Example Final Exam 2012-1.pdf

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Department
Business Administration
Course
BUS 251
Professor
Steve Gibson
Semester
Fall

Description
BUS 251 Final Exam ExamplePROBLEMS1On January 1 2003 Petit and Waterman bought a machine to produce widgets The following information is available to youCost of the machine 320000Estimated salvage value20000Estimated useful life 5 yearsEstimated total units of output60000 The actual production in 2003 and 2004 was 11000 units and 14000 units respectively Required a Prepare journal entries to record the amortization expense for the years ended December 31 2003 and 2004 Use the production methodb Show in good form how the asset will be presented on the balance sheet as at December 31 2004 c State the purpose of asset amortization2Murphy Corporation has 100000 7 cumulative preferred shares and 250000 common shares In the first year of operation it earned net income of 500000 and paid dividends of 400000 In the second year the company earned net income of 1500000 of which 1300000 was paid out as dividends At the end of the second year the common shares were selling at a price of 10 per shareRequireda Prepare a statement of retained earnings for year 1 and year 2 and show separately the dividends to common and preferred shareholders for year 1 and year 2b Calculate the dividend per common share for year 21
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