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Acc111 final exam

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Question;1 of 50;Suppose King Manufacturing;signs a $600,000 note payable to purchase land. King also pays $40,000 in back;property taxes, $10,000 in transfer taxes, $25,000 to remove an old building;and a $3,000 survey fee. In addition, King had a ground breaking ceremony to;start construction of a new building that costs $1,200. What is the cost of the;land?;$678,000;$679,200;$650,000;$600,000;Question;2 of 50;is the ongoing process of evaluating the internal control;Risk assessment;Monitoring;Control activities;Control environment;Question;3 of 50;Case 10.2;Whirlpool sells $2,120,000 of products in January 2009 on credit. It;is estimated that 3% of the products will be returned for warranty work. At the;end of January, $30,300 of warranty work has been done.;A);Warranty Expense;30,300;Estimated Warranty Payable;30,300;B);Estimated Warranty Payable;63,600;Cash;63,600;C);Warranty Expense;63,600;Estimated Warranty Payable;63,600;D);Estimated Warranty Payable;30,300;Cash;30,300;Refer to Case 10.2. The journal entry for the warranty work would;be;A);B);C);D);Question;4 of 50;Which inventory method uses the average cost for the period for;ending inventory and cost of goods sold?;FIFO;Specific Identification;LIFO;Weighted average;Question;5 of 50;In a company with good internal controls, which department should be;responsible for preparing employee earnings records?;Payroll;Accounting;Human resources;Finance;Question;6 of 50;If it is probable a company will lose a lawsuit and the amount of;loss can be estimated, the company should report the contingency by;ignoring it and disclose nothing related to the lawsuit.;describing the situation in the footnotes to the financial;statements.;recording an expense;and liability based on estimated amounts.;recording a loss on the balance sheet.;Question;7 of 50;Case 7.10;Jade Co Killian Co;Cash;$10,000 $25,000;Short-term investments;5,000 15,000;Net Receivables;45,000 55,000;Current liabilities;$45,000 $100,000;Refer to Case 7.10. Calculate the Quick ratio for Jade Company.;1.5;1.25;1.0;1.33;Question;8 of 50;Case 9.2;Axel Logistics purchased the;following long term assets with market values;Asset;Market Value;Equipment;$200,000;Land;$250,000;Furniture;$150,000;Building;$400,000;Refer to Case 9.2. If Axel pays $800,000 for all of the long term;assets in a basket purchase, what amount would be the recorded as the cost of;the land?;$180,000;$200,000;$250,000;$100,000;Question;9 of 50;Notes receivable that are for;longer than one year are considered;revenues.;current assets.;long term assets.;expenses.;Question;10 of 50;Under the allowance method of;accounting for bad debts, the journal entry for writing off a customers;accounts is;A);Allowance for doubtful;accounts;XXXX;Bad Debts Expense;XXXX;B);Bad Debts Expense;XXXX;Allowance for doubtful;accounts;XXXX;C);Allowance for doubtful;accounts;XXXX;Cash;XXXX;D);Accounts Receivable;XXXX;Allowance for doubtful accounts;XXXX;A);B);C);D);Question;11 of 50;Case 9.2;Axel Logistics purchased the;following long term assets with market values;Asset;Market Value;Equipment;$200,000;Land;$250,000;Furniture;$150,000;Building;$400,000;Refer to Case 9.2. If Axel pays $800,000 for all of the long term;assets in a basket purchase, what amount would be the recorded as the cost of;the building?;$400,000;$320,000;$600,000;$530,000;Question;12 of 50;Net realizable value of;accounts receivable refers to the;estimated amount of bad debts.;amount of cash deposited in a bank.;amount customers owe.;amount expected to be;collected from customers.;Question;13 of 50;Which of the following are;purposes of internal control?;One of the purposes of internal control is to encourage employees to;follow company policy.;One of the purposes of internal control is to safeguard the;company's assets.;One of the purposes of;internal control is to ensure accurate, reliable accounting records.;All of the statements;above are true.;Question;14 of 50;Which inventory costing;method would use the actual cost of each individual unit or product?;FIFO;LIFO;Weighted average;Specific;Identification;Question;15 of 50;Of the following assets which;one would be listed first on the balance sheet?;Prepaid Expenses;Land;Cash;Accounts Receivable;Question;16 of 50;Take home pay is the same as;net pay.;taxable pay.;average pay.;gross pay.;Question;17 of 50;Case 10.4;Lisa Lay manages the women's clothing department of Fashion;Department Store. She earns a base monthly salary of $1,000 plus a 6%;commission on her personal sales. Through payroll deductions, Lay donates $35;per month to a charitable organization, and she authorizes Fashion to deduct;$40 monthly for her health insurance. Tax rates on Lay's earnings are 10% for;income tax and 8% of the first $90,000 for FICA. During the first 11 months of;the year, she earned $81,000.;Refer to Case 10.4. Compute Lay's net pay for December assuming;$80,000 in sales for December.;$4,681;$1,000;$4,500;$3,615;Question;18 of 50;The allocation of the cost of;a natural resource to expense over its useful life is called;amortization.;depletion.;depreciation.;production.;Question;19 of 50;Case 9.7;Suppose General Electric;Company (GE) pays $400,000 to acquire a patent on January 1, 2008. GE believes;this patent's useful life is five years.;Refer to Case 9.7. What is the journal on January 1 to acquire the patent?;A);Amortization Expense;400,000;Patent;400,000;B);Amortization Expense;80,000;Accumulated Amortization;80,000;C);Patent;80,000;Cash;80,000;D);Patent;400,000;Cash;400,000;A);B);C);D);Question;20 of 50;Case 9.3;Leah, Inc. has machinery with a cost of $100,000. The machinery has;an estimated useful life of 10 years, and an estimated salvage value of;$10,000. The machinery is expected to be able to produce a total of 1,000,000;units during its estimated life.;Refer to Case 9.3 The amount of deprecation expense in the first;year under double declining balance depreciation would be;$20,000.;$15,000.;$10,000.;$18,000.;Question;21 of 50;Maggie Moo's Ice Cream Shop;had a gross pay of $19,000 and a net pay of $13,200 for the latest payroll. The;journal entry to pay the payroll would be;A);Salaries Expense;13,200;Cash;13,200;B);Salaries Payable;19,000;Cash;19,000;C);Salaries Expense;13,200;Salaries Payable;13,200;D);Salaries Payable;13,200;Cash;13,200;A);B);C);D);Question;22 of 50;Case 6.1;Horner Consulting has the following related to its cash account;Cash account balance;$3,100;Bank statement balance;$3,200;Deposits in transit;$250;Outstanding Checks;#1001;$50;#1003;$340;#1006;$225;Bank Service charge;$25;NSF check - Customer Gilkey;$240;Refer to Case 6.1. What is the journal entry for the NSF check?;A);Miscellaneous Expense;240;Cash;240;B);Cash;240;Accounts Receivable - Gilkey;240;C);Accounts Receivable - Gilkey;240;Cash;240;D);Cash;240;Miscellaneous Expense;240;A);B);C);D);Question;23 of 50;Case 9.5;TD Industries has a piece of;equipment that has a cost of $200,000. The equipment has accumulated;depreciation of $75,000.;Refer to Case 9.5. If the equipment is sold for $120,000, TD will;debit a loss for $15,000.;debit accumulated;depreciation for $75,000.;credit cash for $120,000.;credit a gain for $5,000.;Question;24 of 50;A signature card is used by banks to help protect against;inappropriate deposits.;check forgery.;petty cash being stolen.;errors in a bank reconciliation.;Question;25 of 50;Case 9.6;TD Industries has a piece of equipment that has a cost of $400,000.;The equipment has accumulated depreciation of $305,000.;Refer to Case 9.6. If the equipment is sold for $95,000, TD will;credit a loss for $5,000.;credit equipment for;$400,000.;debit a gain for $5,000.;credit cash for $95,000.;Question;26 of 50;Which of the following would be considered a capital expenditure?;Putting a new heating;a cooling system on a building;Cleaning the carpet on a weekly basis;Regular maintenance of a building;Painting the restrooms of a building;Question;27 of 50;Case 10.3;Lisa Lay manages the women's clothing department of Fashion;Department Store. She earns a base monthly salary of $1,000 plus a 5%;commission on her personal sales. Through payroll deductions, Lay donates $35;per month to a charitable organization, and she authorizes Fashion to deduct;$40 monthly for her health insurance. Tax rates on Lay's earnings are 10% for;income tax and 8% of the first $90,000 for FICA. During the first 11 months of;the year, she earned $87,000.;Refer to Case 10.3. Compute Lay's gross pay for December assuming;$70,000 in sales for December.;$70,000;$4,500;$1,000;$1,700;Question;28 of 50;Lanny Company's cash account;shows an ending balance of $770. The bank statement shows a $20 service charge;and an NSF check for $100. A $250 deposit is in transit, and outstanding checks;total $400. What is Navarro's adjusted cash balance?;$1,050;$650;$680;$530;Question;29 of 50;The source document behind a notes receivable is called a(n);account.;promissory note.;journal entry.;subsidiary ledger.;Question;30 of 50;Inventory shrinkage decreases inventory and;expenses.;net income.;liabilities.;dividends.;Question;31 of 50;The allocation of the cost of;a plant asset to expense over its useful life is called;production.;depreciation.;amortization.;depletion.;Question;32 of 50;Case 8.2;Emerson Electronics had the;following information related to its September inventory.;Number of Units Cost;Sept. 1;Beginning Inventory 200 Units $10 6;Purchase 200 Units $12 16;Sold 250 Units 27;Purchase 200 Units $14 30;Sold 300 Units;Sales were made at $15 per unit and Emerson uses the perpetual;inventory system.;Refer to Case 8.2. The value;of cost of goods sold under FIFO would be;$6,500.;$7,000.;$6,300.;$6,700.;Question;33 of 50;The percentage of sales;method of estimating bad debts is considered to be a(n);retained earnings statement approach.;balance sheet approach.;cash flows statement approach.;income statement;approach.;Question;34 of 50;For good internal controls over;payroll, which functions should be separated?;Passing out paychecks or pay;stubs;Hiring and firing of employees;Payroll accounting;All of the functions;above should be separated;Question;35 of 50;ABC company signed a 1 year;term note payable on September 1, 2008. The note had an interest rate of 9%.;The journal entry at 12-31-08 would include a;credit to cash for $900.;credit to account payable for $300.;credit to interest;payable for $300.;credit to notes payable for $900.;Question;36 of 50;Reducing expense to increase;operating profit is representative of;safeguarding assets;following company policies;promoting operational;efficiency;ensuring accurate, reliable accounting records;Question;37 of 50;Accounts receivable are reported;on the balance sheet at;estimated value.;net realizable value.;market value.;historical cost.;Question;38 of 50;Which of the following is considered to be a plant asset?;Land improvements;Land;Machinery;All of the above;Question;39 of 50;Case 7.7;Patriot Bank loans P+P;Company $200,000 on a 1 year promissory note on January 1, 2009. The interest;rate of this loan is 8.5%. The principle and interest are due on 12-31-2009.;Refer to Case 7.7. The journal entry to record the receipt of;interest and repayment of the loan on 12-31-09 is;A);Cash;200,000;Notes receivable;Interest revenue;183,000;17,000;B);Cash;217,000;Notes receivable;Interest revenue;200,000;17,000;C);Notes receivable;200,000;Cash;Interest Revenue;200,000;17,000;D);Notes payable;200,000;Cash;200,000;A);B);C);D);Question;40 of 50;Case 8.1;Emerson Electronics had the following information related to its;September inventory.;Number of Units Cost;Sept. 1;Beginning Inventory 100 Units $10 5;Purchase;200 Units $11 15;Sold;150 Units;26;Purchase;100 Units $12 30;Sold 200 Units;Sales were made at $20 per;unit and Emerson uses the perpetual inventory system.;Refer to Case 8.1. The value;of ending inventory under LIFO would be;$700.;$500.;$600.;$550.;Question;41 of 50;Fraudulent financial;reporting schemes occur when management;records assets that do not exist.;overstates the value of equipment, buildings, and other long-term;assets.;records revenues prematurely or fictitiously.;acts in any of the;above ways.;Question;42 of 50;Bank service charges would be;subtracted from the bank balance of a bank reconciliation.;subtracted from the;book balance of a bank reconciliation.;added to the book balance of a bank reconciliation.;added to the bank balaadded to the bank balance of a bank;reconciliation.nce of a bank reconciliation.;Question;43 of 50;Case 10.5;Chip King works as a cook for Damon's Grill. His straight-time pay;is $10 per hour, with time and a half for hours in excess of 40 per week.;King's payroll deductions include withheld income tax of 7% of total earnings;FICA tax of 8% of total earnings, and a weekly deduction of $10 for a;charitable contribution to United Fund.;Refer Case 10.5. Assuming King worked 50 hours during the week;compute his gross pay for the week.;$600;$550;$400;$500;Question;44 of 50;In accounting, how is goodwill defined?;The excess of the cost to purchase another company over the market;value of its net liabilities;The excess of the cost to purchase another company over the book;value of its net assets;The excess of the;cost to purchase another company over the market value of its net assets;The excess of the cost to purchase another company over the market;value of its cash accounts;Question;45 of 50;Case 9.4;J + J construction has trucks;with a cost of $300,000. The trucks have an estimated useful life of 5 years;and an estimated salvage value of $20,000. The trucks are estimated to run;200,000 miles during their estimated life.;Refer to Case 9.4. The amount of deprecation expense in the second;year under double declining balance depreciation would be;$75,200.;$66,000.;$65,000.;$72,000.;Question;46 of 50;Case 8.1;Emerson Electronics had the;following information related to its September inventory.;Number of Units Cost;Sept. 1;Beginning Inventory 100;Units $10 5;Purchase 200;Units $11 15;Sold 150 Units;26;Purchase 100;Units $12 30;Sold 200 Units;Sales were made at $20 per unit and Emerson uses the perpetual;inventory system.;Refer to Case 8.1. The average cost per unit after the September 5;purchase would be;$11.00.;$10.00.;$10.67.;$9.75.;Question;47 of 50;Ordinary repairs are recorded by;debiting an expense;account.;crediting an asset account.;crediting an expense account.;debiting an asset account.;Question;48 of 50;Gilkey, Inc. uses the allowance method to account for uncollectible;receivables. At the beginning of the year, Allowance for Doubtful Accounts had;a credit balance of $1,100. During the year you recorded Bad Debt Expense of;$2,000 and wrote off bad receivables of $2,100. What is your year-end balance;in Allowance for Doubtful Accounts?;$2,000;$3,100;$1,000;$3,200;Question;49 of 50;Case 8.2;Emerson Electronics had the;following information related to its September inventory.;Number of Units Cost;Sept. 1;Beginning Inventory 200;Units $10 6;Purchase 200;Units $12 16;Sold 250 Units 27;Purchase 200;Units $14 30;Sold 300 Units;Sales were made at $15 per unit and Emerson uses the perpetual;inventory system.;Refer to Case 8.2. The average cost per unit after the September 27;purchase would be;$11.;$12.50.;$13.31.;$12.71.;Question;50 of 50;Which of the following is the;correct journal entry for sales of merchandise of $1,000 in cash? The sales tax;rate is 6%.;A);Cash;1,000;Sales revenue;1,000;B);Cash;1,060;Sales Revenue;Sales tax payable;1, 000;60;C);Cash;1,000;Sales Revenue;Sales tax payable;940;60;D);A/R;1,000;Sales Revenue;1,000;A);B);C);D)

 

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