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    Sloan Corp. cumulative preferred stock

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    Question 15.

    At December 31, 2007 and 2008, Sloan Corp. had outstanding 9,000 shares of $100 par value 8% cumulative preferred stock and 30,000 shares of $10 par value common stock. At December 31, 2007, dividends in arrears on the preferred stock were $36,000. Cash dividends declared in 2008 totaled $135,000. What amounts were payable on each class of stock?
    Preferred Stock Common Stock
    a. $72,000 $63,000
    b. $99,000 $36,000
    c. $108,000 $27,000
    d. $135,000 $0

    Question 16..

    Kane Co. issued bonds with detachable common stock warrants. Only the warrants had a known market value. The sum of the fair value of the warrants and the face amount of the bonds exceeds the cash proceeds. This excess is reported as

    a. Discount on Bonds Payable.
    b. Premium on Bonds Payable.
    c. Common Stock Subscribed.
    d. Paid-in Capital in Excess of Par?Stock Warrants.

    Question 17

    On January 2, 2008, for past services, Simon Corp. granted Ken Otto, its president, 30,000 stock appreciation rights that are exercisable immediately and expire on January 2, 2009. On exercise, Otto is entitled to receive cash for the excess of the market price of the stock on the exercise date over the market price on the grant date. Otto did not exercise any of the rights during 2008. The market price of Simon's stock was $30 on January 2, 2008, and $45 on December 31, 2008. As a result of the stock appreciation rights, Simon should recognize compensation expense for 2008 of?___________________

    Question 18

    At December 31, 2008, Malle Corp. had the following equity securities that were purchased during 2008, its first year of operation:
    Fair Unrealized
    Cost Value Gain (Loss)
    Trading Securities:
    Security A $100,000 $ 60,000 $(40,000)
    B 15,000 20,000 5,000
    Totals $115,000 $ 80,000 $(35,000)

    Available-for-Sale Securities:
    Security Y $ 70,000 $ 80,000 $10,000
    Z 85,000 55,000 (30,000)
    Totals $155,000 $135,000 $(20,000)

    All market declines are considered temporary. Fair value adjustments at December 31, 2008 should be established with a corresponding charge against
    Income Stockholders' Equity
    a. $55,000 $ 0
    b. $40,000 $30,000
    c. $35,000 $20,000
    d. $35,000 $ 0

    Question 19

    On December 29, 2007, Greer Co. sold an equity security that had been purchased on January 4, 2006. Greer owned no other equity securities. An unrealized holding loss was reported in the 2006 income statement. A realized gain was reported in the 2007 income statement. Was the equity security classified as available-for-sale and did its 2006 market price decline exceed its 2007 market price recovery?
    2006 Market Price
    Decline Exceeded 2007
    Available-for-Sale Market Price Recovery
    a. Yes Yes
    b. Yes No
    c. No Yes
    d. No No

    Question 20

    On October 1, 2006, Ming Co. purchased 800 of the $1,000 face value, 8% bonds of Loy, Inc., for $936,000, including accrued interest of $16,000. The bonds, which mature on January 1, 2013, pay interest semiannually on January 1 and July 1. Ming used the straight-line method of amortization and appropriately recorded the bonds as available-for-sale. On Ming's December 31, 2007 balance sheet, the carrying value of the bonds is?___________________

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    Solution Preview

    ANSWERS
    Question 15
    C
    PS:(9000X100X8%)+36000=108,000
    CS:135000-108000=27000
    Question 16
    A

    Question ...

    Solution Summary

    The solution examines Sloan Corporation preferred stock.

    $2.19