Accounting 1 questions. 1. On November 1, Minerva borrowed from Albas, giving him a $24,000, 3 mo…
accounting 1 questions.
1. On November 1, Minerva borrowed from Albas, giving him a $24,000, 3 month, 9% note, interest payable at maturity. Minerva made no entry after November 1.
On December 31, the end of the accounting period, what entry would Minerva make?
Select one:
A.
Interest Payable
360
Discount on Notes Payable
360
B.
Interest Expense
360
Interest Payable
360
C.
Interest Payable
360
Interest Expense
360
D.
Interest Expense
360
Cash
360
2. If a company issues 10,000 shares of $4 par value common stock at a market price of $60 per share, which of the following is the correct balance sheet entry?
Select one:
A. Increase cash by $600,000 and increase paid-in capital by $600,000
B. Increase revenues by $600,000
C. Increase common stock and cash by $40,000
D. Increase cash by $600,000 and increase retained earnings by $600,000
3. CherokeeCloud, Inc., issued for $38 per share 5,000 shares of $20 par value common stock.
The journal entry to record this transaction is:
Select one:
A.
Cash
190,000
Common Stock
100,000
Retained Earnings
90,000
B.
Cash
190,000
Common Stock
100,000
Gain on Sale of Stock
90,000
C.
Cash
190,000
Common Stock
190,000
D.
Cash
190,000
Common Stock
100,000
Paid-in Capital in Excess of Par Value
90,000
4. On September 1, 2016, Caroline Companys balance sheet indicates there are 1,200,000 shares of $60 par value common shares in the Common Stock account and $9,000,000 in the Additional Paid-in Capital account. There are 2,000,000 shares authorized. On September 2, Caroline splits its stock 2 for 1.
What is the dollar balance of Carolines common stock account immediately after the stock split?
Select one:
A. $ 72,000,000
B. $ 18,000,000
C. $144,000,000
D. $ 36,000,000
5. Which of the following is an organizational disadvantage of a corporation?
Select one:
A. Relative ease of ownership transfer
B. Taxable entity
C. Limited liability of owners
D. Separate legal entity
6. Which best describes par value for stock?
Select one:
A. The current market value of the stock
B. An arbitrary amount set by the company for each share of stock
C. The amount expected to be paid out as a dividend on a share of stock
D. The value at which stock shares were issued
7. In what section of the stockholders’ equity portion of the balance sheet can preferred stock, common stock, and additional paid-in capital be found?
Select one:
A. Retained earnings
B. Earned capital
C. Paid-in capital
D. Treasury stock
8. During May, 2016, Nevling Outdoor Corporation announced a 3-for-1 forward stock split. This brought the number of shares outstanding from 25,792,000 shares to _____ shares, and its $1.80 par value to _____ per share.
Select one:
A. 77,376,000; $5.40
B. 77,376,000; $0.60
C. 8,597,334; $5.40
D. 8,897,334; $0.60
9. In October, 2016, Big RedCorporation distributed profits to its preferred shareholders before its common shareholders. What is the name of the preference that allows this?
Select one:
A. Dividend preference
B. Asset distribution preference
C. Treasury preference
D. Profits preference
10. On January 1, 2016, Pelino, Inc. issued $800,000, 10-year, 8% bonds for $700,300. The bonds pay interest on June 30 and December 31. The market rate is 10%. How much is the interest expense on the bonds for the first interest payment on June 30, 2016?
Select one:
A. $35,015
B. $32,000
C. $70,030
D. $64,000
11. Assume that Vance earns $24 per hour and he worked 40 hours this week. The Social Security rate is 6.2% and the Medicare rate is 1.45%, and his entire earnings are subject to both FICA taxes. Also, $120 in income taxes and $40 of union dues are withheld.
Vance’s net take-home pay should be:
Select one:
A. $738.80
B. $726.56
C. $640.00
D. $800.00
12. Which of the following is not a payroll tax on wages or salaries?
Select one:
A. Federal Unemployment tax
B. Federal product excise tax
C. State unemployment tax
D. FICA tax
13. Which of the following is an organizational advantage of a corporation?
Select one:
A. Legal entity separate from the owners
B. Nontaxable entity
C. Limited ability to raise capital
D. Unlimited liability of owners
14. Which of the following statements is correct?
Select one:
A. A corporation’s outstanding stock may exceed its authorized stock.
B. A corporation’s treasury stock may exceed its issued stock.
C. A corporation’s issued stock may exceed its outstanding stock.
D. A corporation’s issued stock may exceed its authorized stock.
15.
Question text
A firm has the following monthly payroll for June, 2016:
Total salaries
$120,000
Salaries subject to FICA taxes (6.2% + 1.45%)
120,000
Salaries subject to FUTA (0.8%) and state unemployment taxes (2.7%)
28,000
Income taxes withheld
10,800
In recording the payroll, the net payroll payable is:
Select one:
A. $ 81,200
B. $ 99,040
C. $100,020
D. $ 97,200
