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Accounting 2101 final exam




Question;Principles;of Accounting 1 Spring 2010;Final;Exam (120 minutes);Version D;Name: (please;print);Instructor?s;Name;50 Multiple choice questions at 6.25 points;each for total points available of 312.50.;1.;In;the following journal entry, revenue is being recognized;A) at;the same time cash is collected;B) before;the cash is collected;C) after;the cash is collected;D) no;revenue is being recognized;2.;Up-State;Corporation ordered materials from Down-State Manufacturing on October 1;2008. Down-State shipped the materials by;rail on October 5 and the railroad notified Up-State on October 12 that the;goods had arrived. Up-State picked up;the materials on October 13. The terms;of the sale are FOB shipping point. On;what date should Up-State consider this a purchase?;A) October;1;B) October;5;C) October;12;D) October;13;3.;Company;X produces and sells 3 products: X1, X2, and X3. The company recently developed a new;advertising campaign for X3. The costs;incurred to develop this ad would be considered;A) facility-sustaining;costs;B) product-sustaining;costs;C) batch-related;costs;D) unit-related;costs;4.;An;unfavorable sale price variance reflects;A) Fewer;units sold than budgeted.;B) A;lower actual selling price than budgeted.;C) An;increase in the cost of products causing a decrease in income for the period.;D) A;decrease in the amount of cash received from customers.;5.;A;cash sale would impact the;A) income;statement only;B) balance;sheet and income statement only;C) balance;sheet and statement of cash flows only;D) balance;sheet, income statement, and statement of cash flows;6.;Limited;liability means;A) A;company is only liable for an amount that is established by a pre-set limit.;B) Creditors;are limited to just the cash available in the company at the time of the loss.;C) Creditors;of a company can only claim the assets of the firm and not the assets of the;owners of the firm.;D) Creditors;of a firm can claim all the assets of a company and all of the owners? personal;assets.;7.;In;times of declining prices, ______ generally result(s) in the ______ cost of;goods sold.;A) LIFO;and FIFO, same;B) FIFO;lower;C) LIFO;lower;D) LIFO;higher;Use the following to answer questions 8 and 9;ThinkStyles, Inc. applies manufacturing;overhead on the basis of the number of indirect labor hours required. The;following information is available;Estimated;Actual;Indirect Labor Hours;3,100;3,180;Manufacturing Overhead;Costs;$111,600;$124,000;8.;The;predetermined manufacturing overhead rate per indirect labor hour is;A) $35;B) $36;C) $39;D) $40;9.;The;amount of over/underapplied manufacturing overhead is;A) $9,520;underapplied;B) $3,200;underapplied;C) $12,400;underapplied;D) $12,400;overapplied;10. On April 30, Crossover Company had a general;ledger cash balance of $216,854. At the;end of April, the bank statement had a balance of $249,322. Deposits in transit amounted to $26,500 and;there was a service charge of $180.;Outstanding checks totaled $59,148.;What is the reconciled/adjusted amount of cash?;A) $183,706;B) $184,026;C) $216,674;D) None;of the above.;11.;The;journal entry to record wages earned by assembly line workers would include a;A) credit;to Indirect Labor;B) debit;to Finished Goods Inventory;C) debit;to Work In Process Inventory;D) credit;to Cost of Goods Manufactured;12.;On;September 1, 2009, Olpe Corporation paid $2,400 in advance for a one year;insurance policy that covers the period September 1, 2009 through August 31;2010. What amount of insurance expense;should Olpe report for the year ended December 31, 2009?;A) $800;B) $1,200;C) $2,400;D) $0;13. The Pacioli Manufacturing Company has kept track;of the number of units they have produced each month and the cost to produce;those units for the past six months.;Month;Number of Units;Cost of Units Produced;July;10,000;$60,000;Aug.;11,000;$66,000;Sept.;20,000;$110,000;Oct.;16,000;$90,000;Nov.;12,000;$70,000;Dec.;18,000;$102,000;Using the;high/low method, what is the estimated total cost if 14,000 units are produced;in January?;A) $62,000;B) $70,000;C) $75,000;D) $80,000;14.;Which;of the following would be part of the entry to record a sales return?;A) credit;to sales returns and allowances;B) debit;to accounts receivable;C) debit;to sales returns and allowances;D) debit;to cash;15.;Hasbrouck;Corporation used $63,500 of direct materials, $46,000 of direct labor, and;applied $94,500 of manufacturing overhead during October. Cost of goods sold for October was $218,200. Hasbrouck?s beginning and ending;work-in-process and finished goods inventories were as follows;Beginning;inventory;Ending;inventory;Finished;goods;$70,000;$61,500;Work-in-process;47,000;41,300;What was Hasbrouck's cost of goods;manufactured for October?;A) $209,700;B) $212,500;C) $234,800;D) None;of the above.;16. Halting, Inc. gathered the following;direct labor cost information for the month of July;Actual direct;labor hours;68,500;Standard;direct labor hours allowed;for actual production;67,200;Actual direct;labor rate per hour;$12.10;Standard;direct labor rate per hour;$11.75;The direct labor price variance is;A) $15,730U;B) $23,975U;C) $15,275F;D) $23,520F;17.;On;December 31, 2009, Voyager Products, Inc. received a $20,000 deposit from a;customer for a special order of merchandise to be manufactured and shipped in;January 2010. Voyager Products, Inc. made the following journal entry on;December 31, 2009;The financial statements dated;December 31, 2009 would be;A) correctly;stated;B) in;error, understating liabilities and overstating assets;C) in;error, overstating net income and understating liabilities;D) in;error, understating net income and understating stockholders' equity;18.;Allowance;for Uncollectible Accounts had a beginning and ending balance of $3,500 and;$4,600, respectively. If uncollectible;accounts expense was $9,500 for the period, the total dollar amount of accounts;written off during the period was;A) $13,000;B) $8,400;C) $10,600;D) $9,500;19. Kozicek Corporation reported credit;sales of $200,000, accounts receivable of;$110,000 at the;beginning of the year and accounts receivable of $150,000 at the end of the;year. Cash receipts/collections from;customers during the year were;A) $160,000;B) $200,000;C) $240,000;D) $310,000;20.;A;cost that does not change in total as the activity changes is a;A) Fixed;cost;B) Variable;cost;C) Mixed;cost;D) None;of the above;Use the following information for;questions 21 and 22.;Hepler Enterprises began the year;with $188,200 of finished goods inventory. During the year the company manufactured;goods costing $712,000. At the end of the year, $207,500 of finished goods;remained in inventory. Actual manufacturing overhead was $141,500 and applied;manufacturing overhead totaled $143,900.;21. Prior to any adjustment;for overhead application, cost of goods sold was;A) $692,700;B) $731,300;C) $774,000;D) $900,200;22.;Assuming the overapplied or underapplied manufacturing overhead was;considered small and, therefore, closed out to Cost of Goods Sold, the cost of;goods sold reported on the income statement for the period was;A) $675,000;B) $690,300;C) $695,100;D) $728,900;23.;The;Manhattan Company sells its one and only product for $89.00 per unit. Variable costs per unit amount to $63.50 and;total fixed costs are $3,697,500. If;Manhattan increases its selling price to $95, how will this affect the;breakeven point in units?;A) The;breakeven point will increase 27,619 units.;B) The;breakeven point will decrease 106,078 units.;C) The;breakeven point will increase 41,300 units.;D) The;breakeven point will decrease 27,619 units.;24.;Bonita;Enterprises purchased $42,000 of merchandise on account, terms 2/10, n/30.;Assuming Bonita uses the net price method to account for purchase discounts;and it pays for the merchandise on the 30th day after the purchase, the journal;entry to record the payment would include a;A) credit;to Cash for $41,160;B) credit;to Inventory for $42,000;C) debit;to Accounts Payable for $42,000;D) debit;to Purchase Discounts Lost for $840;25. A company?s accounts payable was $600,000 at the;beginning of the year and $632,000 at the end of the year. Cost of goods sold;for the year was $637,000. Inventory at;the beginning of the year was $420,000 and at the end of the year;$455,000. How much cash did the company;pay to its suppliers during the period?;A) $612,000;B) $640,000;C);$662,000;D) None;of the above;26. If a company?s selling price per unit;increases, what is the impact on its contribution margin and breakeven point?;Contribution Margin;Breakeven Point;A);Increase;Increase;B);Decrease;No effect;C);No effect;Increase;D);Increase;Decrease;27.;The;bookkeeper who records cash receipts also deposits daily cash receipts at the;bank on his way home from work. This is;a violation of which of the following characteristics of good internal control;A) requiring;proper authorization;B) separating;incompatible duties;C) physically;controlling assets and documents;D) maintaining;adequate documents and records;28. For 2008, Parker Inc. reported total liabilities;of $720,000, current assets of $235,000, and total shareholders? equity of;$1,250,000. What are Parker Inc.?s total;assets?;A) $1,735,000;B) $1,820,000;C) $1,970,000;D) $2,205,000;29. The Torbel Company ordered $80,000 of;inventory from Borton Industries and was given terms of 3/15 n/45. Which of the following describes how soon the;payment must be made in order to receive a discount and the amount of the;discount available?;Payment Made Within;Amount of Discount;A);Between 3 and 15Days;$12,000;B);45 Days;$ 9,600;C);Between 2 and 15;$ 2,400;D);Within 15 Days;$ 2,400;30.;The;following journal entry affected the accounting equation by;Cash XXX;Capital Stock XXX;A) increasing;assets and increasing liabilities;B) decreasing;assets and increasing owners equity;C) increasing;liabilities and decreasing owners equity;D) increasing;assets and increasing owners equity;31.;Moreland;Corp. purchased a building for $35 million that will house its new;manufacturing plant. This is part of;Moreland?s;A) Operating;activities;B) Financing;activities;C) Investing;activities;D) All;of the above;Use the following to;answer questions 32 and 33;Carrington Company has a perpetual inventory;system and uses the LIFO method of inventory costing. Carrington reported the following events;during the month of March;Number;of Units;Date;Event;Bought;Sold;Unit Price;Mar. 1;Beginning Inv.;100;$10;3;Purchase;75;$11;5;Sale;50;10;Purchase;140;$12;16;Sale;110;21;Sale;70;25;Purchase;175;$14;30;Sale;120;32.;The;cost of goods sold for the March 21st sale is;A) $700;B) $720;C) $785;D) $;840;33.;The;ending inventory on March 31st is;A) $1,440;B) $1,620;C) $1,640;D) $1,960;34.;Triple;Tee Company sells their only product for $22.00. Variable costs per unit are;$14.80, while total fixed costs amount to $550,000. The company wants to earn a before-tax profit;of $400,000. The total unit sales needed;to achieve the desired before-tax profit is;A) 64,190;B) 76,389;C) 131,945;D) 137,266;35.;Distance;Solutions? president receives a bonus equal to 8% of income before tax and;bonus. If the tax rate is 30%, what is;Distance Solutions? net income for the year assuming income before tax and;bonus was $1,300,000?;A) $104,000;B) $390,000;C) $806,000;D) $837,200;36. Pratt Company currently produces and;sells 12,000 units of its product each month at a sales price of $15 each. Another firm has offered to buy an additional;1,000 units at $10 per unit. Pratt?s;total cost per unit is as follows;Fixed costs per unit are based on production of 12,000 units per;month. Pratt Company currently has the;capacity to produce 15,000 units per month.;By how much would profit change if Pratt accepts this offer?;A) $7,000 increase;B) $5,500;increase;C) $1,700;increase;D) $300;decrease;37.;If;a product has a cost of $600 and a selling price of $1,800, what is the;product?s markup percentage?;A) 33%;B) 67%;C) 150%;D) 200%;38.;Grover;Company?s economic order quantity is 2,800 units. Demand for the year is 108,000 units. There are three days between the time an;order is placed and the day it is received.;Grover operates 360 days per year.;What is the daily demand?;A) 300;B) 900;C) 934;D) 2,700;39.;WyKan;Corporation sells three types of speaker systems, the Model A, the Model B and;the Model C. The profit report for these speaker systems for the most recent;period is shown below by product line.;The facility sustaining costs are fixed and allocated as shown below;between each of the three product lines.;Model A;Model B;Model;C;Sales;$200,000;$95,000;$155,000;Variable Costs;110,000;60,000;124,000;Contribution Margin;$90,000;$35,000;$31,000;Facility Sustaining Cost;50,000;30,000;40,000;Net Income (Loss);$40,000;$5,000;$(9,000);Wykan?s president insists on;discontinuing Model C. He obviously has;not taken acct 2101! What will be the;company?s net income (loss) after eliminating Model C?;A) $45,000;B) $36,000;C) $(9,000);D) $5,000;40.;Palisades;Corporation purchased equipment by signing a long-term note payable. What was the effect of this transaction?;A) increased;assets and increased liabilities;B) increased;assets and increased owners equity;C) increased;assets and decreased owners equity;D) increased;owners equity and decreased liabilities;41. The most likely explanation for the;following journal entry would be;A) performed;a service and immediately received the cash;B) performed;a service and billed the customer;C) performed;a service for a customer who had paid for the service ahead of time;D) recorded;the receipt of cash from a customer for services previously performed;Use the following information for questions 42;and 43.;Hepburn Corporation's sales price is $30 per;unit. Unit sales information is;presented below;March (Actual);April (Estimated);May (Estimated);Cash sales;10,000;12,000;13,000;Credit sales;30,000;40,000;45,000;Management estimates that 5% of credit sales are;uncollectible, 30 % are collected in the month of sale, and 65% in the;following month. The March 31 ending inventory is 5,500 units, and Hepburn;wants to have 10% of the next month's sales in ending inventory.;42.;What;are Hepburn Corporation's expected sales revenue and cash receipts for April?;Sales Revenue;Cash Receipts;A);$1,560,000;$1,305,000;B);$1,560,000;$945,000;C);$1,200,000;$945,000;D);$960,000;$870,000;43.;How;many units should Hepburn produce during April?;A) 52,300;B) 52,400;C) 52,600;D) 57,800;44. Net income is found on which of the following two;financial statements?;A) Balance;Sheet and Income Statement;B) Statement;of Shareholders Equity and Balance Sheet;C) Statement;of Cash Flows and Balance Sheet;D) Income;Statement and Statement of Shareholders Equity;45.;What;is a perpetual inventory system?;A) A;system that keeps a continuous record of the cost of inventory on hand and the;cost of inventory sold.;B) A;system that determines the inventory at the end of each accounting period by;physically counting it.;C);A system that records cash on hand.;D) None;of the above.;46.;Memory;Time Picture Frame Co. manufactures picture frames and incurs many different;types of costs. The cost of the glass;for the picture frames, assuming it is significant to the overall cost, would;be a;A) direct;material cost;B) direct;labor cost;C) manufacturing;overhead cost;D) selling;and administrative cost;47. Lyco Company is a service firm. The company showed the following activities;for the current month;?;Provided;services for a client who will pay $82,000 next month.;?;Provided;services for a client and received $30,000 cash.;?;Received a;$10,000 advance payment for services to be provided next month.;?;Used $7,000;of office supplies to provide services.;?;Employees;were owed $25,000 for work performed in the current month.;What is the accrual;basis income for the current month?;A) $90,000;B) $80,000;C) $72,000;D) $23,000;48.;Fostoria;Corporation began the current period with $21,975 of direct materials;purchased $97,950 of direct materials and $8,230 of indirect materials during;the period and ended the period with $30,205 of direct materials. The total amount of direct materials put into;production during the current period was;A) $119,925;B) $97,950;C) $89,720;D) $106,670;49. J & C Electronics, Inc. gathered;the following direct materials cost information for the month of July;Standard Quantity Allowed;for production;34,700 gallons;Quantity used in production;33,900 gallons;Actual price per gallon;purchased;$8.50;Standard price per gallon;$8.85;The;direct materials usage variance is;A) $;4,250U;B) $;4,425F;C) $6,800U;D) $7,080F;50.;Anthony;Company sold merchandise on account to a customer at a price of $5,000. The merchandise had cost Anthony $4,200. The terms of the sales were 3/10, n/30. If the customer paid within the discount;period, by how much did this transaction increase Anthony's net income?;A) $5,000;B) $4,850;C) $ 650;D) $ 300


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