Bonds that contain a provision that allows the issuing corporation to buy back the bonds prior to the maturity date are called

The board of directors of Irondale Corporation declared a cash dividend of $2.50 per share on 57,000 shares of common stock on June 14, 20x7. The dividend is to be paid on July 15, 20x7, to shareholders of record on July 1, 20x7. The proper entry to be recorded on June 14, 20x7,will include a

Shares of treasury stock are

A) issued shares that have been bought back by the corporation and are being held by the corporation.

B) shares held by the U.S. Treasury Department.

C) part of the total outstanding shares but not part of the total issued shares of a corporation.

D) unissued shares that are held by the treasurer of the corporation.

A symbol or name used to identify a product or service is called a

A) copyright.

B) patent.

C) trademark.

D) license.

Bonds that contain a provision that allows the holders to exchange the bonds for other securities of the issuing corporation are called

If the market interest rate is higher than the face interest rate at the date of issuance, bonds will

Which of the following would be considered a revenue expenditure?

A) Cleaning the ink from a printing press

B) Addition of a storeroom

C) Purchase of office furniture

D) Installation of audiovisual equipment in a classroom

Which of the following would be considered a capital expenditure?

A) A truck tune-up

B) Machine maintenance

C) Installation of a solar heating system

D) Painting a room

The exclusive right to publish and sell a literary, artistic, or musical work is called a

The maximum number of shares of common stock that may be issued according to the corporation's charter is referred to as

If the indirect method is used to prepare a statement of cash flows, which of the following would be added to net income to arrive at net cash flows from operating activities?

A) Decrease in accounts payable

B) Increase in inventory

C) Decrease in prepaid expenses

D) Increase in accounts receivable

If the indirect method is used to prepare a statement of cash flows, which of the following would be deducted from net income to arrive at net cash flows from operating activities?

A truck is purchased for $35,000. It has a five-year life and a $5,000 residual value. Under the straight-line method, what is the asset's carrying value after three years?

A) $23,000

B) $17,000

C) $12,000

D) $18,000

 Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements—Depreciation Expense—indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

A) Add to net income to arrive at net cash flows from operating activities

B) Subtract from net income to arrive at net cash flows from operating activities

C) Not used to adjust net income to calculate net cash flows from operating activities

Hernandez Corporation has 60,000 shares of $10 par value common stock outstanding. The following transactions occurred during the year:On March 17th we declared a 10% stock dividend to stockholders of record on March 20th. The market value of the stock was $13 on March 17th

A) credit to Common Stock Distributable for $60,000.

A ten-year bond has a face value of $10,000, a face interest rate of 11 percent, an unamortized bond premium of $400, and an effective interest rate of 10 percent. In the first semiannual interest payment period (assuming the effective interest method of amortization), the amount of premium amortization will be

A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1. Assume that the truck was disposed of for $2,000 cash. The entry to record this event would include a

A) credit to the Truck account for $3,000.

B) gain of $1,000.

C) loss of $1,000.

D) credit to Accumulated Depreciation for $9,000.

Royer Corporation engaged in this transaction: 

Issued common stock for cash.

Indicate which section, if any, each transaction would appear in, or relate to, on a statement of cash flows.

A) Operating activities section

B) Does not represent a cash flow

C) Investing activities section

D) Financing activities section

Royer Corporation engaged in this transaction: 

Retired long-term debt with cash.

Indicate which section, if any, each transaction would appear in, or relate to, on a statement of cash flows.

A) Operating activities section

B) Does not represent a cash flow

C) Investing activities section

D) Financing activities section

Royer Corporation engaged in this transaction:  

Issued stock for equipment. 

Indicate which section, if any, each transaction would appear in, or relate to, on a statement of cash flows.

A) Financing activities section

B) Operating activities section

C) Investing activities section

D) Schedule of noncash investing and financing transactions

The portion of a group purchase of land and a buildup for $630,000 allocated to land when the land is appraised at $170,000 and the building on the land is appraised at $510,000 is

A) $482,500.

B) $157,500.

C) $167,500.

D) $472,500.

Royer Corporation engaged in this transaction: 

Sold buildings and equipment for cash.

Indicate which section, if any, each transaction would appear in, or relate to, on a statement of cash flows.

A) Operating activities section

B) Investing activities section

C) Financing activities section

D) Does not represent a cash flow

Lester Company purchases a piece of equipment on Jan. 2, 20x7, for $30,000. The equipment has an estimated life of eight years or 50,000 units of production and an estimated residual value of $3,000. Lester uses a calendar fiscal year. The amount of depreciation to be recorded for 20x7, using the straight-line method, is

A) $3,750.

B) $3,375.

C) $2,500.

D) $2,250.

B) $3,375.

Lester Company purchases a piece of equipment on Jan. 2, 20x7, for $30,000. The equipment has an estimated life of eight years or 50,000 units of production and an estimated residual value of $3,000. Lester uses a calendar fiscal year. The amount of depreciation to be recorded for 20x7, using the double-declining-balance method, is

A) $4,500.

B) $5,000.

C) $5,500.

D) $7,500.

D) $7,500.

Beckham Corporation has 3,000 shares of $100 par value, 7 percent cumulative preferred stock, and 10,000 shares of $10 par value common stock outstanding during its first five years of operation. Beckham Corporation paid cash dividends as follows: 20x4, $14,500; 20x5, $0; 20x6, $65,000; 20x7, $30,000; 20x8, $15,000. The amount of dividends in arrears at the end of 20x5 was

A) $0.

B) $6,500.

C) $13,500

D) $27,500.

D) $27,500.

Lester Company purchases a piece of equipment on Jan. 2, 20x7, for $30,000. The equipment has an estimated life of eight years or 50,000 units of production and an estimated residual value of $3,000. Lester uses a calendar fiscal year. The amount of depreciation to be recorded for 20x7, using the production method and assuming that 6,800 units are produced, is

A) $3,400.

B) $3,536.

C) $3,672.

D) $3,808.

Beckham Corporation has 3,000 shares of $100 par value, 7 percent cumulative preferred stock, and 10,000 shares of $10 par value common stock outstanding during its first five years of operation. Beckham Corporation paid cash dividends as follows: 20x4, $6,500; 20x5, $0; 20x6, $65,000; 20x7, $30,000; 20x8, $15,000. The amount of dividends the common stockholders received during 20x4 was

A) $0.

B) $3,250.

C) $6,500.

D) $9,750.

Beckham Corporation has 3,000 shares of $100 par value, 7 percent cumulative preferred stock, and 10,000 shares of $10 par value common stock outstanding during its first five years of operation. Beckham Corporation paid cash dividends as follows: 20x4, $17,500; 20x5, $0; 20x6, $65,000; 20x7, $30,000; 20x8, $15,000. The amount of dividends received by the preferred stockholders during 20x6 was

A) $65,000.

B) $45,500.

C) $24,500.

D) $17,500.

Use this information to answer the following question.

Hernandez Corporation has 60,000 shares of $10 par value common stock outstanding. The following transactions occurred during the year:

On March 17th we declared a 10 percent stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17.

The stock dividend was distributed on March 30th. The entry to record the transaction of March 30 would include a

A) debit to Common Stock Distributable for $60,000.

B) debit to Retained Earnings for $18,000.

C) credit to Additional Paid-in Capital for $18,000.

D) credit to Cash for $60,000.

Lassen Corporation issued ten-year term bonds on January 1, 20x7, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. The entry on June 30, 20x7, to record the payment of interest and amortization of discount will include a

A) credit to Cash for $27,638.

B) credit to Unamortized Bond Discount for $3,638.

C) debit to Bond Interest Expense for $24,000.

D) debit to Bond Interest Expense for $32,000.

B) credit to Unamortized Bond Discount for $3,638.

Crowley Corporation purchased a building on January 2 by signing a long-term $600,000 mortgage with monthly payments of $5,500. The mortgage carries an interest rate of 10 percent. The entry to record the mortgage will include a

A) debit to the Mortgage Payable account for $500

B) credit to the Cash account for $5000.

C) debit to the Cash account for $5500.

D) credit to the Mortgage Payable account for $5500

A) debit to the Mortgage Payable account for $500