Accounting Exam Menti Meter

Company sold $1,000 on account, and also has 5% sales tax to remit. The customer is billed for the sales tax? What is the journal entry?

Dr. A/R $1,050 Cr. Sales $1,000 Cr. Sales tax payable $50

The stated rate on a bond is less than the current market rate. The bond will sell at:

Discount

The difference between issued shares and outstanding shares typically is explained by:

Treasury Stock

On issuance, Bonds Payable is $1,000,000, Discount on Bonds Payable is $100,000. The bonds were issued at?

$900,000

To determine the interest expense under the effective interest method, one most know the carrying value of the bond and?

The market or effective rate

At issuance, Bonds payable is $75,000,000, and the Premium on Bonds Payable $6,000,000. The bonds were issued at?

$81,000,000

15 year bond, with 10% stated rate and $1,000,000 face amount. How much interest will be PAID over the bonds life?

$1,500,00О

Bond issue at $2,100,000, stated rate of 10%, effective rate of 9%. At the first 6 mo date,, how much interest exp is recorded under effective method?

$94,500

The balance of retained earnings represents:

Accumulated earnings not distributed to stockholders

On the record date for a dividend, retained earnings is debited and dividends payable is credited..

False

What account is credited when stock split is recorded?

- Common stock

- Retained Earnings

- Additional paid-in capital

^^^ NONE OF THESE (NO ENTRY)

Which of the following is not a component of stockholders' equity?

Dividends Payable

A company has 100,000 outstanding shares. There is a 10 for 1 Stock Split. How many shares are outstanding after the split?

$1,000,000

Earnings per share represents the amount the company earned for each average outstanding share of common and preferred stock.

False

EPS is calculated as: Net Income minus preferred stock dividends divided by what?

Average common shares outstanding

Authorized shares represent the maximum number of shares that can be issued by a corporation.

True

Harvey Co. has common stock $.10 par value and a balance of $150,000. Treasury Stock is currently 150,000 shares. What is # of shares outstanding?

1,350,000

When a large stock dividend is recorded, what account is debited?

Retained earnings

A large stock dividend results in a debit to retained earnings and credit to common stock for:

The par amount times # of shares

Treasury stock resold for an amount greater than its cost basis, results in a

Credit to Additional Paid in Capital

Assume Pfd Stock: 50,000 shs, $10 par, 10% cum. No dividends paid in yr 1 or 2. Co declares $140,000 div in yr 3? How much div to Com and Pfd?

$0 Common/ $140,000 Preferred

Market capitalization is computed as:

Outstanding common shares times the current market value per share

ABC reports $10,000,000 Sales, Gross Margin $3,000,000, Operating Income $1,500,000 & Int exp $150,000 - what is the times interest earned?

10