ACC291 Final Exam Update

ACC291 Final Exam Update

1. 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

2. 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?

3. Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer. They paid S400 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

4. 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?

5. As a recent graduate of State University you're aware that IFRS requires component depredation for plant assets. A friend has asked you to succinctly explain what component depreciation means. Which of the following correctly describes component depreciation?

6. 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. Bonds with a face value of $300,000 and a quoted price of 97¼ have a selling price of

8. 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?

9. 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

10. 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

11. 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

12. 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?

13. 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?

14. Each of the following items may be classified as operating or financing activities under IFRS except

15. The current assets of Orangatte Company are $227,500. The current liabilities are $130,000. The current ratio expressed as a proportion is

16. All of the following requirements about internal controls were enacted under the Sarbanes Oxley Act of 2002 except:

17. Which of the following is not an internal control activity for cash?

18. Before a check authorization is issued, the following documents must be in agreement, except for the

            receiving report.

            invoice.

            purchase order.

            Remittance advice.

19. 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

20.

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?

21. 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

22.

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

23.

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 employer’s payroll taxes would include a

24.

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

25.

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?

26.

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

            Total Assets     Total Liabilities           Total Stockholders' Equity

27.

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?

28.

A company has an average inventory on hand of $75,000 and its average days in inventory is 36.5 days. What is the cost of goods sold?

29.

The following information is available for Patterson Company:

            2014   2013  

Accounts receivable    $   360,000      $   340,000

Inventory         280,000           320,000

Net credit sales           3,000,000        2,600,000

Cost of goods sold       1,500,000        840,000

Net income     300,000           170,000

The accounts receivable turnover for 2014 is

30.

All of the following situations below might indicate a company has a low quality of earnings except

            A lack of disclosure about guaranteed payments that were mentioned in the MD&A of the annual report.

            Maintenance costs are capitalized and then depreciated.

31.

IFRS