Exam 2: Intermediate Accounting Volume 2

Rome Corp.was organized on January 1, 2014, with the following authorized share capital: 20,000 common shares, no par value 6,000, $.05, cumulative preferred shares, no par value During 2014, the corporation issued 10,000 common shares for $350,000 and 5,000 preferred shares at $24 per share.On December 20, 2014, subscriptions for 1,000 preferred shares were taken at a purchase price of $30.These subscribed shares were paid for on January 2, 2015. What should Rome report as total contributed capital on its December 31, 2014, balance sheet?

Future income taxes Nevada Corp., at the end of 2014, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows: Estimated warranty expenses of $530,000 will be deductible in 2015, $200,000 in 2016, and $70,000 in 2017.The use of the depreciable assets will result in taxable amounts of $200,000 in each of the next three years. The enacted tax rate is 30% and is not expected to change. Instructions a.Prepare a schedule of the future taxable and deductible amounts. b.Prepare the required adjusting journal entries to record income taxes for 2014.

Asbestos Corp.is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals. Asbestos's lawyer states that it is likely the corporation will lose the suit and be found liable for a judgement which may cost Asbestos anywhere from $300,000 to $1,500,000.However, the lawyer states that the most likely cost is $900,000.As a result of the above facts, using ASPE, Non-Financial and Current Liabilities 13- 21 Asbestos should accrue

On July 1, 2014, Tilapia Corp.had outstanding 8%, $1,000,000, 15-year bonds maturing on June 30, 2024.Interest is payable semi-annually on June 30 and December 31.Assume all appropriate entries had been prepared and posted at June 30, 2014.The carrying value of the bond at June 30, 2014 was $965,000.At this time, Tilapia purchased all the bonds at 94 and retired them.What is the gain or loss on this early extinguishment of debt?

When the interest payment dates of a bond are May 1 and November 1, and a bond issue is sold on June 1, the amount of cash received by the issuer will be

Use the following information for questions. The following data are provided for Croatia Corp.'s last two fiscal years: Shareholders' Equity 15- 27 Additional information: On May 1, 2015, 6,000 common shares were issued.Although dividends had been declared regularly up to December 31, 2014, preferred dividends were NOT declared during 2015.The market price of the common shares was $100 at December 31, 2015. -The price earnings ratio for 2015 is

How would the declaration of a 15% stock dividend affect each of the following?

Note disclosures for long-term debt generally include all of the following EXCEPT

Which of the following may NOT be accrued as a contingent liability?

Accounting for GST includes

Payroll entries The total payroll of Lyndon Inc.was $230,000.Income taxes withheld were $55,000.The EI rate is 1.83% for the employee and 1.4 times the employee premium for the employer.The CPP/QPP contributions are 4.95% for both the employee and employer. Instructions (Round all values to the nearest dollar, if necessary) a.Prepare the journal entry for the wages and salaries paid. b.Prepare the entry to record the employer payroll taxes. Non-Financial and Current Liabilities 13- 29

On January 1, 2014, Varden Ltd.issued $4,000,000, 10% bonds, which mature on January 1, 2024.The bonds were issued for $4,540,000 to yield 8%.Varden uses the effective interest method of amortizing bond premium.Interest is payable annually on December 31.At December 31, 2014, the adjusted balance in the Bonds Payable account should be

Emily Corp.owned shares in Carr Ltd.On December 1, 2014, Emily declared and distributed a property dividend of Carr shares when their fair value exceeded the carrying amount.As a consequence of the dividend declaration and distribution, the accounting effects Shareholders' Equity 15- 37 would be

Cash dividends are paid on the basis of the number of shares

When valuing financial instruments at fair value (the fair value option),

The debt to total assets earned ratio measures

Browning Company's salaried employees are paid biweekly.Information relating to salaries for the calendar year 2014 is as follows: At December 31, 2014, what amount should Browning report for accrued salaries payable?

The numerator of the acid-test ratio consists of

Use the following information to answer questions Prague Corp.is authorized to issue 400,000 no par value common shares.Subscribers agree to purchase shares at $15 per share with a 30% down payment. -Presented below is information related to Madrid Corporation: The total amount that will be added to the Common Shares account when the final subscriptions are received will be

Sales taxes For the month of November, Parry Sound Sales Ltd.recorded $280,000 in sales, 40% of which were on account (terms N30), and 60% of which were cash sales.The company is required to charge 6% PST and 5% GST on all sales. Instructions Prepare one journal entry to record the company's sales for November.