Question

20. Following are balance sheet amounts for Carolina Company as of 12/31/17:

Preferred Stock                                                              $    200,000

Common Stock                                                                     300,000                       

Paid-In Capital in Excess of Par - Preferred                     200,000

Paid-In Capital in Excess of Par - Common                      400,000

Retained Earnings                                                          500,000

Treasury Stock                                                                100,000

Paid In Capital from Treasury Stock                                    50,000

                                                                                                    

Given the above what is total paid in capital?

Select one:

a. $1,150,000

b. $1,100,000

c. $1,000,000

d. $   600,000

e. $   650,000

21. A corporation issued $600,000, 10%, 5-year bonds on January 1, 2017 for $648,666, which reflects an effective-interest rate of 7%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the carrying value of the bonds on January 1, 2019 is

Select one:

a. $617,911

b. $629,198.

c. $626,001.

d. $638,932.

e. $633,817.

24. The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Select one:

a. increase total liabilities and decrease total assets.

b. decrease total liabilities and stockholders' equity.

c. increase total expenses and total liabilities.

d. decrease total assets and stockholders' equity.

e. increase total assets and stockholders' equity.

26. The following selected amounts are available for Vizio Company:

Retained earnings (beginning)                                                                                 $1,600

Net loss                                                                                                                             300

Write off of uncollectible receivable (to allowance for doubtful accounts)             200                                             

Inventory overstatement from prior period (net of tax)                                            500

Cash dividends declared                                                                                                 200

Stock dividends declared                                                                                    200

Based upon the above information, what is Vizio's ending retained earnings balance?

Select one:

a. $   200

b. $1,400

c. $1,200

d. $   400

e. $1,800

Answer 1

20) Total paid in capital

Preferred stock	200000
Common Stock	300000
Paid-In Capital in Excess of Par - Preferred	200000
Paid-In Capital in Excess of Par - Common	400000
Total paid in capital	1100000

So answer is b) $1100000

21) Calculate carrying value :

Interest paid per semiannual period = 600000*10%*6/12 = 30000

Interest expense on june 30,2017 = 648666*7%*6/12 = 22703

Interest expense on december 30,2017 = 641369*7%*6/12 = 22448

Interest expense on june 30,2018 = (641369-7552)*7%*6/12 = 22184

Interest expense on december 31,2018 = (633817-7816)*7%*6/12 = 21910

Carrying value of January 1,2019 = 633817-7816-8090 = 617911

So answer is a) $617911

26) Ending retained earnings = 1600-500-300-200-200 = $400

So answer is d) $400

24) The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Cash dividend declared and paid so cash decrease and equity decrease

So answer is d) decrease total assets and stockholders' equity.