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ACC291 Principles of Accounting II Final Exam

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Question;1) Hahn Company uses the percentage of sales;method for recording bad debts expense. For the year, cash sales are;$300,000 and credit sales are $1,200,000. Management estimates that 1%;is the sales percentage to use. What adjusting entry will Hahn Company;make to record the bad debts expense?;A.;Bad Debts Expense................................ $15,000;Allowances for Doubtful Accounts................................ $15,000;B.;Bad Debts Expense................................ $12,000;Allowances for Doubtful Accounts................................ $12,000;C.;Bad Debts Expense................................ $12,000;Accounts Receivable................................................. $12,000;D.;Bad Debts Expense................................ $15,000;Accounts Receivable................................................. $15,000;2) Using the percentage of receivables method for recording bad debts;expense, estimated uncollectible accounts are $15,000. If the balance of;the Allowance for Doubtful Accounts is $3,000 credit before adjustment;what is the amount of bad debts expense for that period?;A.;$15,000;B.;$12,000;C.;$18,000;D.;$8,000;3) Intangible assets;A.;should be reported under the heading Property, Plant, and Equipment;B.;should be reported as a separate classification on the balance sheet;C.;should be reported as Current Assets on the balance sheet;D.;are not reported on the balance sheet because they lack physical substance;4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that;A.;must be generated internally;B.;are depletable natural resources;C.;do not have physical substance;D.;have been exchanged at a gain;5) The book value of an asset is equal to the;A.;asset?s market value less its historic cost;B.;blue book value relied on by secondary markets;C.;replacement cost of the asset;D.;asset?s cost less accumulated depreciation;6) Gains on an exchange of plant assets that has commercial substance are;A.;deducted from the cost of the new asset acquired;B.;deferred;C.;not possible;D.;recognized immediately;7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as;A.;capital expenditures;B.;expense expenditures;C.;improvements;D.;revenue expenditures;8) Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as;A.;capital expenditures;B.;expense expenditures;C.;ordinary repairs;D.;revenue expenditures;9) When an interest-bearing note matures, the balance in the Notes Payable account is;A.;less than the total amount repaid by the borrower;B.;the difference between the maturity value of the note and the face value of the note;C.;equal to the total amount repaid by the owner;D.;greater than the total amount repaid by the owner;10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be;A.;$12,000;B.;$6,000;C.;$3,000;D.;$2,000;11) If a corporation issued $3,000,000 in bonds which pay 10% annual;interest, what is the annual net cash cost of this borrowing if the;income tax rate is 30%?;A.;$3,000,000;B.;$90,000;C.;$300,000;D.;$210,000;12) Hilton Company issued a four-year interest-bearing note payable for;$300,000 on January 1, 2011. Each January the company is required to pay;$75,000 on the note. How will this note be reported on the December 31;2012 balance sheet?;A.;Long-term debt, $300,000.;B.;Long-term debt, $225,000.;C.;D.;Long-term debt, $225,000, Long-term debt due within one year, $75,000.;13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011;for 648,666, which reflects an effective-interest rate of 8%. Interest;is paid semiannually on January 1 and July 1. If the corporation uses;the effective-interest method of amortization of bond premium, the;amount of bond interest expense to be recognized on July 1, 2011, is;A.;$30,000;B.;$24,000;C.;$32,434;D.;$25,946;14) When the effective-interest method of bond discount amortization is used;A.;the applicable interest rate used to compute interest expense is the;prevailing market interest rate on the date of each interest payment;date;B.;the carrying value of the bonds will decrease each period;C.;interest expense will not be a constant dollar amount over the life of the bond;D.;interest paid to bondholders will be a function of the effective-interest rate on the date the bonds were issued;15) If a corporation has only one class of stock, it is referred to as;A.;classless stock;B.;preferred stock;C.;solitary stock;D.;common stock;16) Capital stock to which the charter has assigned a value per share is called;A.;par value stock;B.;no-par value stock;C.;stated value stock;D.;assigned value stock;17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative;preferred stock and 50,000 shares of $1 par value common stock;outstanding at December 31, 2011. What is the annual dividend on the;preferred stock?;A.;$50 per share;B.;$5,000 in total;C.;$500 in total;D.;$.50 per share;18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative;preferred stock and 20,000 shares of $1 par value common stock;outstanding at December 31, 2011. There were no dividends declared in;2010. The board of directors declares and pays a $45,000 dividend in;2011. What is the amount of dividends received by the common;stockholders in 2011?;A.;$0;B.;$25,000;C.;$45,000;D.;$20,000;19) When the selling price of treasury stock is greater than its cost, the company credits the difference to;A.;Gain on Sale of Treasury Stock;B.;Paid-in Capital from Treasury Stock;C.;Paid-in Capital in Excess of Par Value;D.;Treasury Stock;20) The purchase of treasury stock;A.;decreases common stock authorized;B.;decreases common stock issued;C.;decreases common stock outstanding;D.;has no effect on common stock outstanding;21) Marsh Company has other operating expenses of $240,000. There has;been an increase in prepaid expenses of $16,000 during the year, and;accrued liabilities are $24,000 lower than in the prior period. Using;the direct method of reporting cash flows from operating activities;what were Marsh's cash payments for operating expenses?;A.;$228,000;B.;$232,000;C.;$200,000;D.;$280,000;22) Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?;A.;Operating activities section;B.;Investing activities section;C.;Financing activities section;D.;Does not represent a cash flow;23) In performing a vertical analysis, the base for cost of goods sold is;A.;total selling expenses;B.;net sales;C.;total revenues;D.;total expenses;24) Blanco, Inc. has the following income statement (in millions);BLANCO, INC.;Income Statement;For the Year Ended December 31, 2011;Net Sales.............................. $200;Cost of Goods Sold.............................. 120;Gross Profit.............................. 80;Operating Expenses.............................. 44;Net Income.............................. $ 36;Using vertical analysis, what percentage is assigned to Net Income?;A.;100%;B.;82%;C.;18%;D.;25%;25) Dawson Company issued 500 shares of no-par common stock for $4,500.;Which of the following journal entries would be made if the stock has a;stated value of $2 per share?;A.;Cash........................................................... $4,500;Common Stock 4,500;B.;Cash.................................... $4,500;Common Stock 1,000;Paid-In Capital in Excess of Par 3,500;C.;Cash...................... $4,500;Common Stock 1,000;Paid-In Capital in Excess of Stated Value 3,500;D.;Common Stock........................................................... $4,500;Cash 4,500;26) Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par;value common stock. This stock was sold later at a selling price of $6;per share. The entry to record the sale includes a;A.;credit to Paid-In Capital from Treasury Stock for $9,000;B.;credit to Retained Earnings for $9,000;C.;debit to Pain-In Capital from Treasury Stock for $45,000;D.;debit to Retained Earnings for $45,000;27) Which of the following is a fundamental factor in having an effective, ethical corporate culture?;A.;Efficient oversight by the company?s Board of Directors;B.;Workplace ethics;C.;Code of conduct;D.;Ethics management programs;28) Two individuals at a retail store work the same cash register. You evaluate this situation as;A.;a violation of establishment of responsibility;B.;a violation of segregation of duties;C.;supporting the establishment of responsibility;D.;supporting internal independent verification;29) The Sarbanes-Oxley Act imposed which new penalty for executives?;A.;Fines;B.;Suspension;C.;Criminal prosecution for executives;D.;Return of ill-gotten gains;30) The Sarbanes-Oxley Act requires that all publicly traded companies;maintain a system of internal controls. Internal controls can be defined;as a plan to;A.;safeguard assets;B.;monitor balance sheets;C.;control liabilities;D.;evaluate capital stockScore:27/30

 

Paper#40067 | Written in 18-Jul-2015

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