COMPREHENSIVE EXAMINATION D
LATEST UPDATED VERSION
2025 - 2026
PART 4
(Chapters 15-17)
Approximate
Problem Topic Time
D-I Treasury Stock. 20 min.
D-II *Cash Dividends. 10 min.
D-III Stock Dividends and Stock Splits. 10 min.
D-IV Earnings Per Share Concepts. 10 min.
D-V Earnings Per Share Computations. 10 min.
D-VI Basic and Diluted Earnings Per Share. 20 min.
D-VII Available-for-Sale Equity Securities. 15 min.
D-VIII Trading Securities. 30 min.
125 min.
*Part of this topic is dealt with in an Appendix to the chapter.
Problem D-I — Treasury Stock
The stockholders' equity section of Carey Co.'s balance sheet at December 31, 2012, was as
follows:
Common stock--$10 par (authorized 1,000,000 shares,
, D-2 Test Bank for Intermediate Accounting, Fourteenth Edition
issued and outstanding 600,000 shares) $ 6,000,000
Paid-in capital in excess of par 1,500,000
Retained earnings 3,250,000
$10,750,000
Instructions
Prepare journal entries (1, 2, and 4) and show proper disclosure (3) to reflect the following
treasury stock transactions showing how each is accounted for under the cost method. (Show
computations.)
1. On January 4, 2013, having idle cash, Carey Co. repurchased 20,000 shares of its
outstanding stock for $500,000.
2. On March 4, Carey sold 5,000 of these reacquired shares at $28 per share.
3. Show the proper disclosures in the stockholders' equity section of the balance sheet issued at
the end of the first quarter, March 31, 2013. Assume net income of $100,000 during the first
quarter.
4. On June 30, 2013 the firm sold 10,000 of the reacquired shares for $21 per share.
*Problem D-II — Cash Dividends
Bell Company has stock outstanding as follows: Common, $10 par value per share, 140,000
shares; Preferred, 5%; $100 par value per share, 8,000 shares. The Preferred is cumulative and
participating up to an additional 4% of par; two years are in arrears (not including the current
year); and the total amount of cash dividends declared for both classes of stock is $230,000.
Instructions
Prepare the entry for the dividend declaration, separating the dividend into the common and
preferred portions.
Problem D-III — Stock Dividends and Stock Splits
Stock dividends and stock splits are common forms of corporate stock distribution to
stockholders.
Consider each of the numbered statements. You are to decide whether it:
A. Applies to both stock dividends and stock splits.
B. Applies to neither.
C. Applies to stock splits only.
D. Applies to stock dividends only.
E. Applies to stock splits effected in the form of a dividend only.
F. Applies to both stock splits effected in the form of a dividend and a stock dividend.
LATEST UPDATED VERSION
2025 - 2026
PART 4
(Chapters 15-17)
Approximate
Problem Topic Time
D-I Treasury Stock. 20 min.
D-II *Cash Dividends. 10 min.
D-III Stock Dividends and Stock Splits. 10 min.
D-IV Earnings Per Share Concepts. 10 min.
D-V Earnings Per Share Computations. 10 min.
D-VI Basic and Diluted Earnings Per Share. 20 min.
D-VII Available-for-Sale Equity Securities. 15 min.
D-VIII Trading Securities. 30 min.
125 min.
*Part of this topic is dealt with in an Appendix to the chapter.
Problem D-I — Treasury Stock
The stockholders' equity section of Carey Co.'s balance sheet at December 31, 2012, was as
follows:
Common stock--$10 par (authorized 1,000,000 shares,
, D-2 Test Bank for Intermediate Accounting, Fourteenth Edition
issued and outstanding 600,000 shares) $ 6,000,000
Paid-in capital in excess of par 1,500,000
Retained earnings 3,250,000
$10,750,000
Instructions
Prepare journal entries (1, 2, and 4) and show proper disclosure (3) to reflect the following
treasury stock transactions showing how each is accounted for under the cost method. (Show
computations.)
1. On January 4, 2013, having idle cash, Carey Co. repurchased 20,000 shares of its
outstanding stock for $500,000.
2. On March 4, Carey sold 5,000 of these reacquired shares at $28 per share.
3. Show the proper disclosures in the stockholders' equity section of the balance sheet issued at
the end of the first quarter, March 31, 2013. Assume net income of $100,000 during the first
quarter.
4. On June 30, 2013 the firm sold 10,000 of the reacquired shares for $21 per share.
*Problem D-II — Cash Dividends
Bell Company has stock outstanding as follows: Common, $10 par value per share, 140,000
shares; Preferred, 5%; $100 par value per share, 8,000 shares. The Preferred is cumulative and
participating up to an additional 4% of par; two years are in arrears (not including the current
year); and the total amount of cash dividends declared for both classes of stock is $230,000.
Instructions
Prepare the entry for the dividend declaration, separating the dividend into the common and
preferred portions.
Problem D-III — Stock Dividends and Stock Splits
Stock dividends and stock splits are common forms of corporate stock distribution to
stockholders.
Consider each of the numbered statements. You are to decide whether it:
A. Applies to both stock dividends and stock splits.
B. Applies to neither.
C. Applies to stock splits only.
D. Applies to stock dividends only.
E. Applies to stock splits effected in the form of a dividend only.
F. Applies to both stock splits effected in the form of a dividend and a stock dividend.
