{"id":9522,"date":"2021-10-19T09:50:59","date_gmt":"2021-10-19T09:50:59","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/newton-manufacturing-acquired-new-machinery-on-january-1-at-a-cost-of\/"},"modified":"2021-10-19T09:50:59","modified_gmt":"2021-10-19T09:50:59","slug":"newton-manufacturing-acquired-new-machinery-on-january-1-at-a-cost-of","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/newton-manufacturing-acquired-new-machinery-on-january-1-at-a-cost-of\/","title":{"rendered":"Newton manufacturing acquired new machinery on january 1 at a cost of"},"content":{"rendered":"
\n

Newton Manufacturing acquired new machinery on January 1 at a cost of $90,000. It is estimated to have a useful life of 10 years and a salvage value of $30,000. Straight-line depreciation was used. On January 1, following six full years of use of the machinery, management decided that the original estimate of useful life had been too long and that the machinery would have to be retired after two more years (at the end of the eighth year of service). Under this revised, the depreciation expense for the seventh year of would be:<\/p>\n

\u00a0<\/p>\n

$11,250.\u00a0<\/p>\n

$27,000.\u00a0<\/p>\n

$18,000.\u00a0<\/p>\n

$12,000.<\/p>\n

\u00a0<\/p>\n

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 4-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is<\/p>\n

\u00a0<\/p>\n

25%.\u00a0<\/p>\n

50%. \u00a0\u00a0<\/p>\n

20%.\u00a0<\/p>\n

5%.<\/p>\n

\u00a0<\/p>\n

Tomko Company purchased machinery with a list price of $32,000. They were given a 10% discount by the manufacturer. They paid $200 for shipping and sales tax of $1,500. Tomko estimates that the machinery will have a useful life of 10 years and a residual value of $10,000. If Tomko uses straight-line depreciation, annual depreciation will be<\/p>\n

\u00a0<\/p>\n

$2,036.\u00a0<\/p>\n

$2,050. \u00a0\u00a0<\/p>\n

$3,050.\u00a0<\/p>\n

$1,880.<\/p>\n

\u00a0<\/p>\n

On October 1, 2013, Holt Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2013, balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation?<\/p>\n

\u00a0<\/p>\n

$52,000\u00a0<\/p>\n

$60,000\u00a0<\/p>\n

$72,000\u00a0<\/p>\n

$76,000<\/p>\n

\u00a0<\/p>\n

Don’s Copy Shop bought equipment for $150,000 on January 1, 2012. Don estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2013, Don decides that the business will use the equipment for 5 years. What is the revised depreciation expense for 2013?<\/p>\n

\u00a0<\/p>\n

$20,000\u00a0<\/p>\n

$50,000\u00a0<\/p>\n

$37,500\u00a0<\/p>\n

$25,000 \u00a0<\/p>\n

\u00a0<\/p>\n

If sixty $1,000 convertible bonds with a carrying value of $69,000 are converted into 9,000 shares of $5 par value common stock, the journal entry to record the conversion is<\/p>\n

\u00a0<\/p>\n

Bonds Payable60,000<\/p>\n

Premium on Bonds Payable9,000<\/p>\n

Common Stock69,000<\/p>\n

\u00a0<\/p>\n

Bonds Payable60,000<\/p>\n

Premium on Bonds Payable9,000<\/p>\n

Common Stock45,000<\/p>\n

Paid-in Capital in Excess of Par24,000<\/p>\n

\u00a0<\/p>\n

Bonds Payable69,000<\/p>\n

Discount on Bonds Payable9,000<\/p>\n

Common Stock45,000<\/p>\n

Paid-in Capital in Excess of Par15,000<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

Bonds Payable69,000<\/p>\n

Common Stock69,000<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

Under IFRS, the proceeds from the issuance of convertible debt are reported as<\/p>\n

\u00a0<\/p>\n

both debt and equity.\u00a0<\/p>\n

debt only.\u00a0<\/p>\n

debt or equity depending on the circumstances.\u00a0<\/p>\n

equity only.<\/p>\n

\u00a0<\/p>\n

Each of the following is correct regarding bonds except they are<\/p>\n

\u00a0<\/p>\n

a form of interest-bearing notes payable.\u00a0<\/p>\n

attractive to many investors.\u00a0<\/p>\n

issued by corporations and governmental agencies.\u00a0<\/p>\n

sold in large denominations.<\/p>\n

\u00a0<\/p>\n

On October 1, Steve’s Carpet Service borrows $250,000 from First National Bank on a 3-month, $250,000, 8% note. The entry by Steve’s Carpet Service to record payment of the note and accrued interest on January 1 is<\/p>\n

\u00a0<\/p>\n

Notes Payable250,000<\/p>\n

Interest Payable5,000<\/p>\n

Cash255,000<\/p>\n

\u00a0<\/p>\n

Notes Payable255,000<\/p>\n

Cash255,000<\/p>\n

\u00a0<\/p>\n

Notes Payable250,000<\/p>\n

Interest Payable20,000<\/p>\n

Cash270,000<\/p>\n

\u00a0<\/p>\n

Notes Payable250,000<\/p>\n

Interest Expense5,000<\/p>\n

Cash255,000<\/p>\n

\u00a0<\/p>\n

The current balance sheet of Greyson Inc. reports total assets of $40 million, total liabilities of $4 million, and stockholders’ equity of $36 million. Greyson is considering several financing possibilities in order to expand operations. Each question based on this data is independent of any others. What will be the effect on Greyson’s debt to total assets ratio if Greyson issues an additional $8 million in stock to finance its expansion?<\/p>\n

\u00a0<\/p>\n

The debt to total asset ratio will increase from 40 before to 48 after the additional investment.\u00a0<\/p>\n

The debt to total asset ratio will decrease from .1(4\/40) to .083 (4\/48) after the additional stock sale.\u00a0<\/p>\n

The additional stock issuance will have no effect on the debt to total asset ratio.\u00a0<\/p>\n

The debt to total asset ratio will decrease from 4\/36 before to 4\/44 after the additional stock sale.<\/p>\n

\u00a0<\/p>\n

The relationship of current assets to current liabilities is used in evaluating a company\u2019s<\/p>\n

\u00a0<\/p>\n

operating cycle.\u00a0<\/p>\n

revenue-producing ability.\u00a0<\/p>\n

short-term debt paying ability.\u00a0<\/p>\n

long-range solvency<\/p>\n

\u00a0<\/p>\n

The discount on bonds payable or premium on bonds payable is shown on the balance sheet as an adjustment to bonds payable to arrive at the carrying value of the bonds. Indicate the appropriate addition or subtraction to bonds payable:<\/p>\n

Premium on \u00a0Bonds PayableDiscount onBonds Payable\u00a0<\/p>\n

\u00a0<\/p>\n

Deduct\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Add<\/p>\n

Add\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Deduct\u00a0<\/p>\n

Add\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Add\u00a0<\/p>\n

Deduct\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Deduct<\/p>\n

\u00a0<\/p>\n

Jarrett Company issued 600 shares of no-par common stock for $8,800. Which of the following journal entries would be made if the stock has no stated value?<\/p>\n

\u00a0<\/p>\n

Cash 8,800<\/p>\n

Common Stock600<\/p>\n

Paid-in Capital in Excess of Par8,200<\/p>\n

\u00a0<\/p>\n

Common Stock8,800<\/p>\n

Cash8,800<\/p>\n

\u00a0<\/p>\n

Cash 8,800<\/p>\n

Common Stock600<\/p>\n

Paid-in Capital in Excess of Stated Value8,200<\/p>\n

\u00a0<\/p>\n

Cash 8,800<\/p>\n

Common Stock8,800<\/p>\n

\u00a0<\/p>\n

Crawl Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2012, and December 31, 2013. The board of directors declared and paid a $2,000 dividend in 2012. In 2013, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2013?<\/p>\n

\u00a0<\/p>\n

$8,000\u00a0<\/p>\n

$4,000\u00a0<\/p>\n

$3,000\u00a0<\/p>\n

$6,000<\/p>\n

\u00a0<\/p>\n

Bacon Corporation began business by issuing 150,000 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $25,000. The year-end balance sheet would show<\/p>\n

\u00a0<\/p>\n

Common stock of $750,000. \u00a0 \u00a0 \u00a0<\/p>\n

Total paid-in capital of $3,725,000.\u00a0<\/p>\n

Total paid-in capital of $775,000.\u00a0<\/p>\n

Common stock of $3,750,000.<\/p>\n

\u00a0<\/p>\n

A small stock dividend is defined as<\/p>\n

\u00a0<\/p>\n

between 50% and 100% of the corporation’s issued stock.\u00a0<\/p>\n

more than 30% of the corporation’s issued stock.\u00a0<\/p>\n

less than 30% but greater than 25% of the corporation’s issued stock.\u00a0<\/p>\n

less than 20\u201325% of the corporation’s issued stock<\/p>\n

\u00a0<\/p>\n

Rouse Corporation\u2019s December 31, 2013 balance sheet showed the following:<\/p>\n

8% preferred stock, $10 par value, cumulative, 20,000 shares authorized; 15,000 shares issued$150,000<\/p>\n

Common stock, $10 par value, 2,000,000 shares authorized; 1,950,000 shares issued, 1,930,000 shares outstanding19,500,000<\/p>\n

Paid-in capital in excess of par\u2014preferred stock60,000<\/p>\n

Paid-in capital in excess of par\u2014common stock27,000,000<\/p>\n

Retained earnings7,650,000<\/p>\n

Treasury stock (20,000 shares)630,000<\/p>\n

\u00a0<\/p>\n

Rouse\u2019s total stockholders\u2019 equity was<\/p>\n

\u00a0<\/p>\n

$53,730,000. \u00a0\u00a0<\/p>\n

$46,710,000.\u00a0<\/p>\n

$54,360,000.\u00a0<\/p>\n

$54,990,000<\/p>\n

\u00a0<\/p>\n

Information that is not generally reported for each class of stock on the balance sheet is<\/p>\n

\u00a0<\/p>\n

the par value.\u00a0<\/p>\n

shares authorized.\u00a0<\/p>\n

shares issued.\u00a0<\/p>\n

the market value.<\/p>\n

\u00a0<\/p>\n

The authorized stock of a corporation<\/p>\n

\u00a0<\/p>\n

must be recorded in a formal accounting entry.\u00a0<\/p>\n

is indicated in its by-laws.\u00a0<\/p>\n

only reflects the initial capital needs of the company.\u00a0<\/p>\n

is indicated in its charter.<\/p>\n

\u00a0<\/p>\n

A corporation purchases 30,000 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders\u2019 equity?<\/p>\n

\u00a0<\/p>\n

Increase by $900,000\u00a0<\/p>\n

Decrease by $900,000\u00a0<\/p>\n

Decrease by $1,350,000 \u00a0\u00a0<\/p>\n

Increase by $1,350,000<\/p>\n

\u00a0<\/p>\n

Which of the following factors does not affect the initial market price of a stock?<\/p>\n

\u00a0<\/p>\n

the company’s anticipated future earnings\u00a0<\/p>\n

the expected dividend rate per share\u00a0<\/p>\n

the par value of the stock\u00a0<\/p>\n

the current state of the economy<\/p>\n

\u00a0<\/p>\n

A corporation is not committed to a legal obligation when it declares<\/p>\n

\u00a0<\/p>\n

a cash dividend.\u00a0<\/p>\n

either a cash dividend or a stock dividend.\u00a0<\/p>\n

a stock dividend.\u00a0<\/p>\n

None of the above<\/p>\n

\u00a0<\/p>\n

The effect of the declaration of a cash dividend by the board of directors is to<\/p>\n

IncreaseDecrease<\/p>\n

\u00a0<\/p>\n

LiabilitiesAssets\u00a0<\/p>\n

Stockholders’ equityAssets\u00a0<\/p>\n

AssetsLiabilities\u00a0<\/p>\n

LiabilitiesStockholders’ equity<\/p>\n

\u00a0<\/p>\n

Corporations generally issue stock dividends in order to<\/p>\n

\u00a0<\/p>\n

increase the marketability of the stock.\u00a0<\/p>\n

exceed stockholders’ dividend expectations.\u00a0<\/p>\n

decrease the amount of capital in the corporation.\u00a0<\/p>\n

increase the market price per share.<\/p>\n

\u00a0<\/p>\n

Ralston Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Ralston issues 6,000 shares of common stock to pay its recent attorney\u2019s bill of $25,000 for legal services on a land access dispute, which of the following would be the journal entry for Ralston to record?<\/p>\n

\u00a0<\/p>\n

Legal Expense25,000<\/p>\n

Common Stock6,000<\/p>\n

Paid-in Capital in Excess of Par \u2013 Preferred19,000<\/p>\n

\u00a0<\/p>\n

Legal Expense6,000<\/p>\n

Common Stock6,000<\/p>\n

\u00a0<\/p>\n

Legal Expense25,000<\/p>\n

Common Stock25,000<\/p>\n

\u00a0<\/p>\n

Legal Expense25,000<\/p>\n

Common Stock6,000<\/p>\n

Paid-in Capital in Excess of Stated<\/p>\n

Value \u2013 Common19,000<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Newton Manufacturing acquired new machinery on January 1 at a cost of $90,000. It is estimated to have a useful life of 10 years and a salvage value of $30,000. Straight-line depreciation was used. On January 1, following six full years of use of the machinery, management decided that the original estimate of useful life […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-9522","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/9522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=9522"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/9522\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=9522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=9522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=9522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}