1.
Azteca Corp Co. is a manufacturer and distributer of precision navigation and guidance equipment. The following is information about the company’s earnings and securities on 31 December 2024.(Note: round all per share values to three decimal places)Earnings and SharesNet income1,500,000Average market price of common stock30Tax rate22%Number of common shares outstanding ($1 par) at 1-Jan-2024300,000Number of 3% non-cumulative preferred shares outstanding ($50 par) at year-end55,000Each share of preferred shares is convertible into 2 shares of common stockTotal Dividends Paid during 2024166,500Additional Information on Stock TransactionsOn April 1, 2024, Azteca Corp repurchased 27 thousand previously issued shares.On September 1, Azteca Corp sold and issued an additional 17.5 thousand shares of common stock at $30.Shares Issuable perBondsFace/Carrying ValueInt Rate$1,000 BondSeries A Convertible750,0005%10Series B Convertible650,0004%10Options and WarrantsOptionsWarrantsNumber of shares issuable15,00012,000Exercise price3226
2.
During the December 31, 2023 Financial Statement Audit, the company conducted a thorough internal audit, during which the following facts were discovered. The audit occurred before any adjusting entries or closing entries are prepared. (Assume the 2022 books are closed)1.The Company purchased a machine for $250,000 on January 1, 2020. Lundholm depreciates machines of this type by the straight-line method over a 8-year period using no salvage value. Due to a change in sales patterns, on January 1, 2023, management determines the useful life of the machine to be a total of 10 years, and has a salvage value of $10,000. What amount should Lundholm record for depreciation expense for 2023?2.The Company purchased machinery on July 1, 2023. The machinery was valued at $3,000,000, with a $250,000 down and the Company agreed to pay the balance in 6 equal installments ($541,798), payable each June 30. The company has a borrowing rate of 5%. There is no salvage value, and the useful life is 10 years.The following journal entries were recorded:1-Jul-23DRPP&E – Machinery$3,000,000CRNote Payable$3,000,000DRRepairs and maintenance$250,000CRCash$250,0003.Two years earlier, The Company recorded a 6% stock dividend (4,000 common shares, $1 par) as follows:DRRetained earnings$4,000CRCommon stock$4,000The shares had a market price at the time of $16 per share.4.A 10-year bonds were issued on September 1, 2022. The face value of the bonds totaled $120,000 with a stated rate of 9%. The market rate was 7% when the bonds were issued. Interest is paid annually on August 30 of each year. The following journal entry was recorded when the bonds were issued, and the interest paid:9/1/2022Bond IssuanceDRCash$136,857CRGain on Bonds Payable$16,857CRBonds Payable$120,0009/1/2023DRInterest Expense$10,800CRCash$10,800
3. PQR IndustriesComparative Balance Sheets December 31, 2024 and 202320242023Assets:Cash $ 2,433,000 $ 1,310,000Accounts receivable 2,084,229 1,350,000Inventory 2,700,000 1,575,000Land 1,675,000 1,800,000Building 2,700,000 2,700,000 Less: Accumulated depreciation (900,000) (810,000)Equipment 8,550,000 6,750,000 Less: Accumulated depreciation (1,575,000) (1,440,000)Patent 3,600,000 4,500,000 $ 21,267,229 $ 17,735,000Liabilities:Accounts payable $ 1,900,000 $ 1,350,000Accrued expenses payable 900,000 675,000Interest Payable 3,000 – Dividends Payable 25,000 35,000Notes Payable 125,000 150,000Bond Payable (net) 261,073 – Shareholders’ Equity:Common stock 9,456,667 9,000,000Paid-in capital–excess of par 2,253,333 2,025,000Retained earnings 6,343,156 4,500,000 $ 21,267,229 $ 17,735,000Additional information from the accounting records:a. During 2024, equipment with a cost of $875,000 (45% depreciated) was sold for $350,000.b. The Statement of Shareholders’ Equity reveals reductions of $685,000 and $445,000 for stock dividends and cash dividends, respectively.c. Net income for the year was $2,973,156.d. Land was sold for $90,000.e. On May 1, 2024, the company issued 10 year, $300,000.00, 6% bonds at a market rate of 8%. The issuing price of the bond was $259,229.02. Interest on the bonds is paid semi-annually on Oct 31 and April 30 of each year.Using this financial statement data, prepare a complete statement of cash flows, using the INDIRECT method.
ACCTG 334 – Intermediate Accounting II
Spring 2023
Chapter 19 Exam Corrections
Due: 5-May-2023
Last Name:
First Name:
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This is your worksheet for the exam. To receive credit for the exam problem, you must
complete these worksheets. Please note that you may not need all sections of the worksheet to
complete the exam problem.
..
Required: Calculate Weighted Average Shares Outstanding
Required: Calculate Basic EPS
Net income
Preferred dividends paid
Income available to common stockholders (IACS)
Weighted average common shares
Basic EPS
Required: Calculate diluted EPS
Item
IACS
Diluted EPS
Shares
EPS
ERROR #1 – Simplified J/E – Extra Credit
DR/CR
Account Name
Amount
ERROR #2 – Simplified J/E
DR/CR
Account Name
Amount
ERROR #3 – Simplified J/E
DR/CR
Account Name
Amount
ERROR #4 – Simplified J/E
DR/CR
Account Name
Amount
Statement of Cash Flows
For the Year Ended December 31, 2024
Cash flows from operating activities
Net income
Adjustments for noncash effects:
Changes in operating assets and liabilities:
Net cash provided (used) by operating activities
Cash flows from investing activities
Net cash from Investing Activities
Cash flows from financing activities
Net cash from Financing Activities
Net Cash Flows
Cash Balance – Jan 1, 2024
Cash Balance – Dec 31, 2024
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