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ACC 291 Final Exams




Question;ACC 291 Final Exam;1. On January 1, a machine with a useful life of five;years and a residual value of $40,000 was purchased for $120,000. What is the;depreciation expense for year 2 under the double-declining-balance method of;depreciation?;2. As a recent graduate of State University you're;aware that IFRS requires component depreciation for plant assets. A friend has;asked you to succinctly explain what component depreciation means. Which of the;following correctly describes component depreciation?;3. Given the following account balances at year end;compute the total intangible assets on the balance sheet of Janssen;Enterprises.;4. Bonds with a face value of $300,000 and a quoted;price of 97? have a selling price of;5. Sparks Company received proceeds of $423,000 on;10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of;$400,000, pay interest annually on December 31st, and have a call price of 102.;Sparks uses the straight-line method of amortization. What is the carrying;value of the bonds on January 1, 2015?;6. S. Lawyer performed legal services for E. Corp. Due;to a cash shortage, an agreement was reached whereby E. Corp. would pay S.;Lawyer a legal fee of approximately $15,000 by issuing 8,000 shares of its;common stock (par $1). The stock trades on a daily basis and the market price;of the stock on the day the debt was settled is $1.80 per share. Given this;information, the best journal entry for E. Corp. to record for this transaction;is;7. Logan Corporation issues 50,000 shares of $50 par;value preferred stock for cash at $60 per share. The entry to record the;transaction will consist of a debit to Cash for $3,000,000 and a credit or;credits to;8. Jahnke Corporation issued 8,000 shares of ?2 par;value ordinary shares for ?11 per share. The journal entry to record the sale;will include;8. Zoum Corporation had the following transactions;during 2014;1. Issued;$125,000 of par value common stock for cash.;2. Recorded;and paid wages expense of $60,000.;3. Acquired;land by issuing common stock of par value $50,000.;4. Declared;and paid a cash dividend of $10,000.;5. Sold a;long-term investment (cost $3,000) for cash of $3,000.;6. Recorded;cash sales of $400,000.;7. Bought;inventory for cash of $160,000.;8. Acquired;an investment in Zynga stock for cash of $21,000.;9. Converted;bonds payable to common stock in the amount of $500,000.;10. Repaid a;6 year note payable in the amount of $220,000.;What is the net cash provided by financing activities?;9. Colie Company had an increase in inventory of;$120,000. The cost of goods sold was $490,000. There was a $30,000 decrease in;accounts payable from the prior period. Using the direct method of reporting;cash flows from operating activities, what were Colie's cash payments to;suppliers?;10. Each of the following items may be classified as;operating or financing activities under IFRS except;11. The current assets of Orangatte Company are;$227,500. The current liabilities are $130,000. The current ratio expressed as;a proportion is;12. All of the following requirements about internal;controls were enacted under the Sarbanes Oxley Act of 2002 except;13. Which of the following is not an internal control;activity for cash?;14. Before a check authorization is issued, the;following documents must be in agreement, except for the;15. Mitchell Corporation bought equipment on January;1, 2014.The equipment cost $180,000 and had an expected salvage value of;$30,000. The life of the equipment was estimated to be 6 years. The book value;of the equipment at the beginning of the third year would be;16. Brevard Corporation purchased a taxicab on January;1, 2013 for $25,500 to use for its shuttle business. The cab is expected to;have a five-year useful life and no salvage value. During 2014, it retouched;the cab's paint at a cost of $1,200, replaced the transmission for $3,000;(which extended its life by an additional 2 years), and tuned-up the motor for;$150. If Brevard Corporation uses straight-line depreciation, what annual;depreciation will Brevard report for 2014?;17. On July 1, 2014, Fleming Company sells machinery;for $120,000. The machinery originally cost $300,000, had an estimated 5-year;life and an expected salvage value of $50,000. The Accumulated Depreciation account;had a balance of $175,000 on January 1, 2014, using the straight-line method.;The gain or loss on disposal is;18. On July 1, 2014, Linden Company purchased the;copyright to Norman Computer Tutorials for $140,000. It is estimated that the;copyright will have a useful life of 5 years. The amount of Amortization;Expense recognized for the year 2014 would be;19. The following totals for the month of April were;taken from the payroll records of Metz Company.;Salaries $30,000;FICA taxes withheld 2,295;Income taxes withheld 6,600;Medical insurance deductions1,200;Federal unemployment taxes 240;State unemployment taxes 1,500;The entry to record accrual of employer?s payroll;taxes would include a;19. Thayer Company purchased a building on January 2;by signing a long-term $2,520,000 mortgage with monthly payments of $23,100.;The mortgage carries an interest rate of 10 percent. The amount owed on the;mortgage after the first payment will be;20. The following data is available for BOX;Corporation at December 31, 2014;Common stock, par $10 (authorized 30,000 shares) $250,000;Treasury stock (at cost $15 per share)$1,200;Based on the data, how many shares of common stock are;outstanding?;21. Indicate the respective effects of the declaration;of a cash dividend on the following balance sheet sections;Total Assets Total;Liabilities Total Stockholders;Equity;22. Assume the following cost of goods sold data for a;company;2015 $1,300,000;2014 1,200,000;2013 1,000,000;If 2013 is the base year, what is the percentage;increase in cost of goods sold from 2013 to 2015?;23. A company has an average inventory on hand of;$75,000 and its average days in inventory is 36.5 days. What is the cost of;goods sold?;24. The following information is available for;Patterson Company;2014 2013;Accounts receivable $ 360,000 $ 340,000;Inventory 280,000 320,000;Net credit sales 3,000,000 2,600,000;Cost of goods sold 1,500,000 840,000;Net income 300,000 170,000;The accounts receivable turnover for 2014 is;25. All of the following situations below might;indicate a company has a low quality of earnings except;A lack of disclosure about guaranteed payments that;were mentioned in the MD&A of the annual report.


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