ACCT220 Quiz - Towson Corp., was organized

ACCT220 Quiz

Question 1 (7 points)

 

 

 

Towson Corp., was organized on January 2, 2018. During the first year of operation, Towson issued 70,000 shares of $4 par value common stock at a price of $35 cash per share.  On December 31, 2018, Towson reported Net Income of $250,000 and paid $50,000 cash dividends. Use this information to determine the dollar amounts that Towson will report on its year end Balance Sheet for Paid in Capital Common Stock in Excess to par.

 

Your Answer:

 

Question 2 (7 points)

 

 

 

Towson Corp., had 6,000 shares of $100 par, 4% cumulative preferred stock as of January 1, 2018.  No additional shares of preferred stock were issued during fiscal years 2018 & 2019.   Dividends were paid to common shareholders in 2017 but no shareholders were paid dividends in 2018.  A total of $95,000 of dividends was paid in 2019.  Use this information to determine the total dollar amount of dividends that was paid to common shareholders during fiscal year 2019.

 

Your Answer:

 

Question 3 (7 points)

 

 

 

On January 2, 2018, the first year of operations, Brunswick Corp., issued 15,000 shares of $10 par value common stock for $15 per share.  On July 1, 2018, Alpha Corp., 2,000 of these shares were reacquired for $20 each. On September 1, 2018 Brunswick Corp. reissued 700 shares of its treasury stock for $23 per share. No other stock transactions occurred during the rest of fiscal year 2018. Use this information to determine the dollar amount that Alpha will report on its fiscal year 2018 Balance Sheet for Paid in Capital Treasury Stock.

 

Your Answer:

 

Question 4 (7 points)

 

 

 

On August 1, 2018, Towson Corp., declared a 5% stock dividend on its common stock when the market value of the common stock was $16 per share.  The balance in the common stock account, before the stock dividend was declared, was $1,100,000.  The par value of all common stock is $10.  What is the total dollar amount credited to additional paid in capital - common stock on August 1, 2018?

 

Your Answer:

 

Question 5 (7 points)

 

 

 

Easton Company prepares annual adjusting entries only. During the third quarter of Fiscal Year 2018, Easton Company acquired the following trading securities:

 

Date

 

Company

 

# of Shares

 

Price per Share

 

8/15

 

X Company

 

1,500

 

$42

 

9/25

 

Y Company

 

1,250

 

30

 

9/30

 

Z Company

 

1,000

 

28

 

On November 10th, Easton Company sold the Y Company stock for $31 per share. On December 15th, Z Company paid dividends of $0.12 per share. The following were the year-end market values:

 

Company

 

FMV per Share

 

X Company

 

$47

 

Y Company

 

15

 

Z Company

 

27

 

What the total dollar values that Towson Company should record for the Unrealized Gain or (Loss) on Trading Securities for 2018?  Enter a Loss as a negative number.

 

Your Answer:

 

Question 6 (7 points)

 

 

 

Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of:

 

Dollar Value

 

Age of Account

 

Estimated Collectible

 

$230,000

 

< 30 days old

 

99.0%

 

80,000

 

30 to 60 days old

 

91.5%

 

30,000

 

61 to 120 days old

 

73.5%

 

14,000

 

> 120 days old

 

20.0%

 

The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted balance of zero. After the adjusting entry is made, what will be the dollar balances in the Allowance for Doubtful Accounts?  Round to nearest whole dollar.

 

Your Answer:

 

Question 7 (7 points)

 

 

 

Arundel Company uses percentage of sales to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance of $78,000 and had a total of $715,000 in credit sales.  Arundel assumes that 1.5% of sales will eventually be uncollectible.  before adjustment, the Allowance for Uncollectible Accounts had a credit balance of 6,000.  What dollar amount should be credited to Allowance for Uncollectible Accounts at year end?

 

Your Answer:

 

Question 8 (7 points)

 

 

 

Salisbury Company uses the perpetual inventory system and had the following inventory & sales activity for the month of May 2019:

 

Date

 

Activity

 

Quantity

 

Unit Price

 

5/1

 

Beginning Inventory

 

175

 

$12.00

 

5/5

 

Purchase

 

200

 

$11.00

 

5/10

 

Sales

 

300

 

$25

 

5/15

 

Purchase

 

200

 

$13.00

 

5/20

 

Sales

 

250

 

$28

 

5/25

 

Purchase

 

150

 

$12.50

 

Using the LIFO method, determine the dollar value for Ending Inventory at the end of month of May.  Round to the nearest cent.

 

Your Answer:

 

Question 9 (7 points)

 

 

 

Adelphi Company purchased a machine on January 1, 2017, for $100,000.  The machine was estimated to have a service life of ten years with an estimated residual value of $5,000.  Adelphi sold the machine on January 1, 2021 for $21,000. Adelphi uses the double declining method for depreciation. Using this information, how much is the gain or (loss) for the equipment sale entry made on January 1, 2021.  Enter a loss as a negative number.

 

Your Answer:

 

Question 10 (7 points)

 

 

 

Barbara is an employee of Baltimore Company. Baltimore Company pays employees the Friday after the wages are earned. Overtime in excess of 40 hours must be paid at 150% of the normal hourly rate.  Social Security taxes are 6.2% and Medicare taxes are 1.45%. The federal unemployment tax rate is 1.1% and the state unemployment tax rate is 3.5%. Barbara's wages, including the current pay period, will not exceed the limits for Social Security, Medicare and unemployment taxes.  Barbara earns $18 per hour and worked 46 hours for the week ended January 13 , 2019.  Baltimore will withhold $220 federal income taxes. Use this information to determine the total payroll tax expense for Baltimore Company as related to Barbara's earnings.  (Round to the closest cent)

 

Your Answer:

 

Question 11 (15 points)

 

 

 

The following is the Easton Company adjusted Trial Balance.

 

Easton Company

 

Adjusted Trial Balance

 

December 31, 2018

 

Account Title

 

Debit

 

Credit

 

Cash

 

$88,665

 

 

 

Accounts Receivable

 

232,400

 

 

 

Supplies

 

17,000

 

 

 

Equipment

 

395,000

 

 

 

Accumulated Depreciation

 

 

 

$224,260

 

Accounts Payable

 

 

 

72,555

 

Capital Stock

 

 

 

220,000

 

Retained Earnings

 

 

 

127,145

 

Service Revenue

 

 

 

881,105

 

Interest Income

 

 

 

5,500

 

Dividends

 

9,000

 

 

 

Rent Expense

 

59,500

 

 

 

Wages Expense

 

529,000

 

 

 

Supplies Expense

 

42,000

 

 

 

Utilities Expense

 

8,000

 

 

 

Depreciation Expense

 

150,000

 

________

 

     Totals

 

$1,530,565

 

$1,530,565

 

Use this information to prepare the Single-Step Income Statement for the fiscal year. There are additional lines in the formatted income statement form to allow for authorized alternate presentations.

 

Easton Company

 

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 12

 

The following is the Easton Company's adjusted Trial Balance.

 

Easton Company

 

Adjusted Trial Balance

 

December 31, 2018

 

Account Title

 

Debit

 

Credit

 

Cash

 

$88,665

 

 

 

Accounts Receivable

 

232,000

 

 

 

Supplies

 

17,000

 

 

 

Equipment

 

395,000

 

 

 

Accumulated Depreciation

 

 

 

$224,260

 

Accounts Payable

 

 

 

72,555

 

Capital Stock

 

 

 

220,000

 

Retained Earnings

 

 

 

127,145

 

Service Revenue

 

 

 

877,105

 

Interest Income

 

 

 

5,500

 

Dividends

 

7,000

 

 

 

Rent Expense

 

59,900

 

 

 

Wages Expense

 

529,000

 

 

 

Supplies Expense

 

40,000

 

 

 

Utilities Expense

 

8,000

 

 

 

Depreciation Expense

 

150,000

 

________

 

     Totals

 

$1,526,565

 

$1,526,565

 

Use this information to prepare the Balance Sheet for the fiscal year. There are additional lines in the formatted Balance Sheet form to allow for authorized alternate presentations.

 

 Answer

 

 

 

Easton Company

 

Balance Sheet