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ACC111 Financial Accounting I Test #3 Spring 2014




ACC111 Financial Accounting I;Test #3;Spring 2014 NAME;1. Journalize the following transactions using;A. the direct write-off method of accounting for uncollectible receivables;B. the allowance method of accounting for uncollectible receivables;June 10 Received $1,100 from Jim Dobbs and wrote off $4,000, the remainder owed.;Oct. 11 Reinstated the account of Jim Dobbs and received $4,000 cash in full payment.;A.;DEBIT;CREDIT;B;DEBIT;CREDIT;2. Determine the amount of interest due at maturity and the maturity value on the following notes assuming the year to have 360 days;Face;Term;Interest;Interest;Maturity;Amount;of Note;Rate;Amount;Value;(a);$6,000;60 days;9%;(b);$9,000;90 days;8%;3. Journalize the following transactions for Solley Company.;a. Received a $4,800.00, 90-day, 9% note from Alan Hibbetts in payment of his account.;b. Received the amount due from Hibbetts on his note.;DEBIT;CREDIT;4. Classifyeach of the following costs associated with long-lived assets as one of the following;A.;Buildings;B.;Machinery and Equipment;C.;Land;D.;Land Improvements;19. Fees paid to architect to design new office building;20. Cost of insurance during the construction of new office building;21. Interest on money borrowed to finance construction of new office building;22. Sales Taxes paid on new factory equipment;23. Freight costs paid on purchase of new equipment;24. Repairs made to used office equipment at acquisition;25. Costs to survey a new piece of land for a new business location;26. Costs of government permits required to develop land for a new business location;27. Purchase price of land purchased for new business site;28. Landscaping at new business location;5. Determine the depreciation expense for the first year two years for equipment costing $500,000, with a life of 5 years, and residual value of $50,000, using (a) the double declining-balance method and (b) the straight-line method.;(a);Year 1;Year 2;(b);Year 1;Year 2;6. A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of 10% cumulative preferred stock, $100 par, and 50,000 shares of $10 par common stock. The amounts distributed as dividends are as follows;Year 1 $12,000;Year 2 $28,000;Year 3 $60,000;Determinethe total dividends and per share dividends for each class of stock for each year by completing the schedule.;Preferred;Common;Total;Per Share;Total;Per Share;7. On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of $50 par preferred stock were issued at $104. Journalize the entries for April 1 and 7.;DEBIT;CREDIT;8. On February 1 of the current year, Motor, Inc. issued 500 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation. The value of the services is $8,500. Journalize this transaction.;DEBIT;CREDIT;9. On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.;DEBIT;CREDIT;10. A corporation, which had 18,000 shares of common stock outstanding, declared a 3-for-1 stock split. Answer the following;(a);What will be the number of shares outstanding after the split?;(b);If the common stock had a market price of $240 per share before the stock split, what would be an approximate market price per share after the split?;11. The dates of importance in connection with a cash dividend of $65,000 on a corporation?s common stock are January 15, February 15, and March 15. Journalize the entries required on each date.;DEBIT;CREDIT;MULTIPLE CHOICE ? Circle the letter of the best answer.;1. Under the corporate form of business organization;a.;ownership rights are easily transferred.;b.;a stockholder is personally liable for the debts of the corporation.;c.;stockholders? acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation.;d.;stockholders wishing to sell their corporation shares must get the approval of other stockholders.;2. The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called;a.;treasury stock;b.;issued stock;c.;outstanding stock;d.;authorized stock;3. Par value;a.;is the monetary value assigned per share in the corporate charter.;b.;represents what a share of stock is worth.;c.;represents the original selling price for a share of stock.;d.;is established for a share of stock after it is issued.;4. The date on which a cash dividend becomes a binding legal obligation is on the;a.;declaration date.;b.;date of record.;c.;payment date.;d.;last day of the fiscal year end.;5. The primary purpose of a stock split is to;a.;increase paid-in capital;b.;reduce the market price of the stock per share;c.;increase the market price of the stock per share;d.;increase retained earnings;6. Which of the following statements is not true about a 2-for-1 split?;a.;Par value per share is reduced to half of what it was before the split.;b.;Total contributed capital increases.;c.;The market price will probably decrease.;d.;A stockholder with ten shares before the split owns twenty shares after the split.;7. Which of the following below is an example of a capital expenditure?;a.;cleaning the carpet in the front room;b.;tune-up for a company truck;c.;replacing an engine in a company car;d.;replacing all burned-out light bulbs in the factory 0;8. When a company throws away machinery that is fully depreciated with no residual value, this transaction would be recorded with the following entry;a.;debit Accumulated Depreciation, credit Machinery;b.;debit Machinery, credit Accumulated Depreciation;c.;debit Cash, credit Accumulated Depreciation;d.;debit Depreciation Expense, credit Accumulated Depreciation;9. Which of the following below is an example of a capital expenditure?;a.;cleaning the carpet in the front room;b.;tune-up for a company truck;c.;replacing an engine in a company car;d.;replacing all burned-out light bulbs in the factory;10. Allowance for Doubtful Accounts is classified as a(n) ______ and has a normal ______ balance.;a.;equity, credit;b.;contra-asset, debit;c.;equity, debit;d.;contra-asset, credit;11. The amount of the promissory note plus the interest earned on the due date is called the;a.;realizable value;b.;maturity value;c.;face value;d.;net realizable value;12. All of the following below are needed for the calculation of straight-line depreciation except;a.;cost;b.;residual value;c.;estimated life;d.;units produced


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