1.

Acme Co. issued on May1, $ 60,000, 6%, 120day N/P to Still Co. Assume that the fiscal year
of Acme Co. ends June 30. What is the amt. of
interest exp in the current fiscal year? 600

2.

business borrowed $60,000 on March 1 of the

current year by signing a 60 day, 6% interest
bearing note. When the note is paid on April
30, the entry to record the payment should
include a D: interest payable $600

3.

County Bank agrees to lend the Starkwood

$200,000 on January 1. Starkwood signs a
$200,000, 9%, 9month note. What is the
adjusting entry required if Starkwood prepares
financial statements on June 30? D:IE
9k,C:IP 9k

4.

An employee receives an hourly rate of $50,

with time and a half for all hours worked in
excess of 40 during a week. Payroll data for
the current week are as follows: hours worked,
46; federal income tax withheld, $700;
cumulative earnings for year prior to current
week, $99,700; social security tax rate, 6.0%
on maximum of $100,000; and Medicare tax
rate, 1.5% on all earnings. What is the gross
pay for the employee? $22450

5.

An employee receives an hourly rate of $50,

with time and a half for all hours worked in
excess of 40 during a week. Payroll data for
the current week are as follows: hours worked,
46 federal income tax withheld, $700;
cumulative earnings for year prior to current
week, $99,700; social security tax rate, 6.0%
on maximum of $100,000; and Medicare tax
rate, 1.5% on all earnings. What is the net
amount to be paid empee? 1695.25

6.

Salaries exp (13,000) SS/Med (975) income

tax (2600) retirement savings (500)
SUTA/FUTA 6.2% (4000):
The entry to record the accrual of employers
payroll taxes would include a D:Pay tax
exp for $1223

7.

Salaries exp (30,000) SS/Med (2250) income

tax (6000) retirement savings (1000)
SUTA/FUTA 6.2% (8000):
The entry to record the accrual of employers
payroll taxes would include a D; pay to exp
2746

8.

Gross (20k) ss(6%) med (1.5%) FIT (3k) futa (.8%) suta
(5.4%) Salaries Payable would be recorded for: 1550
All wages are subject to FUTA/SUTA, payroll taxes
expense would be recorded for $2740
On October 30, Seba co. issued a 90 day note
with a face amount of $ 60,000 to Reyes
Products for merchandise inventory. Assuming
a 360 day year, determine the proceeds of the
note assuming the note is discounted at 8%
58,800

9.
10.

11.

The corporation provides for the issuance of

100,000 shares of common stock. Assume
that 40,000 shares were originally issued and
5,000 were subsequently reacquired. What is
the number of shares outstanding? 35000

12.

The journal entry to issue 1,000,000 shares of

$5 par common stock for $7.00 per share on
January 2nd would be: D:7m, C: common
stock 5m, paid in ex par: 2m

13.

When Bunyan was formed on January 1, 20xx,

the charter provided for 100,000 share of $10
par value common stock. The following
transaction was among those engaged in by

21. On January 1, 2015, the Baker Corporation issued 8%

bonds with a face value of $ 100,000. The bonds are sold
for $ 96, 000. The bonds ay interest semiannually on June
30 and December 31 and the maturity date is December
31, 2024 ( 10 year bonds). Baker records straight line
amortization of bond discount or premium. Using this
information, answer questions 21 to 24 bond issue was
at discount or at 96
22. Amoritization: discount, $200 in each semiannual
period
23. Bond interest expense for the year ended dec. 31:
8400
24. Interest rate on this bond is lower than market
rate
25. A company issued $ 1,000,000 of 8% bonds at 105 on
January 1, 2015. The term of the bonds is 10 years. Interest
is paid semiannually on June 30 and December 31. The
company uses straightline amortization for bond premium
or discount. Amount of cash received from the sale is:
1,050,000
26. Bond interest expense on each semiannual payment:
$37,500
27. Interest rate on this bond is higher than market rate
28. Bonds payable has a balance of $ 1,000,000 and
Premium on Bonds payable has a balance of $ 7000. If the
issuing corporation redeems the bonds at 101 what is the
amount of gain or loss on redemption? 3000 loss
29. Bond interest charge = income before taxes + interest
expense/int. exp
30. Earnings per share= net income preferred
dividend/avg # of com shares outstanding
31. Quick ratio=quick assets/current liabilities (quick:
cash,a/r)(cur: current portion debt, a/p)
32. Outstanding=issued bought back, issue share price=
par + excess
33. Maturity value/int bear mature: $x%xDNP/360=A, $
+A= MV
34. Interest expense: $x%xsubtracted date/360= IE
35. Interest revenue: $x%xDNP/360=A, $x%xsubtracted
date/360=B, amount A amount B = IR
36. Discount maturity value same as money amount
37. Discount cash proceeds: $x%xDAY/360=A, $-A=
discount cash proce
38. Adjusting etry is for interest expense
39. Interest bearing note paid: D. interest exp C:interest
payable
40. Converting an existing a/p: D: a/p C: n/p
41. Borrowing funds for business: D: cash C: n/p
42. Discounted note borrowing funds: D: cash, ie, C: n/p
43. Payment of discounted note: D: n/p C; cash
44. Payment of ordinary note: D:n/p, ie, C: cash
45. Payment of interest bearing note: D: n/p, ie, C: cash
46. Salaries payable: credit entry you make to pay
employees
47. Payroll tax expense: debit entry for 4 taxes employers
pay D: exp C:4
48. Treasury stock: D: cash, C: stock and paid in cap
49. Above par: D: cash, C: paid-in-cap excess of par
50. Declaration of cash dividends: D: retained earnings, C:
cash
51. The par value per share of common stock represents
the dollar amount assigned to each share.
52. Treasury stocks reduces OE by the amount in the
account
53. Dividend paid= outstanding shares x dividend shares
54. Dividend comes out of retained earnings, div goes to
preferred first
55. Preferred: %xPar=$/share, total div to pref: # of prefd
shares x $/share
56. Common: co. declare div prefd div, or com
div/sh=com div/# of com
57. Stock div= %x already issued sh. : value of stock div=
stk div x mark$
58. Treasury stock account will be shown at cost: sales
price= # of purchased share x price per share = cost
59. Treasure stock at cost= # of shares x $price per share
60. Common stock + Par +RE (if deficit subtract) Treasury
stock
61. Bond= 100 up(premium) down(discount)
62. Amoirtization: s1: difference of bond sold from face
value=A, s2:find # of years x 2= B, s3: A/B
63. Interest expense: 2 scenarios: if discount, difference in
face value + amoritization = year, (diff in face value
+amor)x2= 1 year
if premium: difference in face value amor = year, (diff
in face value amor) x 2= 1 year
64. Net pay= gross FIT-SS.-MED , OT= 1.5, discounted
note all interest in subtracted up front