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charter oak acc101 final exam

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Question;Use the following to answer questions 1-2:Snappy, Inc. uses a perpetual inventory system. The;company's beginning inventory of a particular product and its purchases during;the month of January were as follows;Quantity Unit Cost Total;Cost;Beginning inventory (Jan. 1) 15 $;10 $ 150;Purchase (Jan. 11) 10;12 120;Purchase (Jan. 20) 18;15 270;Total 43 $ 540;On January 14, Snappy, Inc. sold 22 units of this;product. The other 21 units remained in;inventory at January 31.;1. Refer to the above data. Assuming that Snappy uses the FIFO flow;assumption, the cost of goods sold to be recorded at January 14 is;A) $306.;B) $234.;C) $318.;D) Some other amount.;Answer;? Question;2;0 out of 6.286 points;Use the following to answer;questions 1-2;Snappy, Inc. uses a perpetual inventory system. The;company's beginning inventory of a particular product and its purchases during;the month of January were as follows;Quantity Unit Cost Total;Cost;Beginning inventory (Jan. 1) 15 $;10 $ 150;Purchase (Jan. 11) 10;12 120;Purchase (Jan. 20) 18;15 270;Total 43 $ 540;On January 14, Snappy, Inc. sold 22 units of this;product. The other 21 units remained in;inventory at January 31.;2. Refer to the above data. Assuming that Snappy uses the LIFO flow;assumption, the cost of goods sold to be recorded at January 14 is;A) $222.;B) $234.;C) $318.;D) Some other amount.;Answer;? Question;3;6.286 out of 6.286 points;3.;On Saturday, June 30, PK Pool Supplies sold merchandise to John Krock on;account. The sales price was $5,300, and the cost of goods sold was $4,200. The;sales revenue was recorded immediately, but the entry recording the cost of;goods sold was dated Monday, July 2. As a result, net income for June was;A) Overstated by $5,300.;B) Overstated by $4,200.;C) Overstated by $1,100.;D) Not affected, but the net income for July is;understated.;Answer;? Question;4;6.286 out of 6.286 points;4.;In a period of rising prices, a company is most likely to use the FIFO;method of pricing inventory if;A) Each item in the inventory is unique.;B) Management wants the same unit cost assigned;to items sold and items remaining in inventory.;C) Management's primary objective is to;minimize income taxes.;D) Management wants the company's income;statement to indicate the highest possible amounts of gross profit and net;income.;Answer;? Question;5;6.286 out of 6.286 points;5.;Land and a warehouse were acquired for $980,000. What amounts should be;recorded in the accounting records for land and for the warehouse if an;appraisal showed the estimated values to be $450,000 for the land and $750,000;for the warehouse?;A) $450,000 for land, $530,000 for warehouse.;B) $367,500 for land, $612,500 for warehouse.;C) $450,000 for land, $750,000 for warehouse.;D) $230,000 for land, $750,000 for warehouse.;Answer;? Question;6;6.286 out of 6.286 points;6.;Carlson Imports sold a depreciable plant asset for cash of $35,000. The;accumulated depreciation amounted to $70,000, and a loss of $5,000 was;recognized on the sale. Under these circumstances, the original cost of the;asset must have been;A) $65,000.;B) $75,000.;C) $100,000.;D) $110,000.;Answer;? Question;7;6.286 out of 6.286 points;7.;An asset which costs $7,200 and has accumulated depreciation of $1,800;is sold for $4,500. What amount will be;recognized when the asset is sold?;A) A gain of $900;B) A loss of $900;C) A loss of $2,700;D) A gain of $2,700;Answer;? Question;8;6.286 out of 6.286 points;8.;Which of the following would not be amortized?;A) Oil well.;B) Copyright.;C) Franchise fee.;D) Patent.;Answer;? Question;9;6.286 out of 6.286 points;9.;A capital lease is recorded in the accounting records of the lessee by;an entry;A) Debiting Rent Expense and crediting Cash each;time a lease payment is made.;B);Debiting Cash and crediting Rental Revenue each time a lease payment is;received.;C) Debiting an asset account and crediting a;liability account for the present value of the future lease payments.;D) Debiting an asset account and crediting Sales;for the present value of the future lease payments.;Answer;? Question;10;6.286 out of 6.286 points;10.;Which of the following is an example of a contingent liability?;A) A lawsuit pending against a restaurant chain;for improper storage of perishable food items.;B) The liability for future warranty repairs on;computers sold during the current period.;C) A corporation's long-term employment;contract with its chief executive officer.;D) A liability for notes payable with interest;included in the face amount.;Answer;? Question;11;6.286 out of 6.286 points;Use the following to answer;questions 11-14;On November 1, Year 1, Dale Co. borrowed $50,000 from Town;Bank and signed a 12%, six-month note payable, all due at maturity. The;interest on this loan is stated separately.;11. Refer to the above data. How much must Dale;pay Town Bank on May 1, Year 2, when the note matures?;A) $50,000.;B) $56,000.;C) $53,000.;D) $52,000.;Answer;? Question;12;6.286 out of 6.286 points;Use the following to answer;questions 11-14;On November 1, Year 1, Dale Co. borrowed $50,000 from Town;Bank and signed a 12%, six-month note payable, all due at maturity. The;interest on this loan is stated separately.;12. Refer to the above data. How much interest expense will Dale recognize;on this note in Year 2?;A) $6,000.;B) $3,000.;C) $1,500.;D) $2,000.;Answer;? Question;13;6.286 out of 6.286 points;13.;Refer to the above data. At December 31, Year 1, Dale Co.'s overall;liability for this loan amounts to;A) $50,000.;B) $51,000.;C) $52,000.;D) $53,000.;Answer;? Question;14;6.286 out of 6.286 points;14.;Tivoli Corporation issued 300,000 shares of $4 par value common stock at;the time of its incorporation. The stock was issued for cash at a price of $15;per share. During the first year of operations, the company sustained a net;loss of $100,000. The year-end balance sheet would show the balance of the;Common Stock account to be;A) $1,200,000.;B) $1,100,000.;C) $4,500,000.;D) $4,400,000.;Answer;? Question;15;6.286 out of 6.286 points;15.;If the preferred stock of a corporation is cumulative;A) Dividends on preferred stock are guaranteed.;B) Dividends cannot be declared in an amount;less than that stated on the stock certificate.;C) Preferred stockholders participate in;dividends paid in excess of a stated amount on the common shares.;D) Dividends in arrears must be paid on;preferred stock before any dividend can be paid on common stock.;Answer;? Question;16;6.286 out of 6.286 points;16.;Treasury stock should most often be recorded;A) At cost.;B) Par value.;C) Fair market value at year end.;D) Face value.;Answer;? Question;17;6.29 out of 6.29 points;17.;From the viewpoint of stockholders or potential investors, which of the;following cash flow measurements would be of least importance?;A) The dollar amount of net cash flow from;operating activities for the current year.;B);The trend in net cash flow from operating activities from year to year.;C) The corporations's free cash flow for the;current year.;D) The dollar amount of overall increase or;decrease in cash for the current year.;Answer;? Question;18;6.29 out of 6.29 points;18.;When net cash flow from operating activities is presented by the direct;method, the statement of cash flows is accompaned by a supplementary schedule;reconciling;A) Net cash flow from operating activities with;net sales.;B) Net income with the net increase or decrease;in cash and cash equivalents.;C) Net Income with net cash flow from operating;activities.;D) Net cash flow from operating activities shown;in the statement with that which would result from use of the indirect method.;Answer;? Question;19;6.286 out of 6.286 points;19.;During the year 2007, Moonglow Corporation suffered a $600,000 loss when;its factory was destroyed in a flood.;Assuming the corporate income tax rate is 34%, what amount will Moonglow;report as an extraordinary loss on its income statement for 2007? Assume floods are not common in this area.;A) $600,000;B) $396,000;C) $204,000.;D) Nothing, since this does not qualify as an;extraordinary item.;Answer;? Question;20;6.286 out of 6.286 points;20.;Which of the following would be classified as an extraordinary item?;A) A;large gift given to the company.;B) A loss from obsolete inventory.;C) A loss from a natural disaster that affects;the company at infrequent intervals.;D) A loss from an enacted law that made;inventory unsalable.;Answer;D;D;? Question;21;6.286 out of 6.286 points;21.;On January 1, 2006, Lane Corporation had 50,000 shares of $5 par value;common stock outstanding. On March 31;2006, Lane issued an additional 8,000 shares in exchange for a building. What number of shares will be used in the;computation of basic EPS for the year 2006?;A) 50,000.;B) 58,000.;C) 56,000.;D);52,000.;Answer;? Question;22;6.286 out of 6.286 points;22.;Foster Company reports net income of $290,000 for 2006 and declared a;cash dividend of $1 per share on each of its 100,000 shares of common stock;outstanding. Earnings per share for 2006 is;A) $2.90 per share.;B) $1.00 per share.;C) $0.90 per share.;D) $1.90 per share.;Answer;? Question;23;6.286 out of 6.286 points;23.;Windsor Corporation's 2006 net income is smaller than net cash flow from;operating activities. Which of the;following would not be an explanation of why net income is smaller than net;cash flow from operating activities?;A) Windsor paid dividends to shareholders during;2006.;B) Windsor's accounts payable increased during;2006.;C) Windsor recognized depreciation expense in;2006.;D) Windsor sold equipment at a loss in 2006.;Answer;? Question;24;6.286 out of 6.286 points;24.;Early in 2006, Platt Corporation purchased marketable securities at a;cost of $70,000. In September, dividends;of $4,700 were received, Platt sold the securities in December at a gain of;$3,500. How would these transactions be;reported on Platt's statement of cash flows for 2006?;A) $3,500 net cash provided by investing;activities, $4,700 included in cash provided by operating activities.;B) $8,200 net cash provided by investing;activities.;C) $78,200 cash provided by investing;activities, $70,000 cash used in financing activities.;D) $65,300 net cash used in investing;activities, $73,500 cash provided by investing activities.;Answer;? Question;25;6.286 out of 6.286 points;25.;The accountant for Earth Institute, Inc., determined the cash flow for;several transactions to be as follows;Payment to pay off notes;payable.......................................... $175,000;Proceeds from issuance of bonds;payable.............................. 615,000;Payment to purchase;equipment............................................ 255,000;Payment of;wages................................................................ 95,000;Payment of;dividends............................................................ 135,000;On the;basis of the above transactions alone, determine the net cash flow from;financing activities.;A) $255,000 net cash used for financing;activities.;B) $440,000 net cash provided by financing;activities.;C) Zero: cash inflows equal cash outflows from;financing activities.;D) $305,000 net cash provided by financing;activities.;Answer;? Question;26;6.286 out of 6.286 points;26.;All of the following are considered cash equivalents except;A) Marketable securities;B) Money market funds;C) Commercial paper;D) Treasury bills;Answer;? Question;27;6.286 out of 6.286 points;27.;A stock dividend is reported on the;A) Financing section of the statement of cash;flows;B) Balance sheet;C) Income statement;D) Operating section of the statement of cash;flows;Answer;? Question;28;6.286 out of 6.286 points;28.;A statement of cash flows is not intended to assist investors in;evaluating;A) Reasons for differences between the amount of;net income and net cash flow from operations.;B) The company's ability to meet its;obligations and to pay dividends.;C) Noncash aspects of investing and financing;activities.;D) The profitability of business operations.;Answer;? Question;29;6.286 out of 6.286 points;Use the following to answer;questions 29-31;Shown below are selected data from the balance sheet of;HiTech, a small electronics store (dollar amounts are in thousands);Cash.................................................................................... $25;Accounts;receivable............................................................. 45;Inventory............................................................................. 80;Total;assets.......................................................................... 400;Current;liabilities................................................................... 100;Non current;liabilities............................................................ 240;29. Refer to the above data. The quick ratio is;A) 1.5 to 1.;B).7 to 1.;C).45 to 1.;D) Some other amount.;Answer;? Question;30;6.286 out of 6.286 points;Use the following to answer;questions 29-31;Shown below are selected data from the balance sheet of;HiTech, a small electronics store (dollar amounts are in thousands);Cash.................................................................................... $25;Accounts;receivable............................................................. 45;Inventory............................................................................. 80;Total;assets.......................................................................... 400;Current;liabilities................................................................... 100;Non current;liabilities............................................................ 240;30. Refer to the above data. The current ratio is;A) 5.0 to 1.;B) 1.5 to 1.;C).7 to 1.;D) Some other amount.;Answer;? Question;31;6.286 out of 6.286 points;Use the following to answer;questions 29-31;Shown below are selected data from the balance sheet of;HiTech, a small electronics store (dollar amounts are in thousands);Cash.................................................................................... $25;Accounts receivable............................................................. 45;Inventory............................................................................. 80;Total;assets.......................................................................... 400;Current liabilities................................................................... 100;Non current;liabilities............................................................ 240;31. Refer to the above data. Hi-Tech's debt ratio is;A) 85%.;B) 25%.;C) 60%.;D) Some other amount.;Answer;? Question;32;6.286 out of 6.286 points;Use the following to answer;questions 32-35;Shown below are selected data from the financial statements;of A-l Computers. (Dollar amounts are in;millions, except for the per-share data.);Income statement data;Net;sales...................................................................... $2,500;Cost of goods;sold........................................................ 1,300;Operating;expenses...................................................... 400;Net;income.................................................................. 75;Balance sheet data;Average total;equity....................................................... 300;Average total;assets...................................................... 4,000;Per share data (these amounts stated in actual dollars, not;millions);A-1 reported earnings per share for the year of $4 and paid;cash dividends of $1.50 per share. At;year-end, the Wall Street Journal listed A-1's capital stock as trading at $48;per share.;32. Refer to the above data. A-1's price/earnings ratio at year-end was;A).8.;B) 12.;C) 24.;D) Some other amount.;Answer;? Question;33;6.286 out of 6.286 points;Use the following to answer;questions 32-35;Shown below are selected data from the financial statements;of A-l Computers. (Dollar amounts are in;millions, except for the per-share data.);Income statement data;Net;sales...................................................................... $2,500;Cost of goods;sold........................................................ 1,300;Operating;expenses...................................................... 400;Net;income.................................................................. 75;Balance sheet data;Average total;equity....................................................... 300;Average total;assets...................................................... 4,000;Per share data (these amounts stated in actual dollars, not;millions);A-1 reported earnings per share for the year of $4 and paid;cash dividends of $1.50 per share. At;year-end, the Wall Street Journal listed A-1's capital stock as trading at $48;per share.;33. Refer to the above data. A-1's gross profit rate was;A) 20%.;B) 48%.;C) 52%.;D) Some other amount.;Answer;? Question;34;6.286 out of 6.286 points;Use the following to answer;questions 32-35;Shown below are selected data from the financial statements;of A-l Computers. (Dollar amounts are in;millions, except for the per-share data.);Income statement data;Net;sales...................................................................... $2,500;Cost of goods;sold........................................................ 1,300;Operating;expenses...................................................... 400;Net;income.................................................................. 75;Balance sheet data;Average total;equity....................................................... 300;Average total;assets...................................................... 4,000;Per share data (these amounts stated in actual dollars, not;millions);A-1 reported earnings per share for the year of $4 and paid;cash dividends of $1.50 per share. At;year-end, the Wall Street Journal listed A-1's capital stock as trading at $48;per share.;34. Refer to the above data. A-1's operating income was;A) $1,200.;B) $400.;C) $800.;D) Some other amount.;Answer;? Question;35;6.286 out of 6.286 points;Use the following to answer;questions 32-35;Shown below are selected data from the financial statements;of A-l Computers. (Dollar amounts are in;millions, except for the per-share data.);Income statement data;Net;sales...................................................................... $2,500;Cost of goods;sold........................................................ 1,300;Operating;expenses...................................................... 400;Net;income.................................................................. 75;Balance sheet data;Average total;equity....................................................... 300;Average total;assets...................................................... 4,000;Per share data (these amounts stated in actual dollars, not;millions);A-1 reported earnings per share for the year of $4 and paid;cash dividends of $1.50 per share. At;year-end, the Wall Street Journal listed A-1's capital stock as trading at $48;per share.;35. Refer to the above data. A-1's return on equity was;A) 10%.;B) 20%.;C) 25%.;D) Some other amount.;Answer

 

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