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ACC/497;Use the following information for questions 1-3.;Caltreck Manufacturing Inc.'s accounting records reflect the following inventories;Dec. 31, 2005 Dec. 31, 2006;Raw materials inventory $100,000 $ 80,000;Work in process inventory 130,000 145,000;Finished goods inventory 125,000 115,000;During 2006, Caltreck purchased $950,000 of raw materials, incurred direct labor costs of $125,000, and incurred manufacturing overhead totaling $160,000.;1. How much is raw materials transferred to production during 2006 for Caltreck Manufacturing?;a. $1,240,000;b. $970,000;c. $950,000;d. $930,000;2. How much is total manufacturing costs incurred during 2006 for Caltreck?;a. $1,240,000;b. $1,255,000;c. $1,235,000;d. $1,250,000;3. Assume Caltreck Manufacturing's cost of goods manufactured for 2006 amounted to $1,200,000. How much would it report as cost of goods sold for the year?;a. $1,210,000;b. $1,250,000;c. $1,325,000;d. $1,190,000;4. Which one of the following does not appear on the balance sheet of a manufacturing company?;a. Finished goods inventory;b. Raw materials inventory;c. Cost of goods manufactured;d. Work in process inventory;5. Which one of the following represents a period cost?;a. The VP of Sales' salary and benefits;b. Overhead allocated to the manufacturing operations;c. Labor costs associated with quality control;d. Fringe benefits associated with factory workers;6. What is value chain management best defined as?;a. A large chain that keeps the machines from falling on the production floor;b. Management decisions that affect how quickly the production run occurs;c. The incremental value of costs associated with hiring a new production floor leader;d. All activities associated with providing a product or service;7. Costs of good manufactured of SuperK Company are shown below.;SuperK Company;Cost of Goods manufactured;Year Ending December 31, 2006;Beginning work in process: $15,000;Direct materials;Beginning raw materials $14,000;Raw material purchases 22,000;Total raw materials available for use 36,000;Ending raw materials 5,500;Direct materials used 30,500;Direct Labor 6,000;Total manufacturing overhead 10,500;Ending work in process 18,000;Total manufacturing costs $44,000;How much is the total manufacturing cost?;a. $20,500;b. $23,000;c. $47,000;b. $44,000;8. Which one of the following is an activity not associated with TQM?;a. Tightening the bolts on a chassis so that the frame will not drop out;b. Redesigning the gas tank after fuel efficiency standards are not being met;c. Verifying the 10 check points associated with producing the highest quality loaf of bread;d. Ensuring that the mattress just manufactured meets the standard of comfort of a random factory line worker;9. What is ERP's primary benefit?;a. It can eliminate stand alone systems that do not share information easily for management's use.;b. It allows management to rely on the simplest way to utilize information;systems in a manufacturing environment.;c. It permits line workers to perform accounting and marketing tasks.;d. It calculates year end bonuses to a precision not available in traditional information systems management.;10. When property is transferred, the gift tax is based on;a. replacement cost of the transferred property.;b. fair market value on the date of transfer.;c. the transferor's original cost of the transferred property.;d. the transferor's depreciated cost of the transferred property.;11. Thomas dies in the current year and has a gross estate valued at $2,000,000. During his lifetime (but after 1976) Thomas had made taxable gifts of $400,000. The estate incurs funeral and administrative expenses of $100,000 and also pays off Thomas' debts which amount to $300,000. Thomas bequeaths $500,000 to his wife. What is the amount of Thomas' tax base, the amount on which the estate tax is computed?;a. $700,000;b. $1,200,000;c. $1,500,000;d. $2,000,000;12. Which of the following statements is incorrect?;a. Property taxes are levied on real estate.;b. Excise taxes are assessed on items such as gasoline and telephone use.;c. Gift taxes are levied on the recipient of a gift.;d. The estate tax is based on the fair market value of property at death.;13. All of the following statements are true except;a. The net income earned by a sole proprietorship is reported on the owner's individual income tax return.;b. The net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders is also taxed.;c. The net income of C corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the C corporation to individual shareholders is also taxed.;d. LLCs are generally taxed as partnerships.;14. Rocky and Charlie form RC Partnership as equal partners. Rocky contributes $100,000 into RC while Charlie contributes real estate with a fair market value of $100,000. During the current year, RC earned net income of $600,000. The partnership distributes $200,000 to each partner. The amount that Rocky should report on his individual tax return is;a. $0.;b. $100,000.;c. $200,000.;d. $300,000.;15. Which of the following individuals is most likely to be audited?;a. Lola has AGI of $35,000 from wages and uses the standard deduction.;b. Marvella has a $145,000 net loss from her unincorporated business (a horse farm). She also received $150,000 salary as a CEO of a corporation.;c. Melvin fails to report $150 of dividends from a stock investment. His taxable income is $42,000 and he has no other unusually large itemized deductions or business expenses. A Form 1099 is reported to the IRS.;d. None of the above is likely to be selected.;16. Title 26 of the U.S. Code includes;a. employment taxes only.;b. income tax legislation only.;c. gift tax and estate tax legislation only.;d. all of the tax legislation mentioned above.;17. Final regulations often take effect on;a. January 1 of the year of their issuance.;b. January 1 of the year following their issuance.;c. their date of issuance plus one month.;d. the date proposed or the date on which temporary regulations were published.;18. Which of the following documents is issued by the IRS to a specific taxpayer?;a. regulation;b. letter rulings;c. revenue ruling;d. revenue procedure;19. Jerry's case was handled under the "small tax case procedure." He does not agree with the findings of the Tax Court. He would like to appeal the decision of the Tax Court. Which one of the following is true?;a. There is no appeal.;b. He would appeal first to the U.S. Court of Federal Claims.;c. He would appeal first to the U.S. Court of Appeals for the Federal Circuit.;d. He can appeal the case, but only if the amount of tax involved is greater than $5,000.;20. When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the court is following the;a. dictum.;b. Golsen rule.;c. Acquiescence rule.;d. Forum shopping rule;21. A citator is used to find;a. the judicial history of a case.;b. the cases which have cited a case subsequent to the issuance of the opinion.;c. whether a case has been overturned.;d. all of the above.;TRUE/FALSE;22. Under the 1934 Securities Exchange Act, accountants may be prosecuted for criminal liability.;23. RICO was originally drafted as part of the 1980 Organized Crime Control Act.;24. If an entity is planning to go private and to repurchase a significant portion of equity form existing owners, management may have an incentive to overstate earnings.;25. Managerial accounting information generally pertains to an entity as a whole and is very detailed.;26. Both direct material cost and indirect material cost are product costs.;27. Activity-based costing is a method of allocating overhead costs to products.;28. In preparing closing entries for a manufacturing company, all revenue and expense account balances are closed to a Manufacturing Summary account.;29. The focus of a TQM system is to reduce defects in finished products.;30. When a change in the tax law is deemed necessary by Congress, the entire Internal Revenue Code must be revised.;31. Individuals are the principal taxpaying entities in the federal income tax system.

 

Paper#26873 | Written in 18-Jul-2015

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