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Spring 2025-11639-202510-ACC204-04 - Accounting Principles II
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A controlling influence over the investee is based on the investor owning voting stock exceeding:
Landmark Corporation buys $450,000 of Schroeter Company's 6%, 5-year bonds payable, at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the 5-year life. When the bonds mature, the journal entry to record the proceeds will be:
J Corp. net income for the year ended December 31, Year 2 was $203,000. Information from Jordan’s comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.
| At December 31 | Year 2 | Year 1 |
|---|---|---|
| Common Stock, $5 par value | $ 518,000 | $ 466,200 |
| Paid-in capital in excess of par | 966,000 | 869,200 |
| Retained earnings | 706,000 | 598,200 |
Use the following information and the indirect method to calculate the net cash provided or used by operating activities:
| Net income | $ 86,800 |
|---|---|
| Depreciation expense | 13,500 |
| Gain on sale of land | 6,800 |
| Increase in merchandise inventory | 3,550 |
| Increase in accounts payable | 7,650 |
In preparing a company's statement of cash flows for the most recent year, the following information is available:
| Loss on the sale of equipment | $ 16,000 |
|---|---|
| Purchase of equipment for cash | 165,000 |
| Proceeds from the sale of equipment | 146,000 |
| Repayment of outstanding bonds | 97,000 |
| Purchase of treasury stock | 72,000 |
| Issuance of common stock | 106,000 |
| Purchase of land for cash | 135,000 |
| Increase in accounts receivable during the year | 53,000 |
| Decrease in accounts payable during the year | 85,000 |
| Payment of cash dividends | 45,000 |
Net cash flows from investing activities for the year were:
Laxco Corporation buys $430,000 of Smith Company's 8%, 5-year bonds payable, at par value on September 1. Interest payments are made semiannually. Laxco plans and has the ability to hold the bonds for the 5-year life. The journal entry to record the purchase should include:
On February 15, Jewel Company buys bonds of Marcelo Corporation for $200,500. The investment is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $201,300. The entry to record the year-end adjustment is:
A company purchased $123,000 of 6% bonds on May 1 at par value. The bonds pay interest on March 1 and September 1. The amount of interest accrued on December 31 (the company's year-end) would be:
On February 15, Jayco Company buys notes of Mars Corporation for $201,710. The investment is classified as long-term available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. The journal entry to record the purchase on February 15 is:
MotorCity, Incorporated purchased 59,000 shares of Shaw common stock for $270,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a: