ACC 423 Final Exam
ACC 423 Final Exam
Question 1: Buttercup Corporation issued 250 shares of $11 par value common stock for $4,125. Prepare Buttercup' journal entry.
Question 2: Wilco Corporation has the following account balances at December 31, 2012.
Common stock, $5 par value $511,670
Treasury stock 95,260
Retained earnings 2,400,840
Paid-in capital in excess of par 1,320,150
Prepare Wilco's December 31, 2012, stockholders' equity section
Question 3: Woolford Inc. declared a cash dividend of $1.38 per share on its 2.22 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare the journal entries necessary on those three dates.
Question 4: …show more content…
Use the information in the following T-account for the investment in Demo to answer the following questions.
Question 14: (Fair Value and Equity Method Compared). Gregory Inc. acquired 20% of the outstanding common stock of Handerson Inc. on December 31, 2012. The purchase price was $1,320,000 for 50,000 shares. Handerson Inc. declared and paid an $0.87 per share cash dividend on June 30 and on December 31, 2013. Handerson reported net income of $741,000 for 2013. The fair value of Handerson's stock was $32 per share at December 31, 2013.
Question 15: (Call Option). On January 2, 2012, Jones Company purchases a call option for $450 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January 2, 2012 (the intrinsic value is therefore $0). On March 31, 2012, the market price for Merchant stock is $60 per share, and the time value of the option is $200.
Question 16: In 2012, Amirante Corporation had pretax financial income of $207,000 and taxable income of $166,400. The difference is due to the use of different depreciation methods for tax and accounting purposes. The effective tax rate is 40%. Compute the amount to be reported as income taxes payable at December 31, 2012.
Question 17: At December 31, 2012, Fell Corporation had a deferred tax