ACCT310 Spring 2016 Quiz #1

1 INSTRUCTIONS FOR PART 2 It is imperative that you follow these instructions carefully. DO NOT SUBMIT THE INSTRUCTIONS PAGE OR THE QUESTIONS.  Use the “Header” format for your first and last names  No cover page is needed.  You may type or neatly handwrite or your solutions.  Work each problem on a separate sheet of plain white paper.  You must support the solutions to the problems with computations, in order to receive credit.  Submit your answer sheets as a WORD document file or a PDF document file in LEO Quiz 3 Assignment Folder.  Save you solutions with the following file name: Last Name, First Name, ACCT310 Quiz 1 Spring 2016.  Each questions is worth 17.5 percent of the total points 2 ACCT310 Spring 2016 Quiz #1 The following pretax amounts pertain to the XYZ Company for the year ended December 31, 2015. Sales ............................................................................... $ 510,000 Operating expenses .................................... 79,000 Extraordinary gain .................................... 32,000 Interest expense ...................................... 5,000 Cost of goods sold .................................... 260,000 Gain on sale of equipment ............................. 14,000 Prior period adjustment( before tax) ............................... (16,000) Gain on disposal of business component.................. 40,000 Retained earnings, January 1, 2015 .................... 1,800,000 Dividends declared …………………… 10,000 Dividends paid …………………………………….. 40,000 The corporate tax rate is 40 percent. The company had 10,000 shares of common stock outstanding for the entire year. Prepare a multiple-step income statement and statement of retained earnings, in good form, for the year ended December 31, 2015, including EPS. 3 2. The December 31, 2015, post-closing trial balance ($ in thousands) for UMUC Company is presented below: Debits Credits Cash 22,500 Investments (long-term) 55,000 Accounts receivable 30,000 Allowance for uncollectible accounts 7,500 Prepaid insurance 4,500 Inventories 100,000 Land 45,000 Buildings 140,000 Accumulated depreciation - Buildings 50,000 Equipment 132,500 Accumulated depreciation- Equipment 30,000 Patents 5,000 Accounts payable 37,500 Notes payable, due 2016 65,000 Interest payable 10,000 Bonds payable, due 2024 120,000 Common stock, no par, 20,000 shares authorized, issued, and outstanding 150,000 Retained earrings - 64,500 Totals 534,500 534,500 Required: Prepare a classified balance sheet for UMUC Company at December 31, 2015.