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Yaeger FAR > 15 Wrong Answers > Flashcards

15 Wrong Answers Flashcards

0
Q

What is the journal entry under the cost method for a company to resell shares of their treasury stock at a gain?

A

Cash. Xxx
T/S. Xxx
PiC- T/S transactions. Xxx

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1
Q

What is the journal entry under the cost method for a company to buy there own stock?

A

Treasury stock. Xxx

Cash. Xxx

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2
Q

What is the journal entry under the cost method for a company to resell shares of their treasury stock at a loss?

A

Cash. Xxx
Retained earnings Xxx
Treasury Stock. Xxx

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3
Q

What is the journal entry under the par value method for a company to repurchase shares of their stock at a loss?

A

Treasury Stock. Xxx
PiC- excess of par value. Xxx
Retained Earnings. Xxx
Cash. Xxx

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4
Q

What is the journal entry under the par value method for a company to repurchase shares of their common stock at a gain?

A

Treasury stock. Xxx
PiC- excess of par. Xxx
PiC- from T/S transactions. Xxx
Cash. Xxx

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5
Q

What is the journal entry under the par value method for a company to resell shares of their treasury stock at a gain?

A

Cash. Xxx
Treasury stock. Xxx
PiC- excess of par value. Xxx

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6
Q

What is the journal entry under the par value method for a company to resell shares of their treasury stock at a loss?

A

Cash. Xxx
Treasury stock Xxx
PiC- excess par value. (Up to amount dr. When T/S where purchased, if loss is larger than debit R/E)

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7
Q

What is the entry to record scrip dividends, that will be paid in the future?

2) if the dividends are due a year later in June, when is the first entry to accrue interest expense?

A

R/E. Xxx
Script dividends payable. Xxx

2) 12/31/yx

Interest exp. Xxx
Interest. Payable. Xxx

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8
Q

Dividend payout ratio calculation

A

Dividend payout = Dividends per share/EPS

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9
Q

What kind of ratio is book value of common stock?

A

Liquidation ratio

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10
Q

Book value of common stock ratio calculation

A

BV common stock =

Common stockholder’s equity/Common shares outstanding

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11
Q

Rate of return on common stockholder’s equity calculation

A

Rate of return on common stockholder’s equity =

Net income available to common stockholder’s/
avg. common stockholder’s equity

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12
Q

Debt to equity ratio calculation

A

Debt to equity = total liabilities/stockholder’s equity

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13
Q

What is the journal entry to exercise stock rights?

A

Cash. Xxx
Common stock Xxx
PiC. Xxx

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14
Q

What is the journal entry to appropriate retained earnings?

A

RE (or unappropriated RE). Xxx

Reserve for RE (or appropriated RE). Xxx

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15
Q

Journal entry How are assets written down in a quasi reorganization?

A

Retained earnings. Xxx

Assets. Xxx

16
Q

The journal entry to eliminate the deficit in quasi reorganization?

A

PiC. Xxx

R/E. Xxx

17
Q

Journal entry in quasi reorganization when PiC is insufficient to eliminate the retained earnings deficit?

A

Existing PiC. Xxx
Common stock. Xxx
Retained earnings. Xxx
PiC from quasi reorganization Xxx

18
Q

Paid in capital from quasi reorganization, where does it come from?

A

Reduction of common stock par value

19
Q

When converting from the preferred stock to common stock, using the book value method…

2) what is PiC- common stock based on?

A

The market value is ignored

2) the plug of preferred stock (par and PiC) - common stock at par

20
Q

When an issuance of debt contains detachable warrants, the total proceeds from sale should be allocated to Beth debt and detachable warrant, this treatment arises due to…

A

Separability of the stock and detachable warrants

21
Q

When an issuance of debt contains detachable warrants, the total proceeds from sale should be allocated to Beth debt and detachable warrant, the allocation of proceeds is based on…

A

The relative fair values of both the debt and the warrants

22
Q

When an issuance of debt contains detachable warrants, the total proceeds from sale should be allocated to Both debt and detachable warrant. However, in instances where only one of the fair values is known, the known fair value will…

A

Be used to allocate proceeds to the security where the fair

Value is determinable

23
Q

When no par common stock is sold on subscription basis at a price above the stock’s stated value, the stock is not issued until…

A

The full subscription price is received

24
Q

Journal entry for par common stock sold on subscription basis on subscription contract date (include how amounts are determined)

A

Cash. (Amount received if any)
Subscription receivable. (Balance due)
Common stock subscribed (Stated value)
Additional paid in capital. (Plug)

25
Q

Journal entry for par common stock sold on subscription basis on date balance subscription is collected and the common stock is issued (include how amounts are determined)

A

Cash. (Balance due)
Common stock subscribed (Stated value)
Common stock. (Stated value)
Subscriptions receivable. (Balance due)

26
Q

Under the cost method, what is the journal entry to reissue 3,000 shares at $50, when they had been previously purchased for $36?

A

Cash. (3,000 x $50)
T/S. (3,000 x $36)
PiC. (3000 x (50-36))

27
Q

Treasury stock is not a current asset, but a…

A

Reduction in stockholder’s equity

28
Q

What is the journal entry for a stock dividend of less that 20%?

A

Retained earnings. Xxx
CS dividend distr. Xxx
Paid in Capital. Xxx

29
Q

When a stock dividend is declared…

A

No asset or liability has been affected

30
Q

The rate of interest used to discount both the exercise price and dividends is…

A

The risk free rate of interest

31
Q

How is dividend in arrears reported?

A

Disclosure (not an accrued liability)

32
Q

Bankruptcy law requires that the claims of secured creditors be satisfied before…

A

Any unsecured claims are paid

33
Q

Amounts of claims exceeding the liquidation amounts are…

A

Unsecured claims

34
Q

The if converted method of computing earnings per share assumes conversion of convertible security as of the…

A

Beginning of earliest period reported or at time of issuance to if later

35
Q

If shares (contingent common shares) are required to be issued in a business deal 18 months later, should they be included in the weighted avg. of shares in the diluted EPS equation?

A

Yes

Yaeger FAR (59 decks)

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