ACC 291 Final Exam

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ACC 291 Week 5 Final Exam

Multiple Choice Question 86
An aging of a company's accounts receivable indicates that $4,500 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
debit to Bad Debt Expense for $4,500.
debit to Bad Debt Expense for $3,300.
credit to Allowance for Doubtful Accounts for $4,500.
debit to Allowance for Doubtful Accounts for $3,300.
Multiple Choice Question 182
The financial statements of the Melton Manufacturing Company reports net sales of
$300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the
year and end of year, respectively. What is the average collection period for
accounts receivable in days?
60.8
96.1
36.5
48.7
Multiple Choice Question 119
Stine Company purchased machinery with a list price of $64,000. They were given a
10% discount by the manufacturer. They paid $400 for shipping and sales tax of
$3,000. Stine estimates that the machinery will have a useful life of 10 years and a
residual value of $20,000. If Stine uses straight-line depreciation, annual
depreciation will be
$3,760.
$4,072.
$6,100.
$4,100.
Multiple Choice Question 198

Given the following account balances at year end, compute the total intangible
assets on the balance sheet of Janssen Enterprises.
Cash $1,500,000
Accounts Receivable
4,000,000
Trademarks 1,000,000
Goodwill
2,500,000
Research & Development Costs
2,000,000
$7,500,000.
$5,500,000.
$3,500,000.
$9,500,000.
Multiple Choice Question 207
On January 1, a machine with a useful life of five years and a residual value of
$40,000 was purchased for $120,000. What is the depreciation expense for year 2
under the double-declining-balance method of depreciation?
$38,400.
$48,000.
$23,040.
$28,800.
IFRS Multiple Choice Question 01
As a recent graduate of State University you're aware that IFRS requires component
depreciation for plant assets. A friend has asked you to succinctly explain what
component depreciation means. Which of the following correctly describes
component depreciation?
The method that requires that significant parts of a plant asset with different
useful lives be depreciated separately.
The method used to ensure that the depreciation rate remains constant from
year to year.
The method used to prorate annual depreciation on a time basis.
The method of depreciation recommended for an asset that is expected to be
significantly more productive in the first half of its useful life.
Multiple Choice Question 146
Bonds with a face value of $300,000 and a quoted price of 97 have a selling price
of
$292,500.
$291,075.
$291,750.
$291,006.
Multiple Choice Question 188

Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on

January 1, 2013. The bonds had a face value of $400,000, pay interest annually on
December 31st, and have a call price of 102. Sparks uses the straight-line method
of amortization. What is the carrying value of the bonds on January 1, 2015?
$400,000
$420,700
$418,400
$381,600
Multiple Choice Question 90
S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an
agreement was reached whereby E. Corp. would pay S. Lawyer a legal fee of
approximately $15,000 by issuing 8,000 shares of its common stock (par $1). The
stock trades on a daily basis and the market price of the stock on the day the debt
was settled is $1.80 per share. Given this information, the best journal entry for E.
Corp. to record for this transaction is
Legal Expense
14,400
Common Stock
8,000
Paid-in Capital in Excess of Par - Common
6,400
Legal Expense
15,000
Common Stock
15,000
Legal Expense
15,000
Common Stock
8,000
Paid-in Capital in Excess of Par - Common
7,000
Legal Expense
14,400
Common Stock
14,400
Multiple Choice Question 110
Logan Corporation issues 50,000 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
$3,000,000 and a credit or credits to
Preferred Stock for $2,500,000 and Paid-in Capital in Excess of Par Value
Preferred Stock for $500,000.
Preferred Stock for $2,500,000 and Retained Earnings for $500,000.
Paid-in Capital from Preferred Stock for $3,000,000.
Preferred Stock for $3,000,000.
IFRS Multiple Choice Question 01
Jahnke Corporation issued 8,000 shares of 2 par value ordinary shares for 11 per
share. The journal entry to record the sale will include
a credit to Share CapitalOrdinary for 88,000.
a debit to Retained Earnings for 72,000.
a debit to Cash for 16,000.

a credit to Share PremiumOrdinary for 72,000.

Multiple Choice Question 80

Zoum Corporation had the following transactions during 2014:
1.
Issued $125,000 of par value common stock for cash.
2.
Recorded and paid wages expense of $60,000.
3.
Acquired land by issuing common stock of par value $50,000.
4.
Declared and paid a cash dividend of $10,000.
5.
Sold a long-term investment (cost $3,000) for cash of $3,000.
6.
Recorded cash sales of $400,000.
7.
Bought inventory for cash of $160,000.
8.
Acquired an investment in Zynga stock for cash of $21,000.
9.
Converted bonds payable to common stock in the amount of $500,000.
10.
Repaid a 6 year note payable in the amount of $220,000.
What is the net cash provided by financing activities?
$395,000.
$<605,000>.
$<105,000>.
$115,000.
Multiple Choice Question 176
Colie Company had an increase in inventory of $120,000. The cost of goods sold
was $490,000. There was a $30,000 decrease in accounts payable from the prior
period. Using the direct method of reporting cash flows from operating activities,
what were Colie's cash payments to suppliers?
$580,000.
$370,000.
$310,000.
$640,000.
IFRS Multiple Choice Question 04
Each of the following items may be classified as operating or financing activities
under IFRS except
dividends paid.
dividends received.
interest paid.
all of these answer choices may be classified as such.
Multiple Choice Question 165
The current assets of Orangatte Company are $227,500. The current liabilities are
$130,000. The current ratio expressed as a proportion is
1.75:1.
175%.

$210,000 $120,000.
.57:1.

Multiple Choice Question 41

All of the following requirements about internal controls were enacted under the
Sarbanes Oxley Act of 2002 except:
independent outside auditors must eliminate redundant internal control.
companies must continually assess the functionality of internal controls.
independent outside auditors must attest to the level of internal control.
companies must develop sound internal controls over financial reporting.
Multiple Choice Question 85
Which of the following is not an internal control activity for cash?
The number of persons who have access to cash should be limited.
The functions of record keeping and maintaining custody of cash should be
combined.
Surprise audits of cash on hand should be made occasionally.
All cash receipts should be recorded promptly.
Multiple Choice Question 92
Before a check authorization is issued, the following documents must be in
agreement, except for the
purchase order.
invoice.
remittance advice.
receiving report.
Multiple Choice Question 115
Mitchell Corporation bought equipment on January 1, 2014 .The equipment cost
$180,000 and had an expected salvage value of $30,000. The life of the equipment
was estimated to be 6 years. The book value of the equipment at the beginning of
the third year would be
$50,000.
$180,000.
$150,000.
$130,000.
Multiple Choice Question 142
Brevard Corporation purchased a taxicab on January 1, 2013 for $25,500 to use for
its shuttle business. The cab is expected to have a five-year useful life and no
salvage value. During 2014, it retouched the cab's paint at a cost of $1,200,
replaced the transmission for $3,000 (which extended its life by an additional 2

years), and tuned-up the motor for $150. If Brevard Corporation uses straight-line
depreciation, what annual depreciation will Brevard report for 2014?
$4,100.
$5,100.
$4,125.
$3,900.
Multiple Choice Question 164
On July 1, 2014, Fleming Company sells machinery for $120,000. The machinery
originally cost $300,000, had an estimated 5-year life and an expected salvage
value of $50,000. The Accumulated Depreciation account had a balance of
$175,000 on January 1, 2014, using the straight-line method. The gain or loss on
disposal is
$20,000 gain.
$5,000 loss.
$10,000 loss.
$5,000 gain.
Multiple Choice Question 180
On July 1, 2014, Linden Company purchased the copyright to Norman Computer
Tutorials for $140,000. It is estimated that the copyright will have a useful life of 5
years. The amount of Amortization Expense recognized for the year 2014 would be
$14,000.
$25,900.
$28,000.
$13,125.
Multiple Choice Question 120
The following totals for the month of April were taken from the payroll records of
Metz Company.
Salaries
$30,000
FICA taxes withheld
2,295
Income taxes withheld
6,600
Medical insurance deductions 1,200
Federal unemployment taxes
240
State unemployment taxes
1,500
The entry to record accrual of employers payroll taxes would include a
credit to FICA Taxes Payable for $1,740.
credit to Payroll Tax Expense for $1,740.
debit to Payroll Tax Expense for $4,035.
credit to Payroll Tax Expense for $4,035.
Multiple Choice Question 242

Thayer Company purchased a building on January 2 by signing a long-term

$2,520,000 mortgage with monthly payments of $23,100. The mortgage carries an
interest rate of 10 percent. The amount owed on the mortgage after the first
payment will be
$2,499,000.
$2,496,900.
$2,520,000.
$2,517,900.
Multiple Choice Question 96
The following data is available for BOX Corporation at December 31, 2014:
Common stock, par $10 (authorized 30,000 shares)
$250,000
Treasury stock (at cost $15 per share) $1,200
Based on the data, how many shares of common stock are outstanding?
30,000.
24,920.
25,000.
29,920.
Multiple Choice Question 144
Indicate the respective effects of the declaration of a cash dividend on the following
balance sheet sections:
Total Assets Total Liabilities
Total Stockholders' Equity
Decrease
Increase
Decrease
Increase
Decrease
No change
Decrease
No change
Increase
No change Increase
Decrease
Multiple Choice Question 102
Assume the following cost of goods sold data for a company:
2015 $1,300,000
2014 1,200,000
2013 1,000,000
If 2013 is the base year, what is the percentage increase in cost of goods sold from
2013 to 2015?
30%
70%
130%
20%
Multiple Choice Question 221

All of the following situtations below might indicate a company has a low quality of
earnings except
Maintenance costs are capitalized and then depreciated.
Revenue is recognized when earned.
A lack of disclosure about guaranteed payments that were mentioned in the
MD&A of the annual report.
Adoption of a different inventory method for each of the last three years.
IFRS Multiple Choice Question 05
IFRS
implies that receivables with different characteristics should be reported as
one unsegregated amount.
implies that receivables with different characteristics should be reported
separately.
requires that receivables with different characteristics should be reported as
one unsegregated amount.
requires that receivables with different characteristics should be reported
separately.

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