University Accounting Questions

ACCT 521, Summer 2023/24
Graded Homework
Question # 1
On January 1, 2024, Manama Co. issued 5-year bonds with a face value of $1,000,000 and a stated
interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to
yield 12%.
Instructions
a) Calculate the issue price of the bonds.
b) Prepare the table of amortization.
c) Prepare the journal entries for the year 2024.
Question # 2
Prepare journal entries to record the following transactions related to long-term bonds of Starr
Co.
a) On April 1, 2006, Starr issued $500,000, 9% bonds for $537,868 including accrued interest.
Interest is payable annually on January 1, and the bonds mature on January 1, 2016.
b) On July 1, 2008 Starr retired $150,000 of the bonds at 102 plus accrued interest. Starr uses
straight-line amortization.
Question # 3
Camby Corporation’s balance sheet reported the following:
Capital stock outstanding, 5,000 shares, par $30 per share $150,000
Paid-in capital in excess of par
Retained earnings
80,000
100,000
The following transactions occurred this year:
a) Purchased 120 shares of capital stock to be held as treasury stock, paying $60 per share.
b) Sold 90 of the shares of treasury stock at $65 per share.
c) Sold the remaining shares of treasury stock at $50 per share.
Instructions
Prepare the journal entry for these transactions under the cost method of accounting for treasury
stock.
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ACCT 521, Summer 2023/24
Question # 4
Presented below is information related to Rollins Company:
a) The company is granted a charter that authorizes issuance of 15,000 shares of $100 par
value preferred stock and 40,000 shares of no-par common stock.
b) 8,000 shares of common stock are issued to the founders of the corporation for land
valued by the board of directors at $300,000. The board establishes a stated value of $5 a
share for the common stock.
c) 5,000 shares of preferred stock are sold for cash at $120 per share.
d) The company issues 100 shares of common stock to its attorneys for costs associated with
starting the company. At that time, the common stock was selling at $60 per share.
Instructions
Prepare the general journal entries necessary to record these transactions.
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ACCT 521, Summer 2023/24
Question # 5
Use the provided information to prepare an Income Statement and a Balance Sheet for the year
ended December 31, 2023 for ABC Company.
Accounts
Sales
Cost of sales
Cash and Cash Equivalents
Buildings
Cash
Utilities Expense
Advertising and Marketing Expense
Interest Expense
Insurance Expense
Cash in Banks
Inventory
Prepaid Expenses
Investments – long term
Equipment – net
Goodwill
Deferred Tax Assets
Accrued Expenses
Machinery
Office furniture
Short term loans
long term loans
Rent revenue
Rent expense
Salaries expense
Incentives and bonuses expense
Sales delivery expense
Salary expense for sales delivery workers
Accounts receivable
Accounts payable
Bonds
Common shares
Preferred shares
Number of common shares
Treasury stocks
Retained earnings 1/1/2024
Total
Dr.
Cr.
2,500,000
800,000
120,000
3,500,000
30,000
60
6,200
800
3,210
98,000
65,500
900
350,000
10,000
985,000
800
500
130,000
20,000
5,000
185,000
15,000
3,510
85,800
1,520
2,800
1,900
5,000
1,790
50,000
2,000,000
200,000
1,000,000
30,000
6,251,000
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293,710
6,251,000
ACCT 521, Summer 2023/24
Instructions:
a) Prepare an Income Statement for the year ended December 31, 2023.
b) Prepare a Balance Sheet as of December 31, 2023.
c) Compute the earnings per share EPS.
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