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ACC 422 Final Exam WileyPlus

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Question;ACC 422 Final Exam;WileyPlus;Question 1;Kraft;Enterprises owns the following assets at December 31, 2012.;Cash;in bank?savings account 67;516 Checking account;balance 26,445;Cash;on Hand 9,478 Postdated checks 753;Cash;refund due from IRS 40,324 Certificates of deposit(180 day) 94,754;What;amount should be reported as cash?;Question 2;Presented;below is information related to Rembrandt Inc.'s inventory.;Per;Units Skis Boots Parkas;Historical;Cost $254.22 $141.83 $70.91;Selling;Price 290.35 194.01 98.68;Cost;to distribute 25.42 10.70 3.35;Current;replacement cost 271.61 140.49 68.24;Normal;profit margin 42.82 38.80 28.43;Determine;the following;a).;the two limits to market value (e.g., the ceiling and the floor) that should be;used in the lower of cost or market computation for skis, (Round answers to 2;decimal places, e.g. 20.25.);b).;the cost amount that should be used in the lower of cost or market comparison;of boots, (Round answer to 2 decimal places, e.g. 20.25.);c).;the market amount that should be used to value parkas on the basis of the lower;of cost or market. (Round answer to 2 decimal places, e.g. 20.25.);Question 3;Matlock;Company uses a perpetual inventory system. Its beginning inventory consists of 74;units that cost $44 each. During June, the company purchased 222 units at $44;each, returned 9 units for credit, and sold 185 units at $74 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.;Units Unit Cost Total Cost;April;1 inventory 250 $16 $4,000;April;15 purchase 400 19;7,600;April;23 purchase 350 21 7,350;1,000 $18,950;Compute;the April 30 inventory and the April cost of goods sold using the average cost;method. (Round computations for cost per unit to 2 decimal places, e.g. 10.25;and answers to 0 decimal places, e.g. 2,250.);Question 5;Amsterdam;Company uses a periodic inventory system. For April, when the company sold 600;units, the following information is available.;Units Unit Cost Total Cost;April;1 inventory 250 $13 $3,250;April;15 purchase 400 16 6,400;April;23 purchase 350 17 5,950;1,000 $15,600;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.;Units Unit Cost;January;1, 2012(beginning inventory)768 $8.00;Purchases;January;5, 2012 1,536 9.00;January;25, 2012 1,664 10.00;February;16, 2012 1,024 11.00;March;26, 2012 768 12.00;A;physical inventory on March 31, 2012, shows 2,048 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;Item Cost Replacement Cost (NRV) NRV- Normal Profit Marging;Jokers $2,236 $2,292 $2,348 $1,789;Penguins 5,590 5,702 5,534 4,584;Riddlers 4,919 5,087 4,282 4,137;Scarecrows 3,578 3,343 4,282 3,432;Question 8;Kumar;Inc. uses a perpetual inventory system. At January 1, 2013, inventory was;$241,606 at both cost and market value. At December 31, 2013, the inventory was;$322,894 at cost and $303,701 at market value. Prepare the necessary December;31 entry under;(a);the;cost of goods sold method;(b) the loss method;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. (Round computation for;cost-to-retail ratio percentage and answer to 0 decimal places, e.g. 25,250.);Question 10;Astaire;Company uses the gross profit method to estimate inventory for monthly;reporting purposes. Presented below is information for the month of May.;Inventory;May 1 $184,000;Purchases;(gross) 736, 000;Freight-in 34, 500;Sales 1,150,000;Sales;returns 80,500;Purchase;discounts 13,800;Compute;the estimated inventory at May 31, assuming that the gross profit is 25% of;sales;Compute;the estimated inventory at May 31, assuming that the gross profit is 25% of;cost;Question 11;Previn;Brothers Inc. purchased land at a price of $27,400. Closing costs were $2,550.;An old building was removed at a cost of $10,530. What amount should be;recorded as the cost of the land?;Question 12;Garcia;Corporation purchased a truck by issuing an $90,400, 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. (Round answers to 0 decimal places, e.g. 15,510. List;multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.;Hint: Use tables in text.);Question 13;Mohave;Inc. purchased land, building, and equipment from Laguna Corporation for a cash;payment of $431,550. The estimated fair values of the assets are land $82,200;building $301,400, and equipment $109,600. At what amounts should each of the;three assets be recorded? (Note: Do not round the computation of the % of;total.);Question 14;Fielder;Company obtained land by issuing 2,000 shares of its $11 par value common;stock. The land was recently appraised at $91,800. The common stock is actively;traded at $44 per share. Prepare the journal entry to record the acquisition of;the land. (List multiple debit/credit entries from largest to smallest amount;e.g. 10, 5, 2.);Question 15;Navajo;Corporation traded a used truck (cost $22,600, accumulated depreciation;$20,340) for a small computer worth $4,181. Navajo also paid $1,130 in the;transaction. Prepare the journal entry to record the exchange. (The exchange;has commercial substance.) (List multiple debit/credit entries from largest to;smallest amount, e.g. 10, 5, 2.);Question 16;Mehta;Company traded a used welding machine (cost $12,330, accumulated depreciation;$4,110) for office equipment with an estimated fair value of $6,850. Mehta also;paid $4,110 cash in the transaction. Prepare the journal entry to record the;exchange. (The exchange has commercial substance.) (List multiple debit/credit;entries from largest to smallest amount, e.g. 10, 5, 2.);Question 17;Depreciation;is normally computed on the basis of the nearest;a).;Full month and to the nearest cent.;b).;Full month and to the nearest dollar;c).;Day and to the nearest cent.;d).;Day and to the nearest dollar;Question 18;Fernandez;Corporation purchased a truck at the beginning of 2012 for $43,260. The truck;is estimated to have a salvage value of $2,060 and a useful life of 164,800;miles. It was driven 23,690 miles in 2012 and 31,930 miles in 2013. Compute;depreciation expense for 2012 and 2013.(Round answers to 0 decimal places, i.e.;2,250.);Question 19;Lockhard;Company purchased machinery on January 1, 2012, for $77,400. The machinery is;estimated to have a salvage value of $7,740 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.(Round answer to 0;decimal places, i.e. 2,250.);Question 20;Jurassic;Company owns machinery that cost $955,800 and has accumulated depreciation of;$382,320. The expected future net cash flows from the use of the asset are;expected to be $531,000. The fair value of the equipment is $424,800. Prepare;the journal entry, if any, to record the impairment loss.;Question 21;Everly;Corporation acquires a coal mine at a cost of $496,800. Intangible development;costs total $124,200. After extraction has occurred, Everly must restore the;property (estimated fair value of the obligation is $99,360), after which it;can be sold for $198,720. Everly estimates that 4,968 tons of coal can be;extracted. If 869 tons are extracted the first year, prepare the journal entry;to record depletion.;Question 22;Francis;Corporation purchased an asset at a cost of $42,800 on March 1, 2012. The asset;has a useful life of 8 years and a salvage value of $4,280. For tax purposes;the MACRS class life is 5 years. Compute tax depreciation for each year;2012?2017. (Round answers to 0 decimal places.);Question 23;Celine;Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for;$54,600. 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 $757,100, and sales of;this product the first year totaled $400,710. Karen Austin anticipates earning;$934,990 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).;Disclosure in note form only;b).;recognition of a loss and creation of a liability for the value of the;land;c).;recognition of a loss only;d).;creation of a liability only;Question 26;Roley;Corporation uses a periodic inventory system and the gross method of accounting;for purchase discounts. On July 1, Roley purchased $73,000 of inventory, terms;2/10, n/30, FOB shipping point. Roley paid freight costs of $1,300. On July 3;Roley returned damaged goods and received credit of $7,300. On July 10, Roley;paid for the goods. Prepare all necessary journal entries for Roley. (For;multiple debit/credit entries, list amounts from largest to smallest, e.g. 10;8, 6);Question 27;Takemoto;Corporation borrowed $105,600 on November 1, 2012, by signing a $107,976;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 $584,000 of 9% bonds, due in 15 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. Round your answer to zero decimal places, e.g. 2,510.);Question 29;Indiana;Jones Company enters into a 6-year lease of equipment on January 1, 2012, which;requires 6 annual payments of $36,920 each, beginning January 1, 2012. In;addition, the lessee guarantees a residual value of $20,720 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;$180,505. Prepare Lost Ark's January 1, 2012, journal entries.;Question 30;On;January 1, 2012, Irwin Animation sold a truck to Peete Finance for $25,250 and;immediately leased it back. The truck was carried on Irwin's books at $20,000.;The term of the lease is 5 years, and title transfers to Irwin at lease-end. The;lease requires five equal rental payments of $6,832 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. (Round your;answer to the nearest dollar eg 58,591.?For multiple;debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

 

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