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ACC 422 Final Exam WileyPlus




Question;ACC 422 Final Exam WileyPlusQuestion 2;Presented below is information;related to Rembrandt Inc.'s inventory.;(per unit) Skis Boots Parkas;Historical Cost 273.79 152.75 76.37;Selling Price 312.70 208.95 106.27;Cost to distribute 27.38 11.53 3.60;Current replacement cost 292.52 151.31 73.49;Normal profit margin 46.11 41.79 30.62;Determine the following;Question 3;Matlock Company uses a perpetual;inventory system. Its beginning inventory consists of 67 units that cost $40;each. During June, the company purchased 202 units at $40 each, returned 8;units for credit, and sold 168 units at $67 each. Journalize the June;transactions.;Question 4;Amsterdam Company uses a periodic;inventory system. For April, when the company sold 700 units, the following;information is available.;Compute the April 30 inventory and;the April cost of goods sold using the average cost method.;Question 5;Amsterdam Company uses a periodic;inventory system. For April, when the company sold 600 units, the following;information is available.;Compute the April 30 inventory and;the April cost of goods sold using the FIFO method.;Question 6;(FIFO, LIFO, Average Cost Inventory);Esplanade Company was formed on;December 1, 2011. The following information is available from Esplanade's;inventory records for Product BAP.;Purchases Units Unit Cost;January 1, 2012(beginning;inventory)762 8.00;January 5, 2012 1,524 9.00;January 25, 2012 1,651 10.00;February 16, 2012 1,061 11.00;March 26, 2012 762 12.00;A physical inventory on March 31;2012, shows 2,032 units on hand. Prepare schedules to compute the ending;inventory at March 31, 2012, under each of the following inventory methods.;Assume Esplanade Company uses the periodic inventory method.;Question 7;Floyd Corporation has the following;four items in its ending inventory. Determine the final lower of cost or market;inventory value for each item.;Question 8;Kumar Inc. uses a perpetual;inventory system. At January 1, 2013, inventory was $320,786 at both cost and;market value. At December 31, 2013, the inventory was $428,714 at cost and;$403,231 at market value. Prepare the necessary December 31 entry under;Question 9;Boyne Inc. had beginning inventory;of $15,000 at cost and $25,000 at retail. Net purchases were $150,000 at cost;and $212,500 at retail. Net markups were $12,500, net markdowns were $8,750;and sales were $196,250. Compute ending inventory at cost using the;conventional retail method.;Question 10;(Gross Profit Method);Astaire Company uses the gross;profit method to estimate inventory for monthly reporting purposes. Presented;below is information for the month of May.;Question 11;Previn Brothers Inc. purchased land;at a price of $30,400. Closing costs were $1,820. An old building was removed;at a cost of $14,850. What amount should be recorded as the cost of the land?;Question 12;Garcia Corporation purchased a;truck by issuing an $108,000, 4-year, zero-interest-bearing note to Equinox;Inc. The market rate of interest for obligations of this nature is 10%. Prepare;the journal entry to record the purchase of this truck.;Question 13;Mohave Inc. purchased land;building, and equipment from Laguna Corporation for a cash payment of $352,800.;The estimated fair values of the assets are land $67,200, building $246,400;and equipment $89,600. At what amounts should each of the three assets be;recorded?;Question 14;Fielder Company obtained land by;issuing 2,000 shares of its $12 par value common stock. The land was recently;appraised at $103,700. The common stock is actively traded at $50 per share.;Prepare the journal entry to record the acquisition of the land.;Question 15;Navajo Corporation traded a used;truck (cost $23,600, accumulated depreciation $21,240) for a small computer;worth $4,366. Navajo also paid $1,180 in the transaction. Prepare the journal;entry to record the exchange.;Question 16;Mehta Company traded a used welding;machine (cost $10,080, accumulated depreciation $3,360) for office equipment;with an estimated fair value of $5,600. Mehta also paid $3,360 cash in the;transaction. Prepare the journal entry to record the exchange.;Question 17;Depreciation is normally computed;on the basis of the nearest;A). full month and to the nearest;dollar.;B). day and to the nearest cent.;C). day and to the nearest dollar.;D). full month and to the nearest;cent.;Question 18;Fernandez Corporation purchased a;truck at the beginning of 2012 for $54,180. The truck is estimated to have a;salvage value of $2,580 and a useful life of 206,400 miles. It was driven;29,670 miles in 2012 and 39,990 miles in 2013. Compute depreciation expense for;2012 and 2013.;Question 19;Lockhard Company purchased;machinery on January 1, 2012, for $79,200. The machinery is estimated to have a;salvage value of $7,920 after a useful life of 8 years.;(a) Compute 2012 depreciation;expense using the double-declining balance method.;(b) Compute 2012 depreciation;expense using the double-declining balance method assuming the machinery was;purchased on October 1, 2012.;Question 20;Jurassic Company owns machinery;that cost $1,145,700 and has accumulated depreciation of $458,280. The expected;future net cash flows from the use of the asset are expected to be $636,500.;The fair value of the equipment is $509,200. Prepare the journal entry, if any;to record the impairment loss.;Question 21;Everly Corporation acquires a coal;mine at a cost of $501,600. Intangible development costs total $125,400. After;extraction has occurred, Everly must restore the property (estimated fair value;of the obligation is $100,320), after which it can be sold for $200,640. Everly;estimates that 5,016 tons of coal can be extracted. If 878 tons are extracted;the first year, prepare the journal entry to record depletion.;Question 22;Francis Corporation purchased an;asset at a cost of $58,200 on March 1, 2012. The asset has a useful life of 8;years and a salvage value of $5,820. For tax purposes, the MACRS class life is;5 years. Compute tax depreciation for each year 2012?2017.;Question 23;Celine Dion Corporation purchases a;patent from Salmon Company on January 1, 2012, for $50,820. The patent has a;remaining legal life of 16 years. Celine Dion feels the patent will be useful;for 10 years. Prepare Celine Dion's journal entries to record the purchase of the;patent and 2012 amortization.;Question 24;Karen Austin Corporation has;capitalized software costs of $768,500, and sales of this product the first;year totaled $390,630. Karen Austin anticipates earning $911,470 in additional;future revenues from this product, which is estimated to have an economic life;of 4 years. Compute the amount of software cost amortization for the first;year.;(a) Compute the amount of software;cost amortization for the first year using the percent of revenue approach.;(b) Compute the amount of software;cost amortization for the first year using the straight-line approach.;Question 25;Jeff Beck is a farmer who owns land;which borders on the right-of-way of the Northern Railroad. On August 10, 2012;due to the admitted negligence of the Railroad, hay on the farm was set on fire;and burned. Beck had had a dispute with the Railroad for several years;concerning the ownership of a small parcel of land. The representative of the;Railroad has offered to assign any rights which the Railroad may have in the;land to Beck in exchange for a release of his right to reimbursement for the;loss he has sustained from the fire. Beck appears inclined to accept the;Railroad's offer. The Railroad's 2012 financial statements should include the;following related to the incident;A). recognition of a loss only.;B). creation of a liability only.;C). disclosure in note form only.;D). recognition of a loss and;creation of a liability for the value of the land.;Question 26;Roley Corporation uses a periodic;inventory system and the gross method of accounting for purchase discounts. On;July 1, Roley purchased $66,000 of inventory, terms 2/10, n/30, FOB shipping;point. Roley paid freight costs of $1,210. On July 3, Roley returned damaged;goods and received credit of $6,600. On July 10, Roley paid for the goods.;Prepare all necessary journal entries for Roley.;Question 27;Takemoto Corporation borrowed;$93,000 on November 1, 2012, by signing a $95,093, 3-month;zero-interest-bearing note. Prepare Takemoto's November 1, 2012, entry, the;December 31, 2012, annual adjusting entry, and the February 1, 2013, entry.;(For multiple debit/credit en tries, list amounts from largest to smallest;e.g. 10, 8, 6. Round all answers to 0 decimal places, e.g. 11,150.);Question 28;Whiteside Corporation issues;$629,000 of 9% bonds, due in 14 years, with interest payable semiannually. At;the time of issue, the annual market rate for such bonds is 10%. Compute the;issue price of the bonds.(Use the present value tables in the text.;Question 29;Indiana Jones Company enters into a;6-year lease of equipment on January 1, 2012, which requires 6 annual payments;of $37,560 each, beginning January 1, 2012. In addition, the lessee guarantees;a residual value of $20,870 at lease-end. The equipment has a useful life of 6;years. Assume that for Lost Ark Company, the lessor, collectibility is;reasonably predictable, there are no important uncertainties concerning costs;and the carrying amount of the machinery is $191,722. Prepare Lost Ark's;January 1, 2012, journal entries.;Question 30;On January 1, 2012, Irwin Animation;sold a truck to Peete Finance for $26,050 and immediately leased it back. The;truck was carried on Irwin's books at $20,800. The term of the lease is 5 years;and title transfers to Irwin at lease-end. The lease requires five equal rental;payments of $7,048 at the end of each year. The appropriate rate of interest is;11%, and the truck has a useful life of 5 years with no salvage value. Prepare;Irwin's 2012 journal entries.


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