Details of this Paper

ACG 2011 ? Final Exam 100% Correct Solution

Description

solution


Question

Question;Instructions: You will need a calculator to complete this test.1. Depreciation:a. Measures the decline in market value of an asset.b. Is the process of allocating to expense the cost of a plant assetc. Is an outflow of cash from the use of a plant assetd. Is applied to land.2. Lomax Enterprises purchased a depreciable asset for $22,000 on March 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset?s salvage value is $2,000, Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of:Dep = (22000-2000)/4 = 5000a. $19,166.67b. $5,000.00c. $5,500.00d. $20,000.003. Saturn Co. purchases a used machine for $167,000 cash on January 2 and readies it for use the next day at a $3,420 cost. On January 3 it is installed on a required operating platform costing $1,080 and it is further readied for operations. The company predicts the machine will be used for six years and have a $14,600 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operation. It is sold for $13,500 cash. Prepare the journal entry for the sale:a. Date General Journal Debit CreditDec. 31 Cash 14,600Gain on sale of machinery 21,650Accumulated depreciation ? machinery 130,750 Machinery 167,000b. Date General Journal Debit CreditDec. 31 Cash 14,600Loss on sale of machinery 152,400Machinery 167,000c. Date General Journal Debit CreditDec. 31 Cash 13,500Loss on sale of machinery 27,250Machinery 40,750d. Date General Journal Debit CreditDec. 31 Cash 13,500Loss on sale of machinery 27,250Accumulated depreciation ? machinery 130,750Machinery 171,5004. MRI Company has one employee that makes $7,200 per month. FICA Social Security taxes are 6.2% and FICA Medicare taxes are 1.45% of gross pay. Prepare the employer?s April 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employee?s federal income taxes withheld by the employer are $135 for this pay period.a. Date General Journal Debit CreditSept. 30 Salaries expense 7,200Cash 7,200b. Date General Journal Debit CreditSept. 30 Cash 7,200FUTA 56.00SUTA 101.50Employee federal income taxes payable 135.00Accrued payroll payable 6,907.50c. Date General Journal Debit CreditSept. 30 Salaries expense 7,200FICA ? Social security taxes payable 44.64FICA ? Medicare taxes payable 10.44Employee federal income taxes payable 135.00Accrued payroll payable 7,009.92d. Date General Journal Debit CreditSept. 30 Salaries expense 7,200FICA ? Social security taxes payable 446.40FICA ? Medicare taxes payable 104.40Employee federal income taxes payable 135.00Accrued payroll payable 6,514.205. On January 8, the end of the first weekly pay period of the year, Royal Company?s payroll register showed that its employees earned $11,380 of office salaries and $32,920 of sales salaries. What are the entries to record the gross salaries only?a. Debit to Salary Expense ? Office $11,380Debit to Salary Expense ? Sales $32,920b. Debit to Cash ? Office Salaries $11,380Debit to Cash ? Sales Salaries $32,920c. Credit to Cash ? Office Salaries $11,380Debit to Cash ? Sales Salaries $32,920d. Debit to Cash ? Office Salaries $11,380Credit to Cash ? Sales Salaries $32,9206. A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is: a. Debit Warranty Expense $7,400, credit Estimated Warranty Liability $7,400.b. Debit Estimated Warranty Liability $7,400, credit Warranty Expense $7,400.c. Debit Estimated Warranty Liability $7,400, credit Cash $7,400.d. No entry is recorded until the items are returned for warranty repairs.7. All of the following statements regarding uncertainty in liabilities are true except: a. A company can create a known amount when issuing a note even though the holder of the note may not be known until the maturity date.b. A company can have an obligation of a known amount to a known creditor but not know when it must be paid.c. A company only records liabilities when it knows whom to pay, when to pay, and how much to pay.d. A company can be aware of an obligation but not know how much will be required to settle it.8. Anita Kroll and Aaron Rogers organize a partnership on January 1. Kroll?s initial investment consists of cash ($14,000), equipment ($66,000), and a note payable reflecting a bank loan for the new business ($20,000). Roger?s initial investment is cash of $25,000. These amounts are the values agreed on by both parties. Prepare journal entries to record Kroll?s investment.a. Date General Journal Debit CreditJan. 1 Cash 14,000A. Kroll, Capital 14,000b. Date General Journal Debit CreditCash 14,000Other 46,000A. Kroll, Capital 60,000c. Date General Journal Debit CreditJan. 1 Cash 14,000Equipment less note payable 46,000A. Kroll, Capital 60,000d. Date General Journal Debit CreditJan. 1 Cash 14,000Equipment 66,000Note payable 20,000A. Kroll, Capital 60,0009. Partners? withdrawals of assets are:a. Credited to their equity accounts.b. Debited to their equity accounts.c. Credited to their retained earnings.d. Debited to their retained earnings.10. A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include: a. A debit to Cash for $140,000b. A debit to Paid-in Capital in Excess of Par Value, Common Stock for $42,000c. A credit to Common Stock for $182,000d. A credit to Common Stock for $140,00011. Shamrock Company had net income of $32,830. The weighted-average common shares outstanding were 9,800. The company declared a $4,500 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share are: a. $3.81b. $2.89c. $3.35 d. $3.5612. A corporation declared and issued a 10% stock dividend on November 1. The following information was available immediately prior to the dividend:Retained earnings $830,000 Shares issued and outstanding 68,000 Market value per share $23 Par value per share $5 The amount that equity will decrease as a result of recording this stock dividend is: (3 choices)a. $156,400. b. $0. c. $34,000.13. The following data were reported by a corporationThe number of outstanding shares is:Authorized shares 36,000 Issued shares 31,000 Treasury shares 11,500a. 24,500. b. 36,000. c. 31,000. d. 19,500. 14. The carrying value of bonds at maturity is always equal to the:a. Amount of cash originally received in exchange for the bonds.b. Par or face value that the issuer pays the holder.c. Amount of discount or premium.d. Amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium.15. Heathrow issues $2,000,000 of 6%, 15-year bonds dated January 1, 2011, that pays interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,728,224. Prepare the January 1, 2011, entry to record the bonds? issuance (3 choices)a. Date General Journal Debit CreditJan. 1 Cash 1,728,224 Discount on Bond Payable 271,776 Bond Payable 2,000,000 b. Date General Journal Debit CreditJan. 1 Cash 1,728,224 Bond Payable 1,728,224 c. Date General Journal Debit CreditJan. 1 Discount on Bond Payable 271,776 Interest Expense120,000 Bonds Payable 2,000,000 Interest Payable 120,00016. A company?s motivation for financial investments is all but:a. Gaining income on from the investmentb. Hiding cashc. Gaining growth on excess cashd. Taking a strategic position in another company17. Held-to-Maturity Debt (HTM) is:a. Financial instruments measured at fair value through profit and lossb. Financial debt measured at amortized costc. Financial debt measured at fair value through OCI d. Equity measured by the equity method18. Influential investors own __________% of the company?s ________stocka. Under 20%/ Common stockb. 20-50%/ Common stockc. +51%/ Common stockd. +51%/ Preferred stock19. The statement of cash flows report:a. Assets, liabilities, and equityb. Revenues, gains, expenses, and lossesc. Cash inflows and cash outflows for an accounting period.d. Equity, net income, and dividends.20. Use this information and the indirect method to find cash provided or used by operations:Net income $ 13,400 Depreciation expense 13,100 Gain on sale of land 8,600 Increase in merchandise inventory 3,150 Increase in accounts payable 7,250 Proceeds from sale of land 8,550 Payment on mortgage payable 16,100a. $14,450 b. $39,200c. $22,000d. $30,600Extra Credit for One Point- Ethics Question: Led Zep Auditing Firm has two branches ? one in NYC and the other in LA. Both service each others clients and the clients of their clients. A junior partner in the LA office learns in confidence from client ZZ-Todd that a client of the NYC office, Eddie Mercury Inc., is taking bribes from the police. LA office is responsible to:a. Tell the police.b. Tell the NYC office.c. Keep the confidence of the client.d. Keep the confidence of the NYC client.Extra Credit for One Point-Available-for-Sale Accounting: December 31, 2011, Manhattan Co. held the following short-term available-for-sale securities.Cost Fair ValueNintendo Co. common stock $ 68,900 $ 75,300 Atlantic bonds payable 24,500 22,800 Kellogg Co. notes payable 50,000 47,200 McDonald's Corp. common stock 91,400 86,600 ________________________________________Manhattan had no short-term investments prior to the current period. Prepare the December 31, 2011, year-end adjusting entry to record the fair value adjustment for these securities.Date General Journal Debit CreditDec. 31

 

Paper#42645 | Written in 18-Jul-2015

Price : $25
SiteLock