ACCT 220 ACCT220 Quiz 3 Answers (UMUC)
- A company buys a new parcel of land. Which of the following items is properly debited to the land account?
- What type of asset is subject to depletion?
- Which is NOT an intangible asset?
- Which is NOT an advantage of a corporation compared with a partnership or sole proprietorship?
- If a corporation's stock is purchased by the corporation on the open market but is held in treasury and not retired, which of the following is correct?
- A company sells a fixed asset (equipment) for $30,000. The asset originally cost $80,000 and had accumulated depreciation of $55,000 at the time of the sale. Record the journal entry to recognize the sale.
- A company scraps a fully depreciated piece of equipment originally costing $20,000. They did not receive any proceeds. Record the journal entry.
- A company sells a piece of plant equipment for $2,000. The original cost was $10,000, and the accumulated depreciation through the date of the sale was $6,500. Record the journal entry.
- A company buys a new pickup truck for $35,000 on the first day of the month. They will assume a 5-year life with a salvage value equal to 10% of the original cost. Record the first monthly depreciation journal entry, assuming the company uses straight-line depreciation.
- A company sells 200,000 shares of newly issued common stock having a par value of $1 for $8.50 per share. Record the journal entry.
- A company has net income of $4,580,000. There are 200,000 shares of $50 par, 6% preferred stock outstanding and 800,000 shares of common stock. How is the net income split between common and preferred stockholders? Show your calculations.
- Finish the following statements
- Axelrod Company has a piece of equipment that was acquired for $600,000. The company estimated a residual (salvage) value of $30,000 at the end of its 10-year life. For each of 7 years, the company recorded Depreciation Expense using straight-line depreciation. What is the balance in Accumulated Depreciation for this equipment at the end of 7 years? Show your calculations.
- The Cagney Corporation uses double-declining depreciation (DDB) to depreciate its construction vehicles. Recently, the company bought a dump truck worth $180,000, with an estimated salvage (residual) value of $20,000.The truck is expected to last for 8 years. What is the amount of depreciation that will be recorded in the first year for this dump truck?
- We Deliver! Is a local delivery company. It uses the units of production method to depreciate its delivery trucks. The company bought a truck for $56,000. It is estimated that the truck will be sold after 5 years for $5,000, and will have 300,000 miles at the end of its useful life. In the first year, the truck was driven 62,000 miles and in the second year it was driven another 78,000 miles. What is the Net Book Value of the truck at the end of year 2? Show your calculations.
- A company has 800,000 shares of common stock outstanding and no preferred stock. On February 21, the board of directors declares a 25-cents-per-share dividend, payable on March 31 to shareholders of record as of March 15. Record the journal entry for the declaration of the dividend.
- A company has 800,000 shares of common stock outstanding and no preferred stock. On February 21, the board of directors declares a 25-cents-per-share dividend payable on March 31 to shareholders of record as of March 15. Record the journal entry for the payment of the dividend.
- A corporation has 50,000 shares of $10 par common stock. A 10% stock dividend is declared and the market value of the stock is $80 immediately before the declaration. Record the journal entry made on the date the dividend is declared but not paid.
- What is the difference between a stock split and a stock dividend?
- A company has 150,000 shares of common stock outstanding and 10,000 shares of $100 par value, 5% preferred stock outstanding. The company's net income was $387,500.
What are the earnings per common share? (Show your calculation.)
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