Damion Enterprises, Inc. has the following stockholders\' equity section: Common

Question

Damion Enterprises, Inc. has the following stockholders' equity section:

Common stock, $10 par, 100,000 shares authorized, 20,000 shares

issued and outstanding $200,000

Paid-in capital-common stock 700,000

Retained earnings     3,600,000

Total stockholders' equity $4,500,000

Damion split its stock 4-for-1 on 08/31/2017 when the value of its stock on the open market was $60 per share. The entry that Damion should have made when this transaction took place is as follows:

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Rawl Company issues a 10-year, $4,000,000 bond on 01/01/2017 with a premium of $100,000. The coupon rate of the bond is 10%, and interest is to be paid to the bondholders semiannually on 06/30 and 12/31. The journal entry that Rawl should make on 12/31/2017 with regard to this bond is

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When a note is secured by an asset of the corporation, it is called a(n)

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RoughRider Corporation owns $60,000 of the common stock of Pistola, Inc. This investment has been properly classified by RoughRider as a trading security. The $60,000 ownership of Pistola stock

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On 03/01/2017 ABC Company purchased 30% of the stock of XYZ Corporation for $6,000,000. How will ABC treat a 2017 cash dividend paid by XYZ to its shareholders?

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Question 244 pts

On 01/01/2017, Hanny Company acquired 60,000 shares of the 400,000 outstanding shares of Edwards Company common stock for $240,000. The investment was properly classified as an available-for-sale investment by Hanny. During 2017, Edwards declared a total of $100,000 cash dividends to its common shareholders. Edwards earned $200,000 in net income for the year ended 12/31/2017. The year-end valuation of Edwards Company on the stock market was $4.50 per share. What is the total valuation of the investment on Hanny's balance sheet at 12/31/2017?

1. When a new partner is admitted to an existing partnership, whether by contributing cash, property, or expertise, an adjustment of the accounts of the partnership to current value should be made (if necessary). Any such adjustment should be made to the capital accounts of

2. Blatt, Inc. was incorporated on 01/01/2017. Blatt's article of incorporation specified that the corporation's par value of common stock was $10 per share. When Blatt sold common stock to its initial shareholders on 01/10/2017, it did so for $50 per common share. 10,000 shares were sold in this initial offering. The correct journal entry for Blatt to make when these shares were sold was

debit common stock $500,000, credit cash $500,000.

Debit Stock Dividend Distributable $4,800,000, credit Common Stock $800,000, credit paid-in capital $4,000,000

Explanation / Answer

1. Damion enterprises has splited it's common share in 4 shares of 1 share. In case of split of shares, there will be no profit or loss impacted or no cash will be impacted. hence, we won't debit or credit cash or retained earnings. All happened here is number of shares has been increased 4 times and market price of shares will come down in the same ratio, remaining the share capital intact. Therefore no journal entry will be passed. the answer is D.

2. Companies pay dividend if they earn good amount of profits. The divideds are paid out of profits.

IF a cash divided has been distributed, sufficient profit or retained earnings should be availabe. No divided will be distributed to common stockholders if there is a loss or negative retained earnings. Therefore answer is A.

The other 3 options are - No SEC approval is requied as it is approved by BOD; We cant distribute divideds out of loans; No shares is required as we are not distributing shares here. It is cash dividend.

Answer 7 : If coupon rate of a bond is less than the market interest rate the bond will be less attractive to the people and thus the demand of that bond will be lower because of the low coupon rate. To make that bond attractive so that the investor will buy that bond, issuer has to sell that bond a low prices as compare to the rates prevailing in the market of the high interest rate bond. Hence, it will sell the bond at DISCOUNT. Option C is correct.

Answer 9 - IF a bond is secured or backed by an asset that will be called Mortgage bond.

a callable bond is something where the investor has an option to call the bond before the maturity.

other tows are nothing.

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