BA 212 ~ Final Exam Questions

The Final Exam is worth 75 points in total and covers chapters 13-17. The exam has been divided
between an online exam tool (similar to your weekly quizzes and like the Midterm ;o)) which consists
of 7 matching questions worth 40 points AND the below Essay/Problem questions that are worth 35
points. Pleas use Excel, Word or Both for you solutions. Call or text me if you have any questions or
concerns, #503-810-4723

Chapter 13 ~

1.) Using the following information, prepare the Stockholders’ equity section of the balance
sheet. Seventy thousand shares of common stock are authorized and 7,000 shares have been
reacquired. (Worth 6 Points) – Remember to use Statement format. Call me if you need have any
questions.

Common Stock, $75 par $4,725,000

Paid-in Capital in Excess of Par 679,000
Paid-in Capital from Sale of Treasury Stock 25,200
Retained Earnings 2,032,800
Treasury Stock 600,000

Stockholders’ Equity

Paid-in capital:

Common stock, $75 par (70,000 shares $4,725,000

authorized, 63,000 shares issued)

Paid-in Capital in Excess of Par 679,000 $5,404,000

Paid-in Capital from Sale of Treasury Stock 25,200

Total paid-in capital $5,429,200

Retained Earnings 2,032,800

Total $7,462,000

Deduct treasury stock $600,000

Total stockholders’ equity $6,862,000

Chapter 14 ~

2.) On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable
annually, were sold for $1,225,000. Present journal entries to record the following transactions
for the current fiscal year: (Worth 5 Points) – If you are confused on how to present journal
entries. CALL ME!!!

(a) Issuance of the bonds.

(b) First annual interest payment.
(c) Amortization of bond discount for the year, using the straight-line method of
amortization.

(a) Cash 1,225,000

Discount on Bonds Payable 275,000
Bonds Payable 1,500,000
(b) Interest Expense 120,000
Interest Payable 120,000
(c) Interest Expense 27,500
Discount on Bonds Payable 27,500

Chapter 15 ~

3.) Present entries to record the following selected transactions of Masterson Co. (Worth 6 Points) If
you are confused on how to present journal entries. CALL ME!!!

(a) Purchased 600 shares of the 100,000 shares outstanding $10 par common shares of
Dankin Corporation for $5,100.
Investment in Dankin Corporation Stock 5,100
Cash 5,100

(b) Purchased 3,500 shares of the 10,000 shares no par common shares of Ramon Co.
for $45,700. The investment was accounted for by the equity method.
Investment in Ramon Co. Stock 45,700
Cash 45,700

(c) Received a cash dividend of $1 per share on the Dankin Corporation stock acquired
in (a).
Cash 600
 Dividend Revenue 600

(d) Received a cash dividend of $2 per share on the Ramon Co. stock acquired in (b).
Cash 7,000
Investment in Ramon Co. Stock 7,000

(e) Sold 100 shares of the Dankin Corporation shares acquired in (a) for $2,100. (Hint:
you will need to record a gain or loss ;o)
Cash 2,100
Investment in Dankin Corporation Stock($5,100 / 6) 850
Gain on Sale of Investments 1,250

(f) Recorded the appropriate share of Ramon Company’s net income of $50,000. The
stock was acquired in (b). (Hint: remember to prorate to the number of total
shares listed in (b))
Investment in Ramon Co. Stock 17,500
Income of Ramon Co. ($50,000 x 35%) 17,500

Chapter 16 ~

4. Each of the events below may have an effect on the statement of cash flows. Designate how the
event should be reported within the statement of cash flows using the codes provided below.
Codes may be used more than once, or not at all. (Worth 10 Points) – Go slowly! ;o)

Codes
A. Investing activity; cash inflow
B. Investing activity; cash outflow
C. Financing activity; cash inflow
D. Financing activity; cash outflow
E. Operating activity; cash inflow
F. Operating activity; cash outflow
G. Noncash investing and financing activity

Events

__F___ 1. Paid the weekly payroll

___F__ 2. Paid an account payable

____C_ 3. Issued bonds payable for cash

 __D___ 4. Declared and paid a cash dividend

___B__ 5. Paid cash for a new piece of equipment

____D_ 6. Purchased treasury stock for cash

__B___ 7. Paid cash for stock in another company

___E__ 8. Received interest on a long-term bond investment

____E_ 9. Received cash for sales

__A___ 10. Sold a long-term stock investment for cash at book value

Chapter 17 ~

5. Income statement information for Sharif Corporation is provided below: (Worth 4 Points)

Sales $500,000
Gross profit 140,000
Net income 40,000

Required: Prepare a vertical analysis of the income statement for Sharif Corporation.

Amount Percentage
Sales $500,000 100% ($500,000/$500,000)
Gross profit 140,000 28% ($140,000/$500,000)
Net income $40,000 8% ($40,000/$500,000)

6. A Company reports the following:

Net sales $720,000

Average accounts receivable (net) $ 45,000

Determine the (a) accounts receivable turnover, and (b) number of days’ sales in receivables?
Round your answer to one digit after the decimal place. (Worth 4 Points)

(a) Accounts receivable turnover: 16.0

(b) Number of days’ sales in receivables: 22.8