On December 31, 2015, Raleigh Corp. had the following balances
Note: It is recommended that you save your response as you complete each question.
Directions: This quiz tests how well you understood the concepts covered in Weeks 1 - 7.
The first half of the exam features 7 questions with short answers and calculations. For these, omit all general journal entry explanations. Be sure to include correct dollar signs, commas, underlines and double underlines where required.
The second half of the exam consists of 20 multiple-choice questions worth 1 point each.
The computer will automatically grade the multiple-choice questions, but grading will not be complete until your instructor manually grades the short-answer questions. Your instructor may grant partial credit on short- answer questions for less than complete answers.
You can take the final exam only once. You can save each question after answering, and you can save the exam before submitting. Once you have submitted the exam, you will receive a score and be able to compare your answers to the correct answers.
Section 1: Calculations
Section 1 Instructions
To submit your answers for questions 1-6 of the exam, fill in the answer sheet and upload it to the exam.
Download and Save: Final Exam Answer Sheet to work out your answers for questions 1-6.
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Omit all general journal entry explanations. Be sure to include correct dollar signs, commas, underlines, and double-underlines where required.
Question 1 (30 points)
On December 31, 2015, Raleigh Corp. had the following balances (all balances are normal):
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding)
Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding)
Paid-in Capital in Excess of par, Common
The following events occurred during 2015 and were not recorded:
a. On January 1, Raleigh Corp. declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends were distributed on January 31 to shareholders as of January 25.
b. On February 15, Raleigh Corp. reacquired 1,000 shares of common stock for $20 each.
c. On March 31, Raleigh Corp. reissued 250 shares of treasury stock for $25 each.
d. On July 1, Raleigh Corp. reissued 500 shares of treasury stock for $16 each.
e. On October 1, Raleigh Corp. declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15.
f. On December 15, Raleigh Corp. split common stock 2 shares for 1.
g. Net Income for 2015 was $275,000.
a. Prepare journal entries for the transactions listed above.
b. Prepare a Stockholders' section of a classified balance sheet as of December 31, 2015.
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Question 2 (6 points)
On January 1, 2016, XYZ Company purchased 10,000 shares of the stock of Rayco, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $90,000, and represents a 30% ownership stake. Rayco made $25,000 of net income in 2014, and paid dividends of $10,000. The price of Rayco's stock increased from $10 per share at the beginning of the year, to $12 per share at the end of the year.
a. Prepare the January 1 and December 31 general journal entries for XYZ Company.
b. How much should the XYZ Company report on the balance sheet for the investment in Rayco at the end of 2016?
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Question 3 (10 points)
The following is selected information from Reliant Company for the fiscal years ended December 31, 2016: Reliant Company had net income of $1,225,000. Depreciation was $500,000, purchases of plant assets were $1,250,000, and disposals of plant assets for $500,000 resulted in a $50,000 gain. Stock was issued in exchange for an outstanding note payable of $725,000. Accounts receivable decreased by $25,000. Accounts payable decreased by $40,000. Dividends of $300,000 were paid to shareholders. Reliant Company had interest expense of $50,000. Cash balance on January 1, 2016 was $250,000.
Requirements: Prepare Reliant Company's statement of cash flows for the year ended December 31, 2016 using the i
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