Blog

The Miller Company earned $107,000 of revenue on account during Year 1. There was no beginning balance in the accounts receivable and allowance accounts. During Year 1, Miller collected $74,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account.What is the amount of uncollectible accounts expense that will be recognized on the Year 1 income statement?

During the year, Todd Corporation issued 200 shares of $20 par value common stock for $50 a share. A total of 500 shares were authorized. In addition, the company purchased 75 shares of treasury stock at $44 a share. Which of the following best presents the related lines in the stockholders’ equity section of the company’s balance sheet?

Gilligan Corporation was established on February 15, Year 1. Gilligan is authorized to issue 325,000 shares of $12 par value common stock. As of December 31, Year 3, Gilligan’s stockholders’ equity accounts report the following balances: Common stock, $12 par, 325,000 shares authorized, 32,500 shares issued and outstanding$ 390,000 Paid-in capital in excess of par – Common65,000 $ 455,000Retained earnings 1,425,000Total stockholders’ equity $ 1,880,000 At the end of Year 3, Gilligan decides to issue a 8% stock dividend. At the time of issue, the market price of the stock was $21 per share.What is the number of shares outstanding after the stock dividend is issued?

How would the declaration of a cash dividend affect the calculation of a company’s price-earnings ratio? (Hint: Do not consider any change in the market price of the stock that might occur because of the declaration of the dividend.)

A company paid $364,000 for a purchase that included land, a building, and equipment. An appraiser estimated the market value of the land to be $87,000, the building to be $314,000, and the equipment to be $27,000. Based on this information recording the basket purchase in the accounting records would cause:

For Year 2, the Sacramento Corporation had beginning and ending Retained Earnings balances of $191,225 and $217,900, respectively. Also during Year 2, the board of directors declared cash dividends of $28,300, which were paid during Year 2. The board also declared a stock dividend, which was issued and required a transfer in the amount of $17,500 to paid-in capital. Total expenses during Year 2 were $42,916. Based on this information, what was the amount of total revenue for Year 2?

Which of the following describes an activity that increases a company’s bank account balance?

Voiles Company reissued 200 shares of its treasury stock. The treasury stock originally cost $25 per share and was reissued for $35 per share. Select the answer that accurately reflects how the reissue of the treasury stock would affect Voiles financial statements. Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+ Stockholders’ EquityCash+Accounts Receivable=Accounts Payable+Other Equity Accounts−Treasury Stock+Paid-in Capital from Treasury StockRevenue−Expenses=Net IncomeA.7,000+ = + −(5,000)+2,000 − = 7,000 FAB.7,000+ = + −5,000+2,000 − = 7,000 IAC.7,000+ = + − +7,000 − = 7,000 FAD.5,000+ = + − +5,000 − = 5,000 FA

On January 1, Year 1, Hardwick Company purchased a truck that cost $53,000. The company expected to drive the truck 200,000 miles over its 5-year useful life, and the truck had an estimated salvage value of $3,000. If the truck is driven 30,000 miles during Year 1, what would be the amount of depreciation expense for the year?

Which of the following describes, in part, how the declaration of a stock dividend affects the financial statements?