Question

42. The partnership agreement for Wilson, Pickett & Nelson, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Wilson contributed $90,000, Pickett contributed $54,000 and Nelson contributed $18,000. In the partnership's first year of operation, it incurred a loss of $207,000. What amount of the partnership's loss, rounded to the nearest dollar, should be absorbed by Nelson?

46. Halverstein Company's outstanding stock consists of 12,250 shares of cumulative 5% preferred stock with a $10 par value and 5,250 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

	Dividend Declared
Year 1	$	0
Year 2	$	10,500
Year 3	$	44,000

The amount of dividends paid to preferred and common shareholders in Year 2 is:

47. Sweet Company’s outstanding stock consists of 1,100 shares of noncumulative 4% preferred stock with a $100 par value and 10,100 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

	Dividend Declared
year 1	$	2,100
year 2	$	6,200
year 3	$	32,500

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

50. On January 1, a company issues bonds dated January 1 with a par value of $450,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $432,619. The journal entry to record the first interest payment using straight-line amortization is:

Answer 1

Answer:-

42.

Amount of the partnership's loss to be absorbed by Nelson is $27,500
If the partnership agreement does not specifically address how losses are to be allocated between the partners, the losses are to be shared in the same manner as profits.
Particulars	Wilson	Pickett	Nelson	Total
Capital contributed	90,000	54,000	18,000	162,000
Loss: Wilson = 90,000/162,000*207,000 Pickett = 54,000/162,000*207,000 Nelson = 18,000/162,000*207,000	(1,15,000.00)	(69,000.00)	(23,000.00)	(207,000)

46.

The amount payable as preference dividend is = 12,250 * 10 * 5% = $ 6,125

Since the preferred stock are cumulative therefore dividend for 2015 is in arrears.

Total amount of dividend to be paid in 2016 to preferred shareholders = $ 12,250

But amount declared = $ 10,500

Therefore,amount of dividend that will be paid in 2016 to preferred shareholders will be limited to $ 10,500. ( $ 1750 will be arrears).

47.

Total Preferred Stock = 1100 Shares @ $100 = $110000

Year	Total Dividend	Preferred Dividend	Common Stock Dividend
1	$ 2100	$ 2100 ($ 11000*4%)	$ 0
2	$ 6200	$ 4400 ($ 11000*4%)	$ 1800
3	$ 32500	$ 4400 ($11000*4%)	$ 28100
Total	$ 40800	$ 10900	$ 29900

50.

Par value of 9% bond issued on 1st January = $ 450,000.

Time horizon = 5 years

Contract Rate = 9%

Market Rate = 10%

The bond sold at $ 432,619.

Journal Entry to record the first interest payment using straight line amortization.

If $ 4,50,000 bonds are issued for $432619, the premium on bonds payable was $ 32,619, amortized over 10 interest periods.

Journal Entry :-

Particulars	Debit	Credit
Interest Expense	12,978.57
Premium on Bonds Payable	3,261.90
Cash ($450,000 * 9% *6/12)		16,240.47