Other costs of this machinery of $29,000 were

10. correctly recorded and have been depreciated using the straight-line method with an
estimated life of 10 years and no salvage value. At December 31, 2018, it is decided that
the machinery has a remaining useful life of 20 years, starting with January 1, 2018.
What entries should be made in 2018 to correctly record transactions related to
machinery, assuming the machinery has no salvage value? The books have not been
closed for 2018 and depreciation expense has not yet been recorded for 2018.