Corresponds to CLO 1(a) West Coast Corporation had 800,000

West Coast Corporation had 800,000 shares of common stock outstanding on January 1, issued 200,000 shares on October 1, and had income applicable to common stock of $2,865,000 for the year ended December 31, 2013. Rounded to the nearest penny, earnings per share of common stock for 2013 would be (Points : 7)

Question 2.2.Corresponds to CLO 1(b)
On July 1, 2013, an interest payment date, $120,000 of Tally Corporation bonds were converted into 3,100 shares of Tally Corporation common stock, each having a par value of $35 and a market value of $42. There is $5,700 unamortized discount on the bonds. Using the book value method, Tally would record (Points : 7)

Question 3.3.Corresponds to CLO 1(c)
A corporation issues bonds with detachable warrants. The amount to be recorded as paid-in capital is preferably (Points : 7)

Question 4.4.Corresponds to CLO 1(d)
On January 1, 2013, Morgan Corporation granted stock options to officers and key employees for the purchase of 50,000 shares of the company's $10 par common stock at $25 per share as additional compensation for services to be rendered over the next three years. The market price of common stock was $31 per share at the date of grant. The options are exercisable during a five-year period beginning January 1, 2016 by grantees still employed by Morgan. The Black-Scholes option pricing model determines total compensation expense to be $360,000. The journal entry to record the compensation expense related to these options for 2013 would include a credit to the Paid-in Capital - Stock Options account for (Points : 7)

Question 5.5.Corresponds to CLO 2(a)
On July 1, 2013, Wilshire Corporation acquired 500, $1,000, 8% bonds at 97 plus accrued interest. The bonds were dated April 1, 2013, and mature on March 31, 2018, with interest paid each September 30 and March 31. The bonds will be added to Wilshire's available-for-sale portfolio. The amount to record as the cost of this debt investment on July 1, 2013 is (Points : 7)

Question 6.6.Corresponds to CLO 2(b)
On January 1, 2013, Capital Corporation acquired for $400,000 of 10% bonds, paying $376,100. The bonds mature January 1, 2024; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Capital Corporation uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2013, Capital Corporation should increase its Debt Investments account for these bonds by (round to the nearest dollar): (Points : 7)

Question 7.7.Corresponds to CLO 2(c)
Wright Company's trading securities portfolio, which is appropriately included in current assets, is as follows on December 31, 2013: Holmes Corporation - cost of $300,000 and fair value of $260,000; Woods Corporation - cost of $500,000 and fair value of $520,000. Ignoring income taxes, what amount should be reported as a charge against income in Wright's 2013 income statement if 2013 is Wright's first year of operation? (Points : 7)

Question 8.8.Corresponds to CLO 2(d)
Canton Corporation owns 3,000 of the 10,000 outstanding shares of Wallis Corporation. During 2013, Wallis Corporation earns $500,000 and pays cash dividends of $100,000. What amount should Canton show in the investment account at December 31, 2013 if the beginning of the year balance in the account was $600,000? (Points : 7)

Question 9.9.Corresponds to CLO 3(a)
Which of the following are temporary differences that are normally classified as expenses or losses that are deductible for tax purposes after they are recognized in financial income? (Points : 7)

Question 10.10.Corresponds to CLO 3(b)
In 2013, its first year of operations, Anderson Appliance Corporation had Income (per books before income taxes) of $1,100,000. The following items are included in Anderson's pre-tax income: interest income from municipal bonds of $25,000; accrued warranty costs, estimated to be paid in 2014, of $85,000; and installment sales revenue of $70,000, which will be collected in 2014. In additin, Anderson has on its books prepaid rent expense of $30,000, which will be used in 2014. Assuming the enacted tax rate in effect for 2013 and 2014 is 40%, what amount should Anderson record as the net current deferred tax asset or liability for the year ended December 31, 2013? (Points : 7)

Question 11.11.Corresponds to CLO 3(c)
At December 31, 2013, Edwards Corporation reported a deferred tax liability of $140,000 which was attributable to a taxable temporary difference of $400,000. The temporary difference is scheduled to reverse in 2018. During 2014, a new tax law increased the corporate tax rate from 35% to 40%. Edwards should record this change by debiting (Points : 7)

Question 12.12.Corresponds to CLO 3(d)
Operating income/(loss) and tax rates for Lombard Corporation for 2012 through 2015 were as follows: 2012: $100,000, 30%; 2013: $250,000, 35%; 2014: ($500,000), 35%; 2015: $600,000, 40%. Assuming that Lombard opts to carryback its 2014 NOL, what is the amount of income tax payable at December 31, 2015? (Points : 7)

Question 13.13.Corresponds to CLO 4(a)
Granite Oaks Homebuilding, Inc. is a publicly traded corporation that follows generally accepted accounting principles. Granite Oaks has a defined benefit pension plan in place for its employees. Which of the following measures should Granite Oaks use to determine the company's pension liability? (Points : 7)

Question 14.14.Corresponds to CLO 4(b)
Hathaway, Inc. sponsors a defined-benefit pension plan. The following data relates to the plan for 2013: Contributions to the plan, $350,000; Service cost, $425,000; Interest on projected benefit obligation, $360,000; Amortization of prior service cost due to increase in benefits, $65,000; Expected return on plan assets, $220,000. What amount should be reported for pension expense in 2013? (Points : 7)

Question 15.15.Corresponds to CLO 4(c)
Johnson, Inc. sponsors a defined-benefit pension plan. The following balance sheet data relates to the plan on December 31, 2013: Plan assets (at fair value), $1,000,000; Accumulated benefit obligation, $1,450,000; Projected benefit obligation, $1,750,000. Contributions of $115,000 were made to the plan during the year. What amount should Johnson report as its pension liability on its balance sheet as of December 31, 2013? (Points : 7)

Question 16.16.Corresponds to CLO 4(d)
Which of the following information about its pension plan would a company normally be required to disclose in the notes to the financial statements? (Points : 7)

Question 17.17.Corresponds to CLO 5(a)
Which of the following should be treated as a change in accounting principle? (Points : 7)

Question 18.18.Corresponds to CLO 5(b)
On January 1, 2011, Graham Corporation acquired machinery at a cost of $450,000. Graham adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of 10 years, with no residual value. At the beginning of 2013, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2013 should be (Points : 7)

Question 19.19.Corresponds to CLO 5(c)
During 2014, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years follow. Completed-Contract: 2012, $595,000; 2013, $730,000; 2014, $810,000. Percentage-of-Completion: 2012, $700,000; 2013, $850,000; 2014, $900,000. Assuming an income tax rate of 40% for all years, the affect of this accounting change on prior periods should be reported by a credit of (Points : 7)

Question 20.20.Corresponds to CLO 5(d)
On January 10, 2012, Montgomery Corporation purchased machinery that cost $750,000. The entire cost was recorded as an expense. The machinery has an estimated useful life of 10 years and a $30,000 salvage value. Montgomery uses the straight-line method to account for depreciation expense. The error was discovered on December 29, 2013. Ignore income tax considerations. Montgomery's income statement for the year ended December 31, 2013, should show the cumulative effect of this error in the amount of (Points : 7)

Question 21.21.Corresponds to CLO 6(a)
Selected information from Trolley Corporation's 2013 accounting records is as follows: Proceeds from sale of land, $150,000; Proceeds from long-term borrowings, $325,000; Purchases of plant assets, $70,000; Purchases of inventories, $300,000; Proceeds from sale of Trolley common stock, $100,000. What is the net cash provided (used) by investing activities for the year ended December 31, 2013? (Points : 7)

Question 22.22.Corresponds to CLO 6(b)
Selected information from Maxwell Corporation's 2013 accounting records is as follows: Proceeds from issuance of common stock, $740,000; Proceeds from issuance of bonds, $2,400,000; Cash dividends paid on common stock, $200,000; Cash dividends paid on preferred stock paid, $80,000; Purchases of treasury stock, $200,000.What is the net cash provided (used) by financing activities for the year ended December 31, 2013? (Points : 7)

Question 23.23.Corresponds to CLO 6(c)
A decrease in accounts receivable during a period would be reported in a statement of cash flows, using the indirect method, as a(n) (Points : 7)

Question 24.24.Corresponds to CLO 6(d)
Which of the following formulas would a bank or an investor most likely not use to evaluate a company's cash flows? (Points : 7)

Question 25.25.Corresponds to CLO 7(a)
Which of the following statements best describes the full disclosure principle? (Points : 7)

Question 26.26.Corresponds to CLO 7(b)
The following information pertains to Nolen Corporation and its divisions for the year ended December 31, 2013:

Segments Total Revenue (Unaffiliated)
A $600,000
B $100,000
C $500,000
D $650,000

Nolen has a reportable segment if that segment's revenue exceeds (Points : 7)

Question 27.27.Corresponds to CLO 7(c)
Under generally accepted accounting principles, (Points : 7)

Question 28.28.Corresponds to CLO 7(d)
Which of the following post-balance-sheet events would require adjustment of the accounts before issuance of the financial statements? (Points : 7)