Acc/305 acc 305 acc305 week 5 final exam tutorial

Acc/305 acc 305 acc305 week 5 final exam tutorial

1) At the beginning of September 2011, ABC Co. reported Merchandise Inventory of $4,000. During the month, the company made purchases of $11,700. On September 30, 2011, a physical count of inventory reported $4,800 on hand. Cost of goods sold for the month is 

2) Sampson Co.’s accounting records show the following at the year ending on December 31, 2011: 
    
Purchase Discounts    $  8,400
Freight-in    11,700
Purchases    300,015
Beginning Inventory    35,250
Ending Inventory    43,200
Purchase Returns    9,600
    

Using the periodic system, the cost of goods purchased is 

3) Under a periodic inventory system, acquisition of merchandise is debited to the 

4) Shandy Shutters has the following inventory information: 
    
Nov. 1    Inventory 15 units @ $6.00
8    Purchase 60 units @ $6.45
17    Purchase 30 units @ $6.30
25    Purchase 45 units @ $6.60
    

A physical count of merchandise inventory on November 30 reveals that there are 50 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is 

5) Lee Industries had the following inventory transactions occur during 2011: 
            Units    Cost/Unit
2/1/11    Purchase    54    $45
3/14/11    Purchase    93    $47
5/1/11    Purchase    66    $49
    

The company sold 153 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s gross profit using LIFO (rounded to whole dollars)? 

6) Kershaw Bookstore had 600 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows: 
    Date    Purchases    Sales
Jan. 14        450 @ $28
17    300 @ $20    
25    300 @ $22    
29        300 @ $32
    

Kershaw does not maintain perpetual inventory records. According to a physical count, 450 units were on hand at January 31. 

The cost of the inventory at January 31, under the FIFO method is: 

7) If beginning inventory is understated by $10,000, the effect of this error in the current period is the following: 

Cost of Goods Sold | Net Income 

8) A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000. The amounts reflected in the current end of the period balance sheet are the following: 

Assets | Stockholders’ Equity 

9) Widner Co. understated its inventory by $10,000 at December 31, 2010. It did not correct the error in 2010 or 2011. As a result, Widner’s stockholders’ equity was 

10) An aging of a company’s accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a 

11) An aging of a company’s accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $2,000 debit balance, the adjustment to record bad debts for the period will require a 

12) Wright sells softball equipment. On November 14, they shipped $1,000 worth of softball uniforms to a middle school, terms 2/10, n/30. On November 21, they received an order from a high school for $600 worth of custom printed bats to be produced in December. On November 30, Paola Middle School returned $100 of defective merchandise. Wright has received no payments from either school as of month end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30? 

13) Mehring Co. reported net sales of $270,000, net income of $54,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company’s asset turnover ratio? 

14) During 2011, Rathke Corp. reported net sales of $2,500,000, net income of $1,200,000, and depreciation expense of $100,000. Rathke also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and accumulated depreciation of $500,000. Rathke’s asset turnover ratio is 

    
15) Yanik Co.’s delivery truck, which originally cost $56,000, was destroyed by fire. At the time of the fire, the balance of the Accumulated Depreciation account amounted to $38,000. The company received $32,000 reimbursement from its insurance company. The gain or loss because of the fire was 

16) A truck was purchased for $120,000 and it was estimated to have a $24,000 salvage value at the end of its useful life. Monthly depreciation expense of $2,000 was recorded using the straight-line method. The annual depreciation rate is 

17) A plant asset cost $192,000 and is estimated to have a $24,000 salvage value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be 

18) Equipment was purchased for $90,000. Freight charges amounted to $4,200 and there was a cost of $12,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $18,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be 

19) The entry to record the payment of an interest-bearing note at maturity after all interest expense has been recognized is the following: 

20) On October 1, a carpet service borrows $400,000 from First National Bank on a 3-month, $400,000, 8% note. The entry by Steve’s Carpet Service to record payment of the note and accrued interest on January 1 is the following: 

21) Admire County Bank agrees to lend Givens Brick Co. $300,000 on January 1. Givens Brick Co. signs a $300,000, 8%, 9-month note. What is the adjusting entry required if Givens Brick Company prepares financial statements on June 30? 

22) Mendez Corp. issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2011, at $103.00. The journal entry to record the issuance will show a 

23) Silcon Co. issued $500,000 of 6%, 10-year bonds on one of its interest dates for $431,850 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. Interest is paid annually. The journal entry on the first interest payment date, to record the payment of interest and amortization of discount will include a 

24) Silcon Co. issued $500,000 of 6%, 10-year bonds on one of its interest dates for $431,850 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. Interest is paid annually. What amount of discount (to the nearest dollar) should be amortized for the first interest period? 

25) Which of the following terms are NOT considered a disadvantage of the corporate form of organization? 

26) A corporate board of directors does NOT generally 

27) A typical organization chart showing delegation of authority would show 

28) Municiple, Inc. has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2011. If the board of directors declares a $200,000 dividend, the 

29) Anders, Inc. has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011? 

30) Outstanding stock of the Abel Corp. included 20,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par noncumulative preferred stock. In 2010, Abel declared and paid dividends of $4,000. In 2011, Abel declared and paid dividends of $12,000. How much of the 2011 ACC305 dividend was distributed to preferred shareholders? 

31) Looper, Inc. has 25,000 shares of 6%, $100 par value, noncumulative preferred stock and 50,000 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 $250,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011? 

32) Venco Corp.’s December 31, 2010 balancesheet showed the following 
    
8% preferred stock, $20 par value, cumulative, 10,000 shares authorized; 7,500 shares issued    $   150,000
Common stock, $10 par value, 1,000,000 shares authorized; 975,000 shares issued, 960,000 shares outstanding    9,750,000
Paid-in capital in excess of par value—preferred stock    30,000
Paid-in capital in excess of par value—common stock    13,500,000
Retained earnings    3,750,000
Treasury stock (15,000 shares)    315,000
    

Venco declared and paid a $38,000 cash dividend on December 15, 2010. If the company’s dividends in arrears prior to that date were $9,000, Triad’s common stockholders received 

33) Cole Corp. issues 10,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to 

34) Ephram Co. has 3,000 shares of 5%, $100 par noncumulative preferred stock outstanding at December 31, 2011. No dividends have been paid on this stock for 2010 or 2011. Dividends in arrears at December 31, 2011 total 

35) Rebel, Inc. issued 3,000 shares of no-par common stock with a stated value of $3 per share. The market price of the stock on the date of issuance was $12 per share. The entry to record this transaction includes a 

36) Slaton Co. originally issued 3,000 shares of $10 par value common stock for $90,000 ($30 per share). Slaton subsequently purchases 300 shares of treasury stock for $27 per share and resells the 300 shares of treasury stock for $29 per share. In the entry to record the sale of the treasury stock, there will be a 

37) Wilton Co. reported net income of $50,000 for the year. During the year, accounts receivable decreased by $7,000, accounts payable increased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is 

38) If a loss of $20,000 is incurred in selling (for cash) office equipment having a book value of $80,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is 

39) Bent Co. reports a $20,000 increase in inventory and a $5,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $170,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

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