Final Exam: Corporations Essay

irresolution 1 crowfoot confederacy issued 250 sections of $11 comparability rank cat valium bear for $4,125. relieve oneself Buttercup journal creation. incredulity 2 Wilco flock has the pursuit work egress balances at declination 31, 2012. Common hold, $5 par survey $511,670 treasury impart 95,260 hold loot 2,400,840Paid-in capital in excess of par 1,320,150Prepare Wilcos celestial latitude 31, 2012, acquitholders equity section inquiry 3 Woolford Inc. declare a cash dividend of $1.38 per share on its 2.22 zillion dramatic shares. The dividend was declared on August 1, payable on family line 9 to on the whole stockholders of record on August 15. Prepare the journal entries inevitable on those three seasons. inquire 4 The nifty capital stock of Pennington Corporation consists of 3,100 shares of $109 par value, 6% preferable, and 5,700 shares of $52 par value common. presume that the company has retained earnings of $83,000, all of which is to be paid ou t in dividends, and that favored dividends were not paid during the 2 twelvemonths prior the current year, state how much for each one class of stock should get a line down the stairs each of the sideline conditions. interrogative 5 Martinez corporations ledger shows the following balances on December 31, 2012. 5% Preferred stock-$10 par value, outstanding 22,480 shares $224,800 Common stock-$100 par value, outstanding 33,720 shares 3,372,000 Retained earnings 708,120Assuming that the directors decide to declare total dividends in the bill of $298,984, determine how much each class of stock should receive down the stairs each of the conditions stated below. One years dividends are in arrears on the preferred stock.Question 6 On January 1, 2012, Barwood Corporation granted 5,040 options to executives. Each option entitles the holder to purchase one share of Barwoods $5 par value common stock at $50 per share at any time during the next 5 years. The commercialize impairmen t of the stock is $72 per share on the date of grant. The uninfected value of the options at the grant date is $154,000. The period of benefit is 2 years. Prepare Barwoodsjournal entries for January 1, 2012, and December 31, 2012 and 2013.Question 7 Rockland Corporation earned exonerate income of $340,800 in 2012 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $908,800 of 10% bonds, which are convertible into 18,176 shares of common. Rocklands valuate respect is 40 percent. puzzle out Rocklands 2012 cut earnings per share.Question 8 DiCenta Corporation overlayed net income of $250,000 in 2012 and had 50,000 shares of common stock outstanding throughout the year. Also outstanding all year were 5,410 shares of cumulative preferred stock, each convertible into 2 shares of common. The preferred stock pays an annual dividend of $5 per share. DiCenta tax rate is 40%. exercise DiCenta 2012 diluted earnings per share.Question 9 Ferraro, Inc. established a stock appreciation rights (SAR) program on January 1, 2012, which entitles executives to receive cash at the date of exercise for the contrast between the grocery store price of the stock and the pre-established price of $24 on 5,050 SARs. The required service period is 2 years. The jolly value of the SARs are determined to be $6 on December 31, 2012, and $13 on December 31, 2013.Question 10 Hillsborough Co. has an available-for-sale enthronement in the bonds of Schuyler with a carrying (and fair) value of $88,020. Hillsborough determined that due to poor scotch prospects for Schuyler, the bonds admit decreased in value to $57,020. It is determined that this loss in value is other-than temporary. Prepare the journal entrance, if any, to record the reduction in value.Question 11 Capriati Corporation made the following cash purchases of securities during 2012, which is the first year in which Arantxa invested in securities. 1. On January 15, purchas ed 11,700 shares of Gonzalez Companys common stock at $43.55 per share plus agency $2,574. 2. On April 1, purchased 6,500 shares of Belmont Co.s common stock at $67.60 per share plus commission $4,381. 3. On September 10, purchased 9,100 shares of Thep Co.s preferred stock at $34.45 per share plus commission $6,383. On may 20, 2012, Capriati sold 3,900 shares of Gonzalez Companys common stock at a market price of $45.50 per share less brokerage house commissions, taxes, and fees of $3,705. The year-end fair values per share were Gonzalez $39.00, Belmont $71.50, and Thep $36.40. In addition, the chief controller of Capriati told you that Capriati Corporation plans to hold these securities for the long term but may cheat on them in order to earn profits from appreciation in prices.Question 12 (Journal Entries for Fair Value and Equity Methods) Presented below are 2 independent situations.Prepare all necessary journal entries in 2012 for each situation.Situation 1Hatcher Cosmetic s acquired 10% of the 207,400 shares of common stock of Ramirez dash at a total monetary value of $15 per share on butt against 18, 2012. On June 30, Ramirez declared and paid a $80,200 cash dividend. On December 31, Ramirez reported net income of $123,500 for the year. At December 31, the market price of Ramirez Fashion was $18 per share. The securities are classified as available-for-sale.Situation 2Holmes, Inc. obtained momentous influence over Nadal Corporation by buying 25% of Nadals 30,800 outstanding shares of common stock at a total cost of $9 per share on January 1, 2012. On June 15, Nadal declared and paid a cash dividend of $43,800. On December 31, Nadal reported a net income of $90,500 for the year. Question 13 (Equity Method) Gator Co. invested $1,380,000 in record Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in dividends each year. Use the selective information in the following T-account for the enthronization in Demo to answer the fo llowing 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 Handersons stock was $32 per share at December 31, 2013. Question 15 (Call Option). On January 2, 2012, Jones Company purchases a border option for $450 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a hitting 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 demonstrate 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 ra table income of $166,400.The difference is due to the use of differentdepreciation methods for tax and account 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, go away Corporation had a deferred tax financial obligation of $732,802, resulting from future taxable amounts of $2,155,300 and an enacted tax rate of 34%. In May 2013, a new income tax act is signed into law that raises the tax rate to 42% for 2013 and future years. Prepare the journal entry for Fell to adjust the deferred tax liability. Question 18 AMR Corporation (parent company of American Airlines) reported the following for 2009 (in millions).Service cost $405 enkindle cost on P.B.O 736Return on plan assets 825Amortization of service cost 29Amortization of loss 66Compute AMR Corporations 2009 support depreciate (in millions).Question 19 For rabbit warren Corporation, year-end plan assets were $2,094,700. At th e root word of the year, plan assets were $1,762,400. During the year, contributions to the pension fund were $120,000, and benefits paid were $200,000. Compute Warrens actual return on plan assets.Question 20 For 2010, Campbell Soup Company had pension expense of $48 million and contributed $296 million to the pension fund. Prepare Campbell Soup Companys journal entry to record pension expense and funding.Question 21 Lahey Corp. has three defined-benefit pension plans as follows.Pension Assets(at Fair Value) Projected BenefitObligation aim X $637,500 $504,000Plan Y 902,200 739,900Plan Z 584,600 713,200How go forth Lahey report these multiple plans in its financial statements? Question 22 For 2012, Sampsell Inc. computed its annual postretirement expense as $278,680. Sampsells contribution to the plan during 2012 was $185,750. Prepare Sampsells 2012 entry to record postretirement expense.Question 23 Wertz Corporation decided at the beginning of 2012 to changefrom the completed-con tract method to the percentage-of-completion method for financial reporting purposes. The company will continue to use completed-contract method for tax purposes. For years prior to 2012, pre-tax income under the two methods was as follows percentage-of-completion $143,000, and completed-contract $65,800. The tax rate is 32%. Prepare Wertzs 2012 journal entry to record the change in accounting principle.Question 24 In 2012, Bailey Corporation discovered that equipment purchased on January 1, 2010, for $50,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 29%. Prepare Hiatts 2012 journal entry to correct the error.Question 25 At January 1, 2012, Beilder Company reported retained earnings of $2,027,300. In 2012, Beilder discovered that 2011 depreciation expense was understated by $442,300. In 2012, net income was $931,270 and dividends declared were $204,310. The tax rate is 38%. Complete the 2012 r etained earnings statement for Beilder Company.Question 26 Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the coronation was accounted for using the equity method. In early 2012, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2012, Armstrong earned net income of $81,100 and paid dividends of $90,400. Prepare Simmonss entries related to Armstrongs net income and dividends, assumptive Simmons now owns 11% of Armstrongs stock.Question 27 Manno Corporation has the following information available concerning its postretirement benefit plan for 2012. Service cost $53,750Interest cost 58,360Actual return on plan assets 40,190Compute Mannos 2012 postretirement expenseQuestion 28 Ravonette Corporation issued 310 shares of $13 par value common stock and 130 shares of $47 par value preferred stock for a lump sum of $17,500. The common stock has a market price of $22 per share, and the preferred stock has a market price of $98 per share. Prepare the journal entry to record the issuanceQuestion 29 Garfield Company purchased, as a held-to-maturity investment, $82,400 of the 9%, 8-year bonds of Chester Corporation for $73,919, which provides an 11% return. Prepare Garfields journal entries for (a) the purchase of the investment and (b) the pass onof annual interest and discount amortisation. Assume effective interest amortization is used.Question 30 Clydesdale Corporation has a cumulative temporary difference related to depreciation of $606,600 at December 31, 2012. This difference will stamp out as follows 2013, $43,100 2014, $264,300 and 2015, $299,200. Enacted tax rates are 34% for 2013 and 2014, and 40% for 2015. Compute the amount Clydesdale should report as a deferred tax liability at December 31, 2012