ACCT 551 Week 6 Quiz (2 Practice Versions)

Version 1

1. Question: (TCO A) On July 1, 2010, an interest payment date, $60,000 of Parks Co. bonds were converted into 1,200 shares of Parks Co. common stock, each having a par value of $45 and a market value of $54. There is $2,400 unamortized discount on the bonds. Using the book value method, Parks would record
2. Question: (TCO A) During 2010, Gordon Company issued three hundred $1,000 bonds at 104 (due in 10 years)……… accounted for as part of Gordon’s stockholders’ equity?
3. Question: (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $900. Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010. Quoted market ……. as follows:
4. Question: (TCO A) Sharon Inc. issued to its existing common stockholders 1000 warrants. Each warrant entitles the stockholder to purchase 2 shares of common stock at a price of $5 each. The common stock of the company is selling in the stock exchange at $10 each. If Wonderful has 29,000 shares of common stock outstanding throughout the year and its Net Income is $12,000 after paying the preferred dividends, what will be the dilutive EPS of Wonderful incorporation under treasury stock method? Round your answer to two decimal points.
5. Question: (TCO A) Foyle, Inc., had 560,000 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011, an additional 40,000 shares of common stock …….. Foyle also had unexercised stock options to purchase 32,000 shares of common stock at $15 per share outstanding at the beginning and end of 2011……….. earnings per share for the year ended December 31, 2011?
   

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Version 2

1. Question : (TCO A) When issuing convertible bonds, a company would record the bond issuance under i-GAAP as
2. Question : (TCO A) On March 1, 2010, Ruiz Corporation issued $800,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2030……………….. The bonds without the warrants would normally sell at 95. On March 1, 2010, the fair market value of Ruiz’s common stock was $40 per share and the fair market value of the warrants was $2.00. What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants?
3. Question : (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant……… Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010. Quoted market prices of Trent Co. stock during 2010 were as follows:
4. Question : (TCO A) On January 2, 2010, Farr Co. issued 10-year convertible bonds at 105. During 2012, these bonds were converted into common stock having an aggregate par value equal to the total face amount of the bonds. At conversion, the market price of Farr’s common stock was 50 percent above its par value. On January 2, 2010, cash proceeds from the issuance of the convertible bonds should be reported as
5. Question : (TCO A) Marsh Co. had 2,400,000 shares of common stock outstanding on January 1 and December 31, 2011. In connection with the acquisition of a subsidiary company in June 2010, Marsh is required to issue 100,000 additional shares of its common stock on July 1, 2012, to the former owners of the subsidiary. Marsh paid $200,000 in preferred stock dividends in 2011, and reported net income of $3,400,000 for the year. Marsh’s diluted earnings per share for 2011 should be