1. On feb 15, seacroft buys 8,000 shares of Kebo common stock at $28.63 per shar
ID: 2373576 • Letter: 1
Question
1. On feb 15, seacroft buys 8,000 shares of Kebo common stock at $28.63 per share plus a brokeage fee of $400. The stock is classified as available-for-sale securities. On march 15, Kebo declares a dividend of $1.15 per share payable to stockholders of record on April 16. Seacroft received the dividend on April 25 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.40 per share less a brokeage fee of $250. The journal entry to record the dividend on April 25 is:
A) Debit cash 9,200; credit Gain on Sale of investments 9,200
B) Debit cash 8,388; credit Dividend Revenue 8,388
C) Debit cash 8,388; credit Interest Revenue 8,388
D) Debit cash 9,200; credit Dividend Revenue 9,200
E) Debit cash 9,200; credit Interest Revenue 9,200
2. Refer to the following selected financial information from Hansen's LLC. Compute the company's return on total assets for Year 2.
Year 2 Year 1
Net sales 481000 426750
Cost of goods sold 276800 250620
Interest expense 10,200 11200
Net income before tax 67750 53180
Net income after tax 46550 40400
Total assets 318100 291000
Total liabilities 178900 167800
Total equity 139200 123200
A) 2.7%
B) 22.2%
C) 14.6%
D)15.3%
E) 9.7%
Explanation / Answer
1) D) Debit cash 9,200; credit Dividend Revenue 9,200
9200 = 1.15 * 8000
2) 46550 * 100 / 318100 = 14.6%
C) 14.6%
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