CLO 4 A publicly traded corporation has a defined benefit pension plan in place for its employees. Under generally accepted accounting principles, as a measure of the company's pension liability, the...

1. Co
esponds to CLO 1(a) 
West Coast Corporation had 800,000 shares of common stock outstanding on January 1, issued 200,000 shares on October 1, and had income applicable to common stock of $2,865,000 for the year ended December 31, 2013. Rounded to the nearest penny, earnings per share of common stock for 2013 would be (Points : 7) 
$2.86
$3.01
$3.37
$3.58
Answer: ( c ) $3.37
2. Co
esponds to CLO 1(b) 
On July 1, 2013, an interest payment date, $120,000 of Tally Corporation bonds were converted into 3,100 shares of Tally Corporation common stock, each having a par value of $35 and a market value of $42. There is $5,700 unamortized discount on the bonds. Using the book value method, Tally would record (Points : 7) 
a $5,300 increase in paid-in capital in excess of pa
a $5,800 increase in paid-in capital in excess of pa
a $11,500 increase in paid-in capital in excess of pa
a $15,900decrease in paid-in capital in excess of pa
Answer: ( c) $11,500 increase in paid-in capital in excess of pa
3. Co
esponds to CLO 1(c) 
On June 1, 2013, Seasons Corporation issued at 102one thousand five hundred, $1,000 bonds due in ten years. One detachable stock wa
ant entitling the holder to purchase 10 shares of Gordon's common stock was attached to each bond. At the date of issuance, the market value of the bonds, without the stock wa
ants, was quoted at 95. The market value of each detachable wa
ant was quoted at $50. What amount should Seasons Corporation record on June 1, 2013 as paid-in capital from stock wa
ants? (Points : 7) 
$37,500
$39,000
$75,000
$76,500
Answer; ( c) $75000
4. Co
esponds to CLO 1(d) 
On January 1, 2013, Morgan Corporation granted stock options to officers and key employees for the purchase of 50,000 shares of the company's $10 par common stock at $25 per share as additional compensation for services to be rendered over the next three years. The market price of common stock was $31 per share at the date of grant. The options are exercisable during a five-year period beginning January 1, 2016 by grantees still employed by Morgan. The Black-Scholes option pricing model determines total compensation expense to be $360,000. The journal entry to record the compensation expense related to these options for 2013 would include a credit to the Paid-in Capital - Stock Options account for (Points : 7) 
$120,000
$180,000
$300,000
$360,000
Answer: (A) $120,000
5. Co
esponds to CLO 2(a)
On July 1, 2013, Wilshire Corporation acquired 500, $1,000, 8% bonds at 97 plus accrued interest. The bonds were dated April 1, 2013, and mature on March 31, 2018, with interest paid each September 30 and March 31. The bonds will be added to Wilshire's available-for-sale portfolio. The amount to record as the cost of this debt investment on July 1, 2013 is (Points : 7) 
$485,000
$495,000
$500,000
$540,000
Answer; (A) $485,000
6. Co
esponds to CLO 2(b)
On January 1, 2013, Capital Corporation acquired for $400,000 of 10% bonds, paying $376,100. The bonds mature January 1, 2024; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Capital Corporation uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2013, Capital Corporation should increase its Debt Investments account for these bonds by (round to the nearest dollar): (Points : 7) 
$4,000
$3,761
$1,195
$686
Answer : (D) 686
7. Co
esponds to CLO 2(c)
Wright Company's trading securities portfolio, which is appropriately included in cu
ent assets, is as follows on December 31, 2013: Holmes Corporation - cost of $300,000 and fair value of $240,000; Woods Corporation - cost of $500,000 and fair value of $530,000. Ignoring income taxes, what amount should be reported as a charge against income in Wright's 2013 income statement if 2013 is Wright's first year of operation? (Points : 7) 
$30,000 Unrealized Loss
$30,000 Unrealized Gain
$60,000 Unrealized Gain
$ -0-
Answer: (A) $ 30000 unrealized loss
8. Co
esponds to CLO 2(d)
Canton Corporation owns 3,000 of the 10,000 outstanding shares of Wallis Corporation. During 2013, Wallis Corporation earns $500,000 and pays cash dividends of $100,000. What amount should Canton show in the investment account at December 31, 2013 if the beginning of the year balance in the account was $600,000? (Points : 7) 
$600,000
$630,000
$720,000
$750,000
Answer: ( c) $720,000
9. Co
esponds to CLO 3(a)
In 2013, its first year of operations, Providence Corporation had Income (per books before income taxes) of $700,000 and Taxable income of $1,300,000. The disparity...