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ACCT 2110 Leffler Final Exam /
Typology: Exams
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Under the effective interest method, the cash paid on each interest payment date will: - correct answer Remain constant regardless of the issuance price When bond sells at a discount, the stated rate of interest is less than the market rate at the time of issuance. - correct answer True If bonds were issues at a premium, the carrying value of the bonds on the issuers books will: - correct answer Decrease as bond approaches maturity date The effective interest method calculates interest expense as the carrying value times the market/yield rate. - correct answer True A company issued 5-Year, 7%, 1850000 face amount bonds at a premium, paying annual interest. Which one of the following statements is true? - correct answer The annual interest expense on the bonds will be less than the amount of interest payments to bondholders each year. On issuance date, the Bonds pay acct has a balance of 75000000. The premium on bonds pay has a balance of 5000000. Bonds issued at? - correct answer 80000000 What are outstanding shares? - correct answer Shares in the hands of stockholders The balance of retained earnings represents: - correct answer Accumulated earnings not distributed to stockholders When a corporation declares a cash dividend, no entry is required: - correct answer False What are treasury shares? - correct answer Shares repurchased by the company What account is credited when dividends are declared? - correct answer Dividends payable
calculate EPS (earnings per share) - correct answer (net income - preferred dividends) / Average Common Stock Which of the following is not a component of stockholders equity? - correct answer Dividends payable Outstanding shares represent the maximum number of shares that can be issued by a corporation: - correct answer False Harvey Co. has common stock/.25 par value and a balance of $50,000. Treasury stock is currently 15, shares. # of shares outstanding? - correct answer 185000 shares When a company declares a three for one stock split the number of shares - correct answer triples When a company issues 100 $2 par shares for $6, what is the additional paid in capital? - correct answer $ warranty - correct answer A guarantee to repair or replace defective goods for a certain period of time. Sales Tax - correct answer Represent current liabilities of the seller and must be paid to the governmental unit that assesses the tax. Notes Payable - correct answer Arises when a business borrows money or purchases goods or services from a company on credit and requires a formal agreement or contract. Withholdings - correct answer Include taxes, Social Security, Medicare, retirement contributions, health insurance