ACCT 2121 PAL Session 11/6: Exam #3 Review

BOBS Corporation has 28,000 shares of common stock outstanding and 9,000 shares $18 par value 2% preferred stock outstanding. Dividends were not paid for the last two years. BOBS corporation has $65,000 to distribute in the form of dividends. Calculate dividends distributed to common stockholders assuming the preferred stock is cumulative.

• $9,720

• $55,280

• $6,480

• $58,520

On April 1st, 2023, BOBS Corporation signed a $36,000, 4% note, maturing January 1st, 2024. What is the adjustment made on December 31st, 2023?

• $1,440

• $120

• $1,080

• $960

Miller corporation has 3,000,000 shares authorized. They also have 45,000 shares of stock issued and 9,000 shares of treasury stock. How many shares outstanding do they have?

• $1,054,000

• $54,000

• $1,036,000

• $36,000

Equipment was purchased for $110,000 on January 1st, 2022. Freight charges were $3,000, and it cost $9,000 to install the equipment. It is estimated the equipment will have a salvage value of $6,000 at the end of it’s 5-year useful life. What would be the amount of accumulated depreciation on December 31, 2023 using the straight line method?

• $23,200

• $46,400

• $20,800

• $41,600

Miller Corporation is selling equipment that they originally purchased for $72,000. The total amount of accumulated depreciation on this equipment is $64,000. BOBS Corporation ends up selling the equipment for $11,000. Did they get a gain or loss on disposal of PPE and by how much?

• $3,000 gain

• $3,000 loss

• $8,000 gain

• $8,000 loss

On October 1st, year 1 Miller Corporation borrowed $115,000 from a bank. BOBS Corporation issued a note payable that had a one-year term and an annual interest rate of 5%.

What accounting entry would be made on October 1st?

• Cash increases $115,000, notes payable increases $115,000

• Cash decreases $115,000, notes receivable increases $115,000

• Cash increases $5,750, interest payable increases $5,750

• Cash increases $120,750, interest payable increases $5,750, notes payable increases $115,000

Which of the following is NOT an intangible asset?

• goodwill

• patent

• inventory

• trademark

Equipment was purchased for $65,000 on March 1st, 2021. Freight charges were $5,000, and it cost $8,000 to install the equipment. It is estimated the equipment will have a salvage value of $8,000 at the end of it’s 5-year useful life. What would be the amount of accumulated depreciation on December 31, 2021 using the straight line method?

• $14,000

• $11,666.67

• $1,166.67

• $7,000

BOBS corporation sold 14,000 shares of common stock of $12 par value for $18 per share. How much would their additional paid-in-capital account increase?

• $168,000

• $252,000

• $84,000

• $26,000

________ is when a corporation buys back some of

its issued stock from the public.

• issued

• treasury

• authorized

• outstanding