Print Assignment: Assignment 4 ::true

Page 1 of 10

Question 1
Adana Inc. reported net income of $186,000 during 2014 and paid dividends of $ 26,000 on
ordinary shares. It also has 10,000 shares of 6%, $100 par value, non-cumulative preference
shares outstanding. Ordinary shareholders equity was $1,200,000 on January 1, 2014, and
$1,600,000 on December 31, 2014. The companys return on ordinary equity for 2014 is

10.0%.
9.0%.
7.1%.
13.3%.

Question 2
Dailey Company is a publicly held corporation whose $1 par value ordinary shares are actively
traded at $22 per share. The company issued 3,000 shares to acquire land recently advertised at
$82,000. When recording this transaction, Dailey Company will

credit Share PremiumOrdinary for $79,000.

debit Land for $82,000.
debit Land for $66,000.
credit Share CapitalOrdinary for $66,000.

Question 3
Lang Inc. reported net income of 235,000 during 2014 and paid dividends of 26,000 on ordinary
shares. It also has 10,000 shares of 6%, 100 par value preference share outstanding. Ordinary
shareholders' equity was 1,200,000 on January 1, 2014, and 1,600,000 on December 31, 2014.
The company's return on ordinary shareholders' equity for 2014 is:

12.5%.
14.9%.
10.6%.
16.8%.

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 2 of 10

Question 4
Kinadynes land account decreased 90,000 as a result of a cash sale in which land was sold for
100,000. A gain was recognized on the sale for 10,000. The Equipment account increased
20,000 as a result of a cash equipment acquisition and by 25,000 as a result of the purchase of
a truck by issuing a five-year note for 25,000. In addition, Notes Payable increased from an
issuance of a note for cash for 50,000. How much is cash provided by investing activities?

70,000
80,000
55,000
105,000

Question 5
If Vickers Company issues 5,000 ordinary shares with a $5 par value for $175,000,

Cash will be debited for $150,000.

Share PremiumOrdinary will be credited for $150,000.
Share PremiumOrdinary will be credited for $25,000.
Share CapitalOrdinary will be credited for $175,000.

Question 6
Delsman Corporation purchased 2,200 of its $3 par value ordinary shares for $140,800 on August
1. It will hold these shares in the treasury until resold. On December 1, the corporation
sold 1,320 treasury shares for cash at $74 per share.
Journalize the treasury share transactions. (Record entries in the order displayed in the
problem statement. Credit account titles are automatically indented when amount is
entered. Do not indent manually.)
Date

Account Titles and

Explanation

Debit

Credit

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 3 of 10

Question 7
Inmann Corporation has 3,000 7%, 120 par value preference shares outstanding at December
31, 2014. At December 31, 2014, the company declared a 120,600 cash dividend.
Determine the dividend paid to preference shareholders and ordinary shareholders under each of
the following scenarios.
1. The preference shares are non-cumulative, and the company has not missed any dividends in
previous years.
The dividend paid to preference shareholders
The dividend paid to ordinary shareholders

2. The preference shares are non-cumulative, and the company did not pay a dividend in each of
the two previous years.
The dividend paid to preference shareholders
The dividend paid to ordinary shareholders

3. The preference shares are cumulative, and the company did not pay a dividend in each of the
two previous years.
The dividend paid to preference shareholders
The dividend paid to ordinary shareholder

Question 8
Each of the items below must be considered in preparing a statement of cash flows for Aksu Co.
for the year ended December 31, 2014. For each item, state how it should be shown in the
statement of cash flows for 2014.
(a) Issued bonds for

150,000 cash.

(b) Purchased equipment for

(c) Sold land costing

200,000 cash.

50,000 for

(d) Declared and paid a

50,000 cash.

20,000 cash dividend.

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 4 of 10

Question 9
The three accounts shown below appear in the general ledger of Chaudry Co. during 2014.
Equipment
Date

Debit

Jan. 1

Balance

July 31

Purchase of equipment

70,660

Sept. 2

Cost of equipment constructed

51,200

Nov. 10

Cost of equipment sold

Credit

Balance
160,620
231,280
282,480

51,420

231,060

Credit

Balance

Accumulated DepreciationEquipment
Date

Debit

Jan. 1

Balance

71,840

Nov. 10

Accumulated depreciation on equipment sold

Dec. 31

Depreciation for year

28,380

43,460
21,240

64,700

Credit

Balance

Retained Earnings
Date

Debit

Jan. 1

Balance

104,290

Aug. 23

Dividends (cash)

Dec. 31

Net income

16,700

87,590
67,250

154,840

From the postings in the accounts, indicate how the information is reported on a statement of cash
flows using the indirect method. The loss on disposal of plant assets was $5,650. (Hint: Cost of
equipment constructed is reported in the investing activities section as a decrease in cash of
$51,200.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in
parenthesis e.g. (15,000).)
CHAUDRY CO.
Partial Statement of Cash Flows
For the Year Ended December 31, 2014

$
Adjustments to reconcile net income to

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 5 of 10

Question 10
Zermatt Corporation began operations on April 1 by issuing 51,400 CHF3 par value ordinary
shares for cash at CHF13 per share. On April 19, it issued 2,000 ordinary shares to attorneys in
settlement of their bill of CHF29,200 for organization costs.
Journalize both issuances, assuming the shares are not publicly traded. (Record entries in the
order displayed in the problem statement. Credit account titles are automatically
indented when amount is entered. Do not indent manually.)
Date

Account Titles and

Explanation

Debit

Credit

Question 11
Raymond Corporation has retained earnings of 3,484,830 on January 1, 2014. During the year,
Raymond earned 1,239,790 of net income. It declared and paid a 155,960 cash dividend. In
2014, Raymond recorded an adjustment of 80,168 due to the overstatement (from mathematical
error) of 2013 depreciation expense.
Prepare a retained earnings statement for 2014. (List items that increase retained earnings
first.)
RAYMOND CORPORATION
Retained Earnings Statement
For the Year Ended December 31, 2014

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 6 of 10

Question 12
On January 1, 2014, Leonard Corporation purchased 1,500 of treasury shares. Other information
regarding Leonard Corporation is provided below.
2013

2014

$198,900

$214,100

Dividends on preferred share

$34,300

$34,300

Dividends on ordinary share

$18,300

$25,200

Net income

Weighted-average number of ordinary shares outstanding

10,200

8,700

Ordinary shareholders equity beginning of year

$598,400

$744,700

Ordinary shareholders equity end of year

$744,700

$820,711

Compute return on ordinary shareholders equity for each year. (Round answers to 2 decimal
places, e.g. 10.50% or $10.50.)
2013
Return on ordinary shareholders equity

2014
%

Question 13
Jude Corporation has been authorized to issue 20,400 $101 par value, 10%, non-cumulative
preference shares and 1,109,016 no-par ordinary shares. The corporation assigned a $2.92 stated
value to the ordinary shares. At December 31, 2014, the ledger contained the following balances
pertaining to equity.
Share CapitalPreference
Share PremiumPreference

$105,040
29,660

Share CapitalOrdinary

1,109,016

Share PremiumOrdinary

1,663,800

Treasury SharesOrdinary (1,020 shares)

9,180

Share PremiumTreasury

1,020

Retained Earnings

80,200

The preference shares were issued for land having a fair value of $134,700. All ordinary shares

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 7 of 10

issued were for cash. In November, 1,530 ordinary shares were purchased for the treasury at a
per share cost of $9. In December, 510 treasury shares were sold for $11 per share. No dividends
were declared in 2014.

Prepare the journal entries for the: (Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
(1)
(2)
(3)
(4)

Issuance of preference shares for land.

Issuance of ordinary shares for cash.
Purchase of treasury shares (ordinary) for cash.
Sale of treasury shares for cash.

No. Account Titles and Explanation

Debit

Credit

1.

2.

3.

4.

Prepare the equity section at December 31, 2014.

JUDE CORPORATION
Statement of Financial Position (Partial)
December 31, 2014

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 8 of 10

:
$

Question 14
Sentry Company has had 4 years of retained earnings. Due to this success, the market price of
its 491,000 $4 par value ordinary shares has increased from $15 per share to $51. During this
period, share capital and share premium remained the same at a total of $2,313,500. Retained
earnings increased from $1,846,800 to $12,091,900. CEO T. Boldt is considering either a 15%
share dividend or a 2-for-1 share split.

He asks you to show the before-and-after effects of each option on retained earnings.
Retained earnings after share dividend
Retained earnings after share split

$
$

He asks you to show the before-and-after effects of each option on total equity.
Total equity after share dividend
Total equity after share split

$
$

He asks you to show the before-and-after effects of each option on outstanding shares and par
value per share.
After Dividend

After Split

Outstanding share
Par value per share

Question 15
Condensed financial data of Sinjh Ltd. follow.
SINJH LTD.
Comparative Statements of Financial Position
December 31
Assets
Equipment

2014

2013

$264,720

$242,980

Accumulated depreciationequipment

(46,490 )

(51,840 )

Long-term investments

139,280

114,730

29,280

25,270

Prepaid expenses

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 9 of 10

Inventory

111,460

102,910

91,980

33,940

104,800

47,070

$695,030

$515,060

$219,350

$174,160

Retained earnings

231,110

106,480

Bonds payable

117,080

149,560

Accounts payable

111,060

67,710

16,430

17,150

$695,030

$515,060

Accounts receivable
Cash
Total
Equity and Liabilities
Share capitalordinary

Accrued expenses payable

Total

SINJH LTD.
Income Statement
For the Year Ended December 31, 2014
Sales revenue

$392,750
4,760

Gain on disposal of plant assets

$397,510

Less:
Cost of goods sold

135,940

Operating expenses, excluding depreciation

11,260

Depreciation expense

45,450

Income tax expense

26,820
4,290

Interest expense

223,760
$173,750

Net income
Additional information:

1. New equipment costing $80,280 was purchased for cash during the year.
Old equipment having an original cost of $58,540 and accumulated depreciation of 50,800 was
2.
sold for $12,500 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $49,120 was declared and paid during the year.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease
cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SINJH LTD.
Statement of Cash Flows
For the Year Ended December 31, 2014

$
Adjustments to reconcile net income to

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014

Print Assignment: Assignment 4 ::true

Page 10 of 10

http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?numberQuest=tr... 11/11/2014