Int Acct. Final

"10. In 2016, ABC Co. reports $825,000 of beginning inventory, ending inventory of $1,500,000, and cost of goods sold of $250,000. What is ABC's 2016 inventory purchases? a. $925,000 b. $350,000 c. $1,075,000 d. $575,000 e. None of the above"

A

"11. Hyacinth Corporation's trial balance for December 31, the end of its fiscal year, included the following accounts: Accounts Receivable - $35,000 Inventories - 70,000 Patents - 20,000 Investments - 45,000 Prepaid Insurance - 8,000 Note receivable, due in 18 months - 57,000 Cash in Bank - 5,500 Investments are treasury bills that were purchased on November 30 and mature on May 31. Prepaid insurance is a one-year policy that was purchased on December 31. The amount that should be classified as current assets in the December 31 balance sheet is ________. A. $163,500 B. $118,500 C. $175,500 D. $138,500"

A

"14) Which of the following reasons provide the best theoretical support for accelerated depreciation? A. Assets are more efficient in early years and initially generate more revenue. B. Expenses should be allocated in a manner that "smooths" earnings. C. Repairs and maintenance costs will probably increase in later periods, so depreciation should decline. D. Accelerated depreciation provides easier replacement because of the time value of money."

A

"14. A yacht dealer sells high performance yachts to affluent customers. The sale also includes a 90-day warranty against any defects in workmanship. The number of performance obligations for each yacht is ________. A. 1 B. 2 C. 3 D. 4"

A

"15. An automotive manufacturer, A-2 Auto, provides maintenance services to Mako. In exchange, A-2 Auto received 600 shares of Mako's no-par common stock. Mako's common stock is currently trading on the open market for $29 per share. The standalone value of the maintenance provided was $20,200. What is the transaction price of this contract? A. $17,400 B. $20,200 C. $19,200 D. Cannot be determined from the information given."

A

"16. Coconut Company determined that its allowance for uncollectible accounts at December 31, 2016, based on an aging of the receivables, should be $94,000. Additional information is as follows: Allowance for uncollectible accounts, 1/1/2016 - $80,000 Uncollectible accounts written off during 2016 - 23,000 Uncollectible accounts recovered during 2016 - 6,000 Accounts receivable at 12/31/ 2016 - 850,000 For 2016, what would be Coconut's bad debt expense? A. $31,000 B. $94,000 C. $14,000 D. $23,000"

A

"17. ABC Company is holding goods with a selling price of $110,000 which cost them $70,000. On December 3, 2019, ABC sold the goods to Timmons under a bill-and-hold arrangement. At the end of 2019 ABC still holds the goods. Assume ABC meets the four conditions necessary under a bill-and-hold arrangement to claim it has transferred control to the buyer. How much revenue should ABC recognize for 2019? A. $110,000 B. $70,000 C. $40,000 D. $0"

A

"17. At 12/31, ABC has the following information: Beginning Inventory - 600,000 Purchases - 925,000 Sales - 450,000 Gross Profit % - 35% What is ABC's estimated cost of goods sold using the gross profit method? a. $292,500 b. $157,500 c. $533,750 d. $210,000"

A

"2) An example of a judgment in accounting for Accounts Receivable is ________. A) the percentage of credit sales that may be uncollectible B) the amount a customer paid during the previous month C) the decision whether to extend credit to a new customer D) the percentage that may be deducted to calculate a sales discount"

A

"22. XYZ Co. sold the machine on 4/1/16 for $3,400,000. Assuming XYZ uses straight-line depreciation, what amount of gain (loss) should XYZ record on the date of the sale? a. $25,000 b. ($50,000) c. $275,000 d. $775,000 e. $50,000"

A

"23. At December 31, the Telig Company has ending inventory with a historical cost of $630,000. Assume the company uses the first-in, first out (FIFO) perpetual inventory system. The current replacement cost of the inventory is $608,000. The net realizable value is $650,000. The normal profit on this inventory is $50,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used? A. Debit Cost of Goods Sold for $20,000 and credit Inventory for $20,000. B. Debit Inventory for $20,000 and credit Cost of Goods Sold for $20,000. C. Debit Cost of Goods Sold for $22,000 and credit Inventory for $22,000. D. Debit Inventory for $22,000 and credit Cost of Goods Sold for $22,000."

A

"25. Excalibur Company uses the perpetual inventory method. Excalibur Company has the following data available for the month of January: Date - Transaction - Units - Unit Cost Jan. 1 - Beginning inventory - 200 - $1.00 Jan. 9 - Purchase - 300 - $1.10 Jan. 10 - Sale - 400 Jan. 15 - Purchase - 400 - $1.16 Jan. 18 - Sale - 300 - Jan. 24 - Purchase - 100 - $1.26 What is the Cost of Goods Sold for the month of January using LIFO? A. $778 B. $810 C. $762 D. $766"

A

"25. JCR Corp. purchases Gordon Inc. for $1,150,000 cash on 4/15/16. The book value of Gordon's net assets (as reflected on its 12/31/15 balance sheet) is $800,000. JCR Corp. hires an accounting firm, KPMG, to determine the fair value of Gordon's assets at the time of the sale. KPMG determines that that fair value of Gordon's tangible assets exceeded their book value by $75,000, and the fair value of Gordon's intangible assets exceeded their fair value by $50,000. How much goodwill should JCR Corp. recognize when recording the purchase of Gordon Inc.? a. $225,000 b. $350,000 c. $475,000 d. $925,000"

A

"26) What is the normal journal entry for recording bad debt expense? A) debit Bad Debt Expense, credit Allowance for Uncollectible Accounts B) debit Allowance for Uncollectible Accounts, credit Bad Debt Expense C) debit Bad Debt Expense, credit Accounts Receivable D) debit Accounts Receivable, credit Bad Debt Expense"

A

"26. Which, if any, intangible assets are subject to amortization? a. Only finite-life intangible assets are subject to amortization. b. Only indefinite-life intangible assets are subject to amortization. c. Both finite and indefinite-life intangible assets are subject to amortization. d. No intangible assets are subject to amortization."

A

"30. During its first year of operation, Dovery Company incurred $355,000 of research costs undertaken with the prospect of gaining new technical understanding about a new nanotechnology procedure. An additional $495,000 was incurred to develop a production process to use that new technology to produce a new lubricant product. Under U.S. GAAP, which of the following is the appropriate accounting for these costs? A. expense $850,000 B. expense $355,000 and capitalize $495,000 as an intangible asset C. expense $495,000 and capitalize $355,000 as an intangible asset D. capitalize $850,000 as an intangible asset"

A

"31. Jonathan and Steve exchange vehicles. Jonathan's vehicle has a fair value of $8,000, historical cost of $20,000 and accumulated depreciation of $7,000. Steve's truck had a fair value of $6,500, so he paid Jonathan $1,500 in cash. Steve's truck has a book value of $15,000. Assuming the transaction has commercial substance, what is the gain (loss) that Jonathan should record for this exchange? a. ($5,000) b. $5,000 c. ($12,000) d. $12,000) e. $1,500"

A

"32. Rinky-Dink Inc. incurred research and development costs of $210,000 and legal fees of $110,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should the company record as patent amortization expense in the first year? A. $11,000 B. $16,000 C. $21,000 D. $32,000"

A

"33. Rinky-Dink Inc. incurred research and development costs of $210,000 and legal fees of $110,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should the company record as patent amortization expense in the first year? A. $11,000 B. $16,000 C. $21,000 D. $32,000"

A

"34. A firm trades in an old truck with a fair value of $26,000 and a carrying value of $21,000 for new truck that has a list price of $33,000. To complete the transaction, the firm gives the dealer $4,000 cash. At what value will the firm record the new truck assuming the transaction does not have commercial substance? A. $25,000 B. $33,000 C. $30,000 D. $26,000"

A

"35. A firm trades in an old truck with a fair value of $26,000 and a carrying value of $21,000 for new truck that has a list price of $33,000. To complete the transaction, the firm gives the dealer $4,000 cash. Assuming the transaction does not have commercial substance, at what value will the firm record the new truck? A. $25,000 B. $33,000 C. $30,000 D. $26,000"

A

"35. On December 31, 2012, the Board of Directors of Fox Manufacturing, Inc. committed to a plan to discontinue the operations of its Owl division. Owl's 2012 operating loss was $1,400,000, and the fair value of its facilities exceeded its carrying value by $500K. During 2013, the year that Owl was actually sold, Owl generated an operating loss of $350K, and it was sold at a $150K loss. Fox's tax rate is 20%. In its 2013 Income Statement, what amount should Fox report as loss from discontinued operations? a. $400,000 b. $500,000 c. $280,000 d. $120,000"

A

"37) When a firm sells or abandons an asset, how is the gain or loss to be recognized on the income statement measured? A) The difference between cash proceeds received and the carrying value of the asset. B) The difference between cash proceeds received and the acquisition value of the asset. C) The difference between cash proceeds received and the accumulated depreciation of the asset. D) The difference between the book value of the asset and the carrying value of the asset."

A

"37. On July 1, Fox Co. sold machinery to Owl Co. under an installment sales contract at a predetermined interest rate requiring five equal annual payments with the first payment due on the date of sale. What present value concept is appropriate for this situation? a. Present value of an annuity due of $1 for five periods. b. Present value of an ordinary annuity of $1 for five periods. c. Future amount of an annuity due of $1 for five periods. d. Future amount of $1 for five periods."

A

"38) Which of the following costs should be capitalized in the year incurred? A) costs to successfully defend a patent B) research and development costs for a new product to be introduced later this year C) cost to internally generate goodwill D) organizational costs"

A

"38. What is the purpose of reporting comprehensive income? a. To summarize all changes in equity from non-owner sources, b. To reconcile the difference between net income and cash flows provided from operating activities. c. To provide a consolidation of the income of the firm's segments. d. To provide information for each segment of the business."

A

"40) Rinky-Dink Inc. incurred research and development costs of $200,000 and legal fees of $100,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should the company record as patent amortization expense in the first year? A) $10,000 B) $15,000 C) $20,000 D) $30,000"

A

"41. Lorna Company has the following data available: Beginning inventory - $170,000 Net purchases - $500,000 Net sales - $900,000 Gross profit percentage - 60% The estimated cost of the ending inventory using the gross profit method is ________. A. $310,000 B. $540,000 C. $360,000 D. $670,000"

A

"43. Boeing Corporation paid $24,000 for 12 months' insurance coverage. What entry is used to 43. Boeing Corporation paid $24,000 for 12 months' insurance coverage. What entry is used to record this transaction? A. Prepaid Insurance - 24,000 Cash - 24,000 B. Insurance Revenue - 24,000 Cash - 24,000 C. Insurance Expense - 24,000 Cash - 24,000 D. Prepaid Insurance - 24,000 Insurance Expense - 24,000"

A

"8. Mission Flowers Company had the following transactions for the year ended December 31: • Sales revenues of $775,000. • Operating expenses of $550,000. • Losses due to employee strike of $200,000. This was the first employee strike in the history of the company. • Operating income of $100,000 from a subsidiary sold on November 1. The decision to dispose was made on February 28. The income was earned evenly over the ten months ended October 31. The company's effective tax rate is 35%. What amount should Mission Flowers report as income from continuing operations for the year ended December 31? A. $16,250 B. $146,250 C. $81,250 D. $33,750"

A

"ABC Co. provides the following information regarding Accounts receivable during 2016. Net credit sales during 2016 - $1,500,000 Accounts receivable at 12/31/16 - $600,000 Allowance for Doubtful Accounts (credit bal.) at 12/31/16, unadjusted - $200,000 7. Assume ABC uses the percentage (%) of accounts receivable approach to estimate bad debt, and based on historical data, they determine that 40% of accounts receivable is a sufficient estimate. What is ABC's current year Bad Debt Expense? a. $40,000 b. $240,000 c. $266,000 d. $360,000 e. None of the above"

A

"On 6/15/16, ABC Co. made a $40,000 sale on account with terms 2/10, net 30. ABC uses the gross method to record accounts receivable. 4. The customer paid ABC on 6/20/16. What is ABC's journal entry on 6/20/16? a. Debit Cash $39,200 - debit Sales Discount $800 - credit Account Receivable $40,000 b. Debit Cash $40,000 - credit Accounts Receivable $40,000 c. Debit Cash $39,200 - credit Accounts Receivable $39,200 d. Debit Cash $39,200 - credit Accounts Receivable $39,200 - credit Sales Discounts Forfeited $800 e. None of the above"

A

"Transaction Units Purchased Unit Cost Units Sold Beg. Inventory - 1/1 - 2,000 - $3 - Purchase - 5/1 - 11,000 - $4 - Sale - 6/15 - - - 4,000 Purchase - 9/1 - 3,000 - $5 - Sale - 11/1 - - - 5,000 Purchase - 12/15 - 2,000 - $6 - 12. Assuming ABC Co. uses a FIFO perpetual inventory costing system, what is 2016 Cost of Goods Sold? a. $34,000 b. $32,000 c. $14,000 d. $20,000 e. None of the above"

A

"XYZ Co., a manufacturer of widgets, purchased machinery on 1/1/15 for $3,500,000. XYZ also paid $200,000 for its title and an additional $50,000 to ship the machine to its facility in Philadelphia. The machine's expected useful life is estimated to be 10 years, and have a residual value of $750,000. During its 10 years, the machine is expected to produce 28,000 widgets as follows: • Year 1 - 1,000 • Years 2-10 - 3,000 widgets per year 19. Assuming XYZ uses double-declining-balance depreciation, what is the 2016 depreciation expense? a. $600,000 b. $750,000 c. $300,000 d. $560,000 e. $480,000"

A

"Yeager Inc. and Tibbits Co. have an exchange with no commercial substance. The asset given up by Yeager Inc. has a book value of $31,000 and a fair value of $40,000. The asset given up by Tibbits Co. has a book value of $46,000 and a fair value of $54,000. Yeager also pays Tibbits $14,000 cash. (Round anycomputations to three decimals). 44) What is Yeager's recognized gain or loss on the exchange? A) $0 B) $9,000 gain C) $9,000 loss D) $2,034 gain"

A

"1) Poseidon Corp is aware that a large portion of receivables may become uncollectible because the customer is in talks for bankruptcy. By choosing not to disclose this information, the information provided in the statements ________. A) is not verifiable B) does not faithfully represent the firm's financial position C) both A & B D) neither A nor B"

B

"10. Walton Company collected $14,400 in May of 2016 for 4 months of service which would take place evenly from October of 2016 through January of 2017. The revenue reported from this transaction during 2016 would be: A. $0. B. $10,800. C. $14,400. D. $3,600."

B

"12 What is the fundamental principle underlying the timing of revenue recognition? A. With regard to timing, the fundamental principle of revenue recognition is that a company should recognize revenue when an order is paid for in full by a customer. B. With regard to timing, the fundamental principle of revenue recognition is that a company should recognize revenue when it transfers control of an asset to the customer. C. With regard to timing, the fundamental principle of revenue recognition is that a company should recognize revenue when an order is generated by a customer. D. With regard to timing, the fundamental principle of revenue recognition is that a company should only recognize revenue when it transfers control of an asset to the customer and the order is paid for in full."

B

"13) Caramel Company has the following transactions in the current year. Assuming that all of the transactions are material, which of them will most likely will effect on current year net income? A. The payment for the settlement of a lawsuit that had been accrued in the previous year. B. The determination that intangibles acquired through the purchases of a small start-up company were worthless. C. Receiving a building contributed by a shareholder. D. The write-off of an account receivable."

B

"15. Which inventory cost flow method yields the higher retained earnings during periods of rising prices? a. LIFO b. FIFO c. Moving-average d. Perpetual"

B

"18. At December 31, the Sherlock Company has ending inventory with a historical cost of $150,000. Assume the company uses LIFO and a perpetual inventory system. The current replacement cost of the inventory is $110,000. The net realizable value is $140,000. The normal profit on this inventory is $40,000. Following U.S. GAAP, what is the loss to adjust inventory to its lower of cost or market? a. $10,000 b. $40,000 c. $50,000 d. No adjustment is needed"

B

"18. Under the allowance method, the recovery of an account previously written-off ________. A. has no effect on the allowance for uncollectible accounts B. has no effect on total assets C. increases net income D. increases net realizable value of receivables"

B

"19) On May 1, Jonson Industries decided to discontinue its prepackaged business segment. At the end of the year, the company is still holding the business segment for disposal, which is expected early in the following year. On its year-end income statement, Jonson Industries will report as income from discontinued operations the profits generated by the prepackaged business segment ________. A) for the entire year, before taxes B) for the entire year, net of taxes C) since May 1, before taxes D) since May 1, net of taxes"

B

"2. Under U.S. GAAP, bank overdraft should generally be reported as ________. a. an increase in operating expenses b. an increase in current liabilities c. a decrease in other current assets d. a decrease in the balance of Cash and Cash Equivalents e. none of the above"

B

"20) Which financial is the first to be prepared? A) balance sheet B) statement of income C) statement of shareholders' equity D) statement of comprehensive income"

B

"20. When the market interest rate on a short-term note receivable is greater than the stated rate, ________. A. the present value of the note is greater than its stated value B. the present value of the note is less than its face value C. the stated value of the note is greater than its face value D. the stated value of the note is less than its face value"

B

"22. On June 1, Atkinson Company purchased $7,000 of inventory on account from Donnie Company. Donnie Company offers a 5% discount if payment is received within 15 days. Atkinson Company records the purchase using the gross method and the perpetual inventory system. Atkinson Company makes the payment for the inventory on June 10. The journal entry on June 10 by Atkinson Company includes ________. A. a debit to Cash for $7,000 B. a credit to Cash for $6,650 C. a debit to Inventory for $350 D. a credit to Interest Expense for $350"

B

"23) What is the balance sheet classification of a bank account whose fund balance is restricted for retirement of bonds that mature in six years? A) current asset B) non-current asset C) current liability D) non-current liability"

B

"23. Vaclav Company has the following data available: Transaction - Units Purchased - Unit Cost - Units Sold Beginning Inventory - 850 - 30 - Oct. 1 Purchase - 325 - 32 - Oct. 10 Sale - - - 425 Oct. 14 Purchase - 450 - 36 - Oct. 20 Sale - - - 600 Oct. 22 Purchase - 400 - 37 - Oct. 29 Sale - - - 525 If Vaclav Company uses a perpetual moving-average inventory system, the cost of ending inventory on October 31 is ________. (Round average cost per unit to four decimal places and all other numbers to two decimal places.) A. $34,357.48 B. $16,319.81 C. $50,580.19 D. $66,900.00"

B

"25) Eurobake Inc. made a $10,000 sale on account with terms: of 1/15, n/30. If the company uses the net method, which of the following will be included in the journal entry to record the sale on account? A) debit Accounts Receivable $10,000 B) debit Accounts Receivable $9,900 C) debit Sales Discount Forfeited $100 D) credit Sales Discount Forfeited $100"

B

"25. Which of the following statements about the double-declining-balance (DDB) method is true? A. Companies that use the DDB method do not use partial-year depreciation. B. Companies that use the DDB method generally do not use scrap value to calculate current-year depreciation expense, except in the last year of an asset's life. C. Using the DDB method, the amount of depreciation expense varies from year to year depending on usage of the asset. D. All of the above statements are true."

B

"26. Basking Company adopted the dollar-value LIFO method in 2018. At December 31, 2018, ending inventory was $104,000, with a price index of 1.00, using dollar-value LIFO. At December 31, 2019, the ending inventory using FIFO is $122,000 and the price index is 1.18. Round all dollar amounts to the nearest dollar. Basking Company's ending inventory at December 31, 2019 on a dollar-value LIFO basis is ________. A. $104,000 B. $103,390 C. $103,280 D. $122,000"

B

"26. Kaven Corporation purchased a truck at the beginning of 2018 for $80,000 and paid shipping costs of $5,000. Kaven will depreciate the truck using the units-of-output method. The truck is estimated to have a residual value of $3,400 and a useful life of 4 years and 120,000 miles. It was driven 18,000 miles in 2018 and 32,000 miles in 2019. What is the depreciation expense for 2019? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) A. $21,250 B. $21,760 C. $22,720 D. $32,000"

B

"27. Savage Company adopted the dollar-value LIFO method in 2014. At December 31, 2014, ending inventory was $102,000, with a price index of 1.00, using dollar-value LIFO. At December 31, 2015, the ending inventory using FIFO is $131,000 and the price index is 1.20. What is the LIFO Reserve on December 31, 2015? (Round all dollar amounts to the nearest dollar.) A. $7,167 B. $20,400 C. $21,833 D. $29,000"

B

"28. Kaven Corporation purchased a truck at the beginning of 2018 for $85,000 which will be depreciated using the units-of-output method. The truck is estimated to have a residual value of $4,000 and a useful life of 4 years and 120,000 miles. It was driven 18,000 miles in 2018 and 32,000 miles in 2019. What is the depreciation expense for 2019? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) A. $21,250 B. $21,760 C. $22,720 D. $32,000"

B

"28. Which of the following is true of goodwill? A. It is an indefinite-life tangible asset. B. It is not subject to amortization. C. It is a definite-life intangible asset. D. It is subject to amortization."

B

"29. Gabraile Company acquired Itsy Inc. for a price that was substantially less than the fair value of the identifiable net assets acquired. The difference between the fair value of the net identifiable assets and the bargain purchase price is ________. A) recorded as negative goodwill B) reported as a gain that increases income from continuing operations C) allocated to reduce carrying value for each purchased asset D) reported as a gain that increases other comprehensive income"

B

"29. Regular Corp. has four divisions. One of them, Odd Products, was acquired on 1/1/16 for $1,000,000, and recorded goodwill of $250,000 as a result of the purchase. At 12/31/17, Odd Products had a fair value (including goodwill) of $650,000 and the book value of the company's net assets (without goodwill) was $700,000. The fair value of Odd Products net assets (without goodwill) at 12/31/17 was $450,000. What amount of loss on impairment of goodwill should Regular Corp. record in 2017? a. Goodwill is not impaired b. $50,000 c. $200,000 d. $250,000 e. None of the above"

B

"31. Rommer Company purchases Daley Inc. for $970,000 cash on January 1, 2018. The book value of Daley Company's net assets, as reflected on its December 31, 2017 statement of financial position is $730,000. An analysis by Rommer on December 31, 2017 indicates that the fair value of Daley's tangible assets exceeded the book value by $90,000, and the fair value of identifiable intangible assets exceeded book value by $35,000. How much goodwill should be recognized by Rommer Company when recording the purchase of Daley Inc.? A. $90,000 B. $115,000 C. $150,000 D. $240,000"

B

"33) Seeder Inc. made a lump-sum purchase of three pieces of machinery for $135,000 from an unaffiliated company. The appraised value of the machines are: Machine A $70,000 Machine B $42,000 Machine C $28,000 What cost should be assigned to Machines A, B, and C, respectively? A) A: $70,000 - B: $42,000 - C: $28,000 B) A: $67,500 - B: $40,500 - C: $27,000 C) A: $65,000 - B: $39,000 - C: $26,000 D) A: $45,000 - B: $45,000 - C: $45,000"

B

"33. As commonly used, the term "working capital" of a business represents a. Retained earnings b. Current assets minus current liabilities c. Total paid-in (contributed) capital d. Total assets minus liabilities"

B

"34. A firm trades in an old truck with a fair value of $26,000 and a carrying value of $21,000 for new truck that has a list price of $33,000. To complete the transaction, the firm gives the dealer $4,000 cash. Assuming the transaction has commercial substance, at what value will the firm record the new truck? A. $33,000 B. $30,000 C. $26,000 D. $25,000"

B

"39) Rommer Company purchases Daley Inc. for $960,000 cash on January 1, 2017. The book value of Daley Company's net assets, as reflected on its December 31, 2016 statement of financial position is $740,000. An analysis by Rommer on December 31, 2016 indicates that the fair value of Daley's tangible assets exceeded the book value by $70,000, and the fair value of identifiable intangible assets exceeded book value by $35,000. How much goodwill should be recognized by Rommer Company when recording the purchase of Daley Inc.? A) $70,000 B) $115,000 C) $150,000 D) $220,000"

B

"39. On December 31, 2018, Plattsville Plastics decided to dispose of an extrusion machine. The original cost was $490,000 and accumulated depreciation was $315,000. On December 31, 2018, the fair value of the machine was determined to be $130,000. Which of the following would be included in a related adjusting entry on December 31, 2018. A. debit Loss on Machine Held for Disposal for $175,000 B. debit Loss on Machine Held for Disposal for $45,000 C. credit Loss on Machine Held for Disposal for $175,000 D. credit Loss on Machine Held for Disposal for $45,000"

B

"4) Hendrickson Corporation's trial balance for July 31, the end of its fiscal year, included the following accounts: Accounts Receivable - $25,000 Inventories - 60,000 Copyright - 20,000 Investments - 45,000 Prepaid Insurance - $9,000 Note receivable, due in two years - 75,000 Cash in Bank - 5,500 Investments are treasury bills that were purchased in May and mature on August 15. Prepaid insurance is a three-year policy that was purchased on July 31. the amount that should be classified as current assets in the July 31 balance sheet is ________. A) $144,500 B) $138,500 C) $93,500 D) $213,500"

B

"4. An example of a judgment in accounting for Accounts Receivable is ________. A. the percentage that may be deducted to calculate a sales discount B. the percentage of receivables outstanding 60 or more days that will not be collected C. the decision whether to extend credit to a new customer D. the amount a customer paid during the previous month"

B

"40. Basking Company adopted the dollar-value LIFO method in 2018. At December 31, 2018, ending inventory was $104,000, with a price index of 1.00, using dollar-value LIFO. At December 31, 2019, the ending inventory using FIFO is $122,000 and the price index is 1.18. Round all dollar amounts to the nearest dollar. Basking Company's ending inventory at December 31, 2019 on a dollar-value LIFO basis is ________. A. $104,000 B. $103,390 C. $103,280 D. $122,000"

B

"42) Devo Co. has an indefinite-life intangible asset with a carrying value of $782,000. The undiscounted cash flows expected to be realized from that asset total $827,000. the discounted cash flows are $574,000. and the fair value of the asset has been determined to be $646,000. What is the amount of the impairment loss to be recorded, if any? A) $208,000 B) $136,000 C) $35,000 D) -0-"

B

"43) Regular Corp. has four divisions. One of them, Weeble Products, was acquired on January 1, 2016, for $60,000,000, and recorded goodwill of $6,000,000 as a result of that purchase. At December 31, 2017, Weeble Products had a fair value (including goodwill) of $37,000,000. and the book value of the company's net assets (without goodwill) was $44,000,000. The fair value of Weeble's net assets (without goodwill) at December 31, 2017 was $33,000,000. What amount of loss on impairment of goodwill should Regular record in 2017? A) -0- B) $2,000,000 C) $4,000,000 D) $11,000,000"

B

"44. Lockyear Corporation's trial balance for December 31, the end of its fiscal year, included the following accounts: Accounts Receivable - $35,000 Inventories - 70,000 Patents - 20,000 Investments - 45,000 Prepaid Insurance - 8,000 Note receivable, due in 6 months - 57,000 Cash in Bank - 5,500 Investments are treasury bills that were purchased in November and mature on February 28. Prepaid insurance is a two-year policy that was purchased on December 31. The amount that should be classified as current assets in the December 31 balance sheet is ________. A. $240,500 B. $216,500 C. $220,500 D. $212,500"

B

"5. Bad debt expense represents the amount of ________. a. gross sales that is written off during the current period b. current period sales that is expected to be uncollectible c. gross receivables that is expected to be uncollectible d. net receivables that is written off during the current period"

B

"6. At January 1, 2019, Bee Inc. reported Retained Earnings of $425,000. During the month, Bee generated revenues of $70,000, incurred expenses of $36,000, and purchased equipment for $12,000. The balance in Retained Earnings at December, 31, 2019 was $444,000. What is the amount of Bee's dividends in 2019? A. $3,000 B. $15,000 C. $27,000 D. $0"

B

"7. On January 1, Mountbatten Corporation paid $14,000 for a year's advance rent on a building and recorded it as Rent Expense. The rental period begins on January 1. When financial statements are prepared on March 31, the adjusting entry should include ________. (Do not round intermediary calculations. Only round your final answer to the nearest dollar.) A. a credit to Cash for $10,500 B. a credit to Rent Expense for $10,500 C. a credit to Prepaid Rent for $3,500 D. a debit to Rent Expense for $3,500"

B

"8) Kaven Corporation purchased a truck at the beginning of 2016 for $75,000 which will be depreciated using the units-of-output method. The truck is estimated to have a residual value of $3,000 and a useful life of 4 years and 120,000 miles. It was driven 18,000 miles in 2016 and 32,000 miles in 2017. What is the depreciation expense for 2017? A) $18,750 B) $19,200 C) $20,000 D) $32,000"

B

"8. The Harris Company purchased equipment for $15,000 on December 1. It is estimated that annual depreciation on the computer will be $3,000. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: A. debit Depreciation Expense, $3,000 - credit Accumulated Depreciation, $3,000. B. debit Depreciation Expense, $250 - credit Accumulated Depreciation, $250. C. debit Depreciation Expense, $12,000 - credit Accumulated Depreciation, $12,000. D. debit Equipment, $15,000 - credit Accumulated Depreciation, $15,000."

B

"9. Which of the following transactions is not reported as other comprehensive income according to U.S. GAAP? A. unrealized gains and losses from available − for − sale portfolio of debt investment securities B. unrealized gains on the upward valuation of property, plant, and equipment C. foreign currency translation gains and losses D. adjustments to unrecognized pension costs (benefits)"

B

"ABC Co. provides the following information regarding Accounts receivable during 2016. Net credit sales during 2016 - $1,500,000 Accounts receivable at 12/31/16 - $600,000 Allowance for Doubtful Accounts (credit bal.) at 12/31/16, unadjusted - $200,000 8. In November 2016, one of ABC's customers, who has a $3,500 accounts receivable balance, goes bankrupt, and therefore ABC determines it must write-off the accounts receivable. What is the journal entry that ABC must complete to write-off the accounts receivable? a. Debit Allowance for Doubtful Accounts $3,500 - credit Bad Debt Expense $3,500 b. Debit Allowance for Doubtful Accounts $3,500 - credit Accounts Receivable $3,500 c. Debit Cash $3,500 - credit Accounts Receivable $3,500 d. Debit Bad Debt Expense $3,500 - credit Accounts Receivable 3,500 e. Debit Bad Debt Expense $3,500 - credit Allowance for Doubtful Accounts $3,500"

B

"Transaction Units Purchased Unit Cost Units Sold Beg. Inventory - 1/1 - 2,000 - $3 - Purchase - 5/1 - 11,000 - $4 - Sale - 6/15 - - - 4,000 Purchase - 9/1 - 3,000 - $5 - Sale - 11/1 - - - 5,000 Purchase - 12/15 - 2,000 - $6 - 13. Assuming ABC Co. uses a LIFO perpetual inventory costing system, what is 2016 ending inventory? a. $39,000 b. $38,000 c. $33,000 d. $44,000 e. None of the above"

B

"Use the following information to answer questions 17 & 18: On 8/1/16, NFP Inc. made a $115,000 sale on account with the terms 3/10, net 30. NFP uses the net method to record accounts receivable. 18. The customer paid on 8/25/16. What is NFP's journal entry on 8/25/16? A. Debit Cash $115,000 - credit Accounts Receivable $115,000 B. Debit Cash $115,000 - credit Accounts Receivable $111,550 - credit Sales Discounts Forfeited $3,450 C. Debit Accounts Receivable $112,700 - credit Cash $112,700 D. Debit Cash $111,550, debit Sales Discount $3,450 - credit Accounts Receivable $115,000"

B

"XYZ Co., a manufacturer of widgets, purchased machinery on 1/1/15 for $3,500,000. XYZ also paid $200,000 for its title and an additional $50,000 to ship the machine to its facility in Philadelphia. The machine's expected useful life is estimated to be 10 years, and have a residual value of $750,000. During its 10 years, the machine is expected to produce 28,000 widgets as follows: • Year 1 - 1,000 • Years 2-10 - 3,000 widgets per year 21. Assuming XYZ uses units-of-output depreciation, what is accumulated depreciation for 2015 (round to the nearest dollar)? a. $133,929 b. $107,143 c. $125,000 d. $200,000"

B

"Yeager Inc. and Tibbits Co. have an exchange with no commercial substance. The asset given up by Yeager Inc. has a book value of $31,000 and a fair value of $40,000. The asset given up by Tibbits Co. has a book value of $46,000 and a fair value of $54,000. Yeager also pays Tibbits $14,000 cash. (Round anycomputations to three decimals). 45) What is Tibbits recognized gain or loss on the exchange? A) $0 B) $8,000 gain C) $2,000 gain D) $1,808 gain"

B

"28. XYZ Co. acquired machinery at a cost of $600,000, and accumulated depreciation on the machine is $250,000. The sum of the discounted cash flows from use of the machinery is $100,000. The sum of the undiscounted cash flows from use of the machinery is $200,000. The fair value of the machine is $300,000. What amount should XYZ Co. recognize as a loss on impairment? a. The asset is not impaired b. $200,000 c. $50,000 d. $150,000 e. $300,000"

C

"45. The carrying value of equipment is calculated as ________. A. acquisition cost less salvage value B. acquisition cost plus accumulated depreciation C. acquisition cost less accumulated deprecation D. acquisition cost plus depreciation expense"

C

"1. What is a cash equivalent? a. reclassification of a cash amount that is restricted from use in the current operating cycle b. negative cash balance that occurs when a company writes a check in an amount that exceeds the account balance c. short-term liquid investment with original maturity of three months or less d. minimum cash balance required to be maintained by a credit agreement e. none of the above"

C

"11) You have discovered an investment opportunity that earns a 8% rate of interest compounded annually. If you invest $3,429 today, how much will you have at the end of two years? A. $4,666 B. $8,986 C. $4,000 D. $7,704"

C

"11. Which statement is most accurate? A. A write-off of an account receivable reduces total assets. B. A write-off of an accounts receivable increases bad debt expense. C. A write-off of an accounts receivable does not change total assets. D. A write-off of an account receivable reduces the net accounts receivable."

C

"13. Walton Company collected $35,000 in June of 2019 for 5 months of services which be performed evenly over the months from October of 2019 through February of 2020. The revenue reported from this transaction during 2019 would be: A. $35,000.00 B. $14,000.00 C. $21,000.00 D. $0.00"

C

"16. Gray Uniforms is a wholesaler who sells school uniforms to retailers. On August 1, Gray contracts with Excel School Uniforms to sell 2,000 uniforms to Excel to be delivered September 1. The contract price is set at $300 each. The contract provides for a 10% volume discount if sales exceed 3,000 uniforms. The probability of sales exceeding 3,000 uniforms is expected to be 71%. Using the most-likely-amount approach, the consideration is estimated to be ________. A. $813,000 B. $639,000 C. $540,000 D. $426,000"

C

"17) Auditors should exercise ________ to minimize management bias. A) common sense B) ratio analysis C) professional skepticism D) interrogation techniques"

C

"18) Edmond Office Equipment borrowed $10,000 at 10% interest on September 1. Principal and interest are due on February 28. The company's fiscal year ends on December 31. What adjusting entry should be made on that date? A) No entry B) Debit Interest Expense - 500 - Credit Interest Payable - 500 C) Debit Interest Expense - 333 - Credit Interest Payable - 333 D) Debit Prepaid Interest - 333 - Credit Interest Payable - Credit 333"

C

"19. Prior to adjustments, Willett Company's account balances at December 31, 2018, for Accounts Receivable and the related Allowance for Uncollectible Accounts were $2,700,000 and $120,000, respectively. An aging of accounts receivable indicated that $207,000 of the December 31, 2018, receivables may be uncollectible. The net realizable value of accounts receivable at December 31, 2018, was ________. A. $2,700,000 B. $2,580,000 C. $2,493,000 D. $2,373,000"

C

"2. Which of the following types of information is not a focus of the primary objective of financial reporting? A. information that helps an investor form an opinion about a company's future cash flows B. information that helps a creditor evaluate the amount and timing of cash flows of its customers C. information that helps a manager assess the efficiency and effectiveness of operations D.information that helps a banker decide to provide a loan"

C

"20. In 2010, Mennorah Corporation acquired production machinery at a cost of $490,000, which now has a book value of $200,000. The sum of undiscounted future cash flows from use of the machinery is $180,000, and it's fair value is $120,000. What amount should Mennorah recognize as a loss on impairment? A. $370,000 B. $60,000 C. $80,000 D. 0"

C

"23. Under current accounting practice, what are the two general classes of intangible assets? a. legally restricted and unrestricted b. monetary and non-monetary c. indefinite-life and finite-life d. specifically identifiable and non-identifiable"

C

"24) What is a cash equivalent? A) reclassification of a cash amount that is restricted from use in the current operating cycle B) negative cash balance that occurs when a company writes a check in an amount that exceeds the account balance C) short-term liquid investment with original maturity of three months or less D) minimum cash balance required to be maintained by a credit agreement"

C

"24. Sikich Company has the following data available: Transaction - Units Purchased - Unit Cost - Units Sold Beginning Inventory - 650 - 30 - Oct. 1 Purchase - 325 - 32 - Oct. 10 Sale - - - 425 Oct. 14 Purchase - 450 - 36 - Oct. 20 Sale - - - 600 Oct. 22 Purchase - 400 - 37 - Oct. 29 Sale - - - 525 If Sikich Company uses a perpetual FIFO inventory system, the cost of goods sold for the month is ________. A. $57,350 B. $9,075 C. $41,250 D. $10,175"

C

"24. Visual Graphics Company sold a printing press for $74,000 on the last day of the reporting period. The printing press had a cost and net book value of $100,000 and $65,000, respectively, reflected on the balance sheet at that date. What is the journal entry made by the company to reflect this asset sale? A. Cash - 74,000 Printing Equipment - 65,000 Gain on Sale - 9,000 B. Cash - 74,000 Accumulated Depreciation - 35,000 Printing Equipment - 100,000 Gain on Sale - 9,000 C. Cash - 74,000 Printing Equipment - 65,000 Gain on Sale - 9,000 D. Accumulated Depreciation - 65,000 Printing Equipment - 35,000 Gain on Sale - 30,000"

C

"28) During the year, Liptom Company made an entry to write off a $4,000 uncollectible account. Before this entry was made, the balance in accounts receivable was $60,000 and the balance in the allowance account was $4,500. What is the net realizable value of accounts receivable after the write-off entry? A) $60,000 B) $59,500 C) $55,500 D) $51,500"

C

"3) Bay City Corporation received $21,000 for 12 months' rent in advance. What entry is used to record this transaction? A) Debit Cash - 21,000 - Credit Prepaid Rent - 21,000 B) Debit Rent Expense - 21,000 - Credit Cash - 21,000 C) Debit Cash - 21,000 - Credit Unearned Revenue - 21,000 D) Debit Unearned Revenue - 21,000 - Credit Rent Revenue - 21,000"

C

"3. Information that is reported free from error ________. A. is accurate in all respects B. does not include estimates C. contains no mistakes or omissions in the description of an event or in the process used to produce financial information D. is verifiable"

C

"30. ABC Co.'s GL had a cash balance of $2,000 as of 9/30/16. Its September bank statement shows a balance of $1,500. A comparison of ABC's ledger and the bank statement shows the following differences: • A deposit made on 9/28/16 on $400 has not yet been recorded by the bank • The bank charged $100 in fees Which of the following entries is ABC required to record? a. Debit bad debt expense $100 - credit Cash $100 b. Debit Bank Fee Expenses $400 - credit Cash $400 c. Debit Bank Fee Expenses $100 - credit Cash $100 d. Debit Cash $100 - Credit Bank Fee Revenue $100 e. No journal entry is necessary "

C

"31) Basking Company adopted the dollar-value LIFO method in 2014. At December 31, 2014, ending inventory was $100,000, with a price index of 1.00, using dollar-value LIFO. At December 31, 2015, the ending inventory using FIFO is $120,000 and the price index is 1.15. Round all dollar amounts to the nearest dollar. Basking Company's ending inventory at December 31, 2015 on a dollar-value LIFO basis is ________. A) $100,000 B) $104,348 C) $105,000 D) $120,000"

C

"32. Kow-Pow Company purchased a limited-life intangible asset for $180,000 on May 1, 2017. It has a useful life of 10 years. What total cumulative amount of amortization expense should have been recorded on the intangible asset by December 31, 2019? (Round any calculations to the nearest cent, and your final answer to the nearest dollar.) A. $0 B. $36,000 C. $48,000 D. $54,000"

C

"33. A firm trades in an old truck with a fair value of $26,000 and a carrying value of $21,000 for new truck that has a list price of $33,000. To complete the transaction, the firm gives the dealer $4,000 cash. At what value will the firm record the new truck assuming the transaction has commercial substance? A. $25,000 B. $33,000 C. $30,000 D. $26,000"

C

"34) Ballyhigh Company purchased equipment for $20,000. Sales tax on the purchase was $1,500. Other costs incurred were freight charges of $400, and installation costs of $450. What is the capitalizable cost of the equipment? A) $21,500 B) $21,850 C) $22,350 D) $22,700"

C

"35) An improvement made to a machine increased its fair value and its production capacity. The cost of the improvement should be debited to ________. A) expense B) accumulated depreciation C) equipment D) intangible assets"

C

"35. Destiny Industries reports beginning inventory of $254,000, purchases of $559,000, and ending inventory of $198,000. What is the cost of goods sold? A. $813,000 B. $503,000 C. $615,000 D. $1,011,000"

C

"36. Jamison Company sells goods to Matthews Company. When Jamison ships goods to Matthews with terms f.o.b. shipping point, ________. A. Jamison Company reports the goods in its inventory when the goods are in transit to Matthews Company B. the title passes from Jamison Company to Matthews Company when the goods are received by Matthews Company C. the title passes from Jamison Company to Matthews Company when the goods leave Jamison Company D. Matthews Company does not include the goods in its inventory while the goods are in transit"

C

"37. In 2009, Cilla Company acquired production machinery at a cost of $470,000, which now has accumulated depreciation of $280,000. The sum of undiscounted future cash flows from use of the machinery is $120,000 and its fair value is $164,000. What amount should Cilla recognize as a loss on impairment? A. $70,000 B. $96,000 C. $26,000 D. $0"

C

"38. The Exclusive Company uses the perpetual inventory system. The Exclusive Company has the following data available for the month of January: Date - Transaction - Units - Unit Cost Jan. 1 - Beginning inventory - 400 - $1.00 Jan. 9 - Purchase - 300 - $1.10 Jan. 10 - Sale - 400 Jan. 15 - Purchase - 400 - $1.16 Jan. 18 - Sale - 300 Jan. 24 - Purchase - 400 - $1.26 What is the cost of ending inventory on January 31 using LIFO? A. $846 B. $968 C. $920 D. $730"

C

"39. Sampe Company has the following data available: Transaction - Units Purchased - Unit Cost - Units Sold Beginning Inventory - 400 - $10 March 1 Purchase - 200 - $13 April 25 Sale - - - 350 June 10 Purchase - 300 - $14 July 20 Sale - 250 October 30 Purchase - 350 - $18 December 15 Sale - 400 If Sampe Company uses a perpetual FIFO inventory system, the cost of goods sold for the year is ________. A. $13,950 B. $12,350 C. $12,600 D. $10,000"

C

"39. Walker Consulting helped McCall Roofers put various cost saving techniques into place. The contract specifies that Walker will receive a flat fee of $60,000 and an additional $10,000 if McCall attains a target amount of cost savings. Walker estimates a 70% chance that McCall will reach the target for cost savings. Assuming that Walker uses the expected−value approach, what is the transaction price for this product? a. $60,000 b. $70,000 c. $67,000 d. $63,000"

C

"4. On January 1, 2017, M. Johanson Company purchased equipment for $54,000. The company is depreciating the equipment at the rate of $750 per month. The book value of the equipment at December 31, 2017 is: A. $0. B. $9,000. C. $45,000. D. $54,000."

C

"40. Fox Associates, a consultant firm, keeps their accounting records on a cash basis. During 20x4, Fox collected $500,000 in fees from clients. At December 31, 20x3, Fox had accounts receivable of $80,000. At December 31, 20x4, Fox had accounts receivable of $120,000, and unearned fees of $10,000. On an accrual basis, what was Fox's service revenue for 20x4? a. $450,000 b. $460,000 c. $530,000 d. $550,000"

C

"40. On December 31, 2017, Plattsville Plastics recently decided to dispose of an extrusion machine. The original cost was $461,000 and accumulated depreciation was $310,566. On December 31, 2017, the fair value of the machine was determined to be $111,000. On December 31, 2018, the fair value of the machine as determined to be $167,000. Which of the following would be included in a related adjusting entry on December 31, 2018? A. credit Gain on Machine Held for Disposal for $167,000 B. credit Gain on Machine Held for Disposal for $56,000 C. credit Gain on Machine Held for Disposal for $39,434 D. No adjusting entry is required."

C

"5. A company purchased office supplies costing $5,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be: A. debit Supplies Expense, $5,900 - credit Supplies, $5,900. B. debit Supplies, $900 - credit Supplies Expense, $900. C. debit Supplies Expense, $4,100 - credit Supplies, $4,100. D. debit Supplies, $4,100 - credit Supplies Expense, $4,100."

C

"6) Sampe Company has the following data available: Transaction - Units Purchased - Unit Cost - Units Sold Beginning Inventory - 400 - $10 - March 1 Purchase - 200 - $12 - April 25 Sale - - - 350 June 10 Purchase - 300 - $14 July 20 Sale - - - 250 October 30 Purchase - 350 - $15 - December 15 Sale - - - 400 If Sampe Company uses a perpetual FIFO inventory system, the cost of goods sold for the year is ________. A) $5,400 B) $16,850 C) $12,100 D) $4,200"

C

"7) At December 31, the Selig Company has ending inventory with a historical cost of $630,000. Assume the company uses the LIFO perpetual inventory system. The current replacement cost of the inventory is $608,000. The net realizable value is $650,000. The normal profit on this inventory is $50,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used? A) Debit Cost of Goods Sold for $20,000 and credit Inventory for $20,000. B) Debit Inventory for $20,000 and credit Cost of Goods Sold for $20,000. C) Debit Cost of Goods Sold for $22,000 and credit Inventory for $22,000. D) Debit Inventory for $22,000 and credit Cost of Goods Sold for $22,000."

C

"7. A company purchased office supplies costing $8,000 and debited Supplies for the full amount. At the end of the accounting perio, a physical count of office supplies revealed $1,600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be: A. debit Supplies Expense, $1,600 - credit Supplies, $1,600. B. debit Supplies, $1,600 - credit Supplies Expense, $1,600. C. debit Supplies Expense, $6,400 - credit Supplies, $6,400. D. debit Supplies Expense, $8,000 - credit Supplies, $8,000."

C

"9) In 2010, Mennora Corporation acquired production machinery at a cost of $410,000, which now has a book value of $190,000. The undiscounted cash flows from use of the machinery is $175,000. and it's fair value is $135,000. What amount should Menorrah recognize as a loss on impairment? A) $15,000 B) $40,000 C) $55,000 D) -0-"

C

"9. On January 1, 2016, Leardon Inc. purchased equipment for $25,000. The company is depreciating the equipment at the rate of $1,000 per month. At January 31, 2017, the balance in Accumulated Depreciation is: A. $1,000 debit. B. $12,000 credit. C. $13,000 credit. D. $62,000 debit."

C

"Jones Corporation enters into a contract with Warner Video to add their programs to Jones' network. Warner will pay Jones an upfront fixed fee of $250,000 for 12 months of access, and will also pay a $100,000 bonus if Jones' users access Warner Video for at least 10,000 hours during the 12-month period. Jones estimates that it has a 80% chance of earning the $100,000 bonus. 21) Refer to Jones Corporation. Using the expected-value approach the transaction price would be ________. A) $200,000 B) $250,000 C) $330,000 D) $350,000"

C

"On 6/15/16, ABC Co. made a $40,000 sale on account with terms 2/10, net 30. ABC uses the gross method to record accounts receivable. 3. What is the 6/15/16 journal entry to record the account receivable? a. Debit Accounts Receivable $40,000 - credit Cash $40,000 b. Debit Cash $39,200 - credit Accounts Receivable $39,200 c. Debit Accounts Receivable $40,000 - credit Sales $40,000 d. Debit Accounts Receivable $39,200 - credit Sales $39,200 e. None of the above"

C

"The following data include all the elements from Ash Millinery income statement: Administrative Expense - $160 Cost of Goods Sold - 340 Gain on Sale of Securities - 45 Income Tax Expense - 57 Loss on Discontinued Operations after Tax - 38 Loss on Disposal of Equipment - 86 Revenue - 1,000 Selling Expense - 210 10) What is the amount of income from continuing operations for Ash Millinery? A. $147 B. $154 C. $192 D. $278"

C

"Transaction Units Purchased Unit Cost Units Sold Beg. Inventory - 1/1 - 2,000 - $3 - Purchase - 5/1 - 11,000 - $4 - Sale - 6/15 - - - 4,000 Purchase - 9/1 - 3,000 - $5 - Sale - 11/1 - - - 5,000 Purchase - 12/15 - 2,000 - $6 - 14. Assuming ABC Co. uses a LIFO periodic inventory costing system, what is 2016 cost of goods sold? a. $39,000 b. $34,000 c. $43,000 d. $46,000 e. None of the above"

C

"Use the following information to answer questions 14 & 15: Jones Corporation enters into a contract with Warner Video to add their programs to Jones' network. Warner will pay Jones an upfront fixed fee of $250,000 for 12 months of access, and will also pay a $100,000 bonus if Jones' users access Warner Video for at least 10,000 hours during the 12-month period. Jones estimates that it has a 80% chance of earning the $100,000 bonus. 14. Refer to Jones Corporation. Using the expected-value approach the transaction price would be ________. A. $200,000 B. $250,000 C. $330,000 D. $350,000"

C

"37. Smith-Miller Enterprises has inventory of $667,000 in its stores as of December 31. It also has two shipments in-transit that left the suppliers' warehouses (Smith-Miller is the customer) by December 28. Both shipments are expected to arrive on January 5. The first shipment of $128,000 was sold f.o.b. destination and the second shipment of $80,000 was sold f.o.b. shipping point. What amount of inventory should Smith-Miller report on its balance sheet as of December 31? A. $667,000 B. $875,000 C. $795,000 D. $747,000"

D

"38. In 2011, Zee Tee Inc. acquired production machinery at a cost of $630,000, which now has a accumulated depreciation of $380,000. The sum of undiscounted future cash flows from use of the machinery is $260,000. and its fair value is $195,000. What amount should Zee Tee recognize as a loss on impairment? A. $325,000 B. $55,000 C. $30,000 D. -0-"

D

"1. If a company is facing bankruptcy, which underlying assumption would not be valid? A. Periodicity assumption B. Economic entity concept C. Monetary unit assumption D. Going concern concept"

D

"1. Which of the following terms describe probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events? A. income B. equity C. performance D. asset"

D

"10. Which of the following best describes the concept of liquidity? A. It indicates an entity's ability to respond to unexpected needs B. It indicates a firm's ability to take advantage of opportunities by taking actions that alter the amounts and timing of cash flows. C. It is a measure of a firm's long − term ability to pay its obligations as they mature. D. It indicates how quickly a firm can convert the assets into cash and pay liabilities, with minimal risk of loss."

D

"11. ABC Company has inventory of $975,000 in its stores at December 31. It also has two shipments in-transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $100,000 was sold f.o.b. destination and the second shipment of $125,000 was sold f.o.b. shipping point. What amount of inventory should Ziti Company report on its balance sheet at December 31? a. 975,000 b. $1,075,000 c. $1,200,000 d. $1,100,000"

D

"12) Fir Corp. sells Coconut Company software to be used in conjunction with the Palm's production system. Fir also installs the software. The software is usable without Fir installing the product. The software and the installation are an example of ________. A. a single performance obligation B. three performance obligations C. no performance obligations D. two performance obligations"

D

"12. On January 1, 2018, Leardon Inc. purchased equipment for $25,000. The company is depreciating the equipment at the rate of $1,000 per month. On May 1, 2019, the company sold the equipment for $18,000. What is the gain or loss on the sale? A. $7,000 loss. B. $5,000 gain. C. $13,000 gain. D. $9,000 gain."

D

"13. Fir Corp. sells Coconut Company software to be used in conjunction with the Palm's production system. Fir also installs the software. The software is usable without Fir installing the product. The software and the installation are an example of ________. A. a single performance obligation B. three performance obligations C. no performance obligations D. two performance obligations"

D

"15) JCR. Co. sells a truck for $45,000. The truck had an acquisition cost of $140,000 and accumulated depreciation at the time of the sale of $85,000. Which of the following statements are true? A. JCR will report a $10,000 gain as a result of this sale. B. JCR's loss on this sale is $45,000. C. Total assets increased by $10,000 as a result of this transaction. D. Equity decreased by $10,000 as a result of this transaction."

D

"16) Which of the following terms describe probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events? A) performance B) income C) equity D) asset"

D

"16. ABC Co. uses FIFO-based inventory internally, but reports externally using Dollar-Value LIFO. The company reported the following information: Year - Ending Inventory at Year-End Prices (FIFO) - CPI 2015 - $300,000 - 1 2016 - $320,000 - 1.05 2017 - $330,000 - 1.35 2018 - $370,000 - 1.45 What is ABC's 2016 ending inventory using dollar-value LIFO? a. $320,000 b. $300,000 c. $304,762 d. $305,000 e. $324,762"

D

"19. In 2017, Yumster Company determined that a production machine used in its operations was impaired and an impairment loss of $110,000 was recognized. In 2017, the fair value of the asset increased by $170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2017? A. U.S. GAAP permits the recognition of this impairment reversal as income from continuing operations. B. U.S. GAAP permits the recognition of this impairment reversal as other comprehensive income. C. U.S. GAAP allows the recognition of this impairment reversal as either income from continuing operations or as other comprehensive income, depending upon management's intent. D. U.S. GAAP does not permit recognition of gains on reversal of previous impairment loss write-downs."

D

"2. At September 1, 2017, Baxter Inc. reported Retained Earnings of $423,000. During the month, Baxter generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $6,000. What is the balance in Retained Earnings at September 30, 2017? A. $423,000 debit B. $24,000 credit C. $426,000 credit D. $441,000 credit"

D

"21. Beck Company has inventory of $743,000 in its stores as of December 31. It also has two shipments in-transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $217,000 was sold f.o.b. destination and the second shipment of $110,000 was sold f.o.b. shipping point. Beck Company also has consigned goods of $73,000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December 31? A. $743,000 B. $1,070,000 C. $1,143,000 D. $926,000"

D

"21. In 2009, Cilla Company acquired production machinery at a cost of $414,000, which now has accumulated depreciation of $250,000. The sum of undiscounted future cash flows from use of the machinery is $199,000 and its fair value is $148,000. What amount should Cilla recognize as a loss on impairment? A. $35,000 B. $51,000 C. $16,000 D. 0"

D

"22. Regular Corp. has four divisions. One of them, Zolo Products, was acquired on January 1, 2016, for $400,000,000, and recorded goodwill of $50,000,000 as a result of that purchase. At December 31, 2016, Zolo Products had a fair value (including goodwill) of $379,000,000. The carrying value of the company's net assets at December 31, 2016 was $356,000,000 (including goodwill). What amount of loss on impairment of goodwill should Regular record in 2016? A. $21,000,000 B. $44,000,000 C. $23,000,000 D. 0"

D

"24. Goodwill is recorded as an intangible asset when ________. a. the fair value of a company's assets exceed carrying value of those assets b. the fair value of a company's assets are greater than the cost of acquiring that company c. a company's exceptional quality, reputation, or capability enables it to generate exceptional earnings d. one company acquires another company"

D

"27) Marston Company has outstanding accounts receivable totaling €6.5 million as of December 31 and sales on credit during the year of €24 million. There is also a credit balance of €12,000 in the allowance for doubtful accounts. After aging its receivables, the company estimates that 8% of its total outstanding receivables will be uncollectible. What will be the amount of bad debt expense recognized for the year? A) €532,000 B) €520,000 C) €512,000 D) €508,000"

D

"27. Impairment of a long-term operating asset occurs when ________. a. the carrying value of the asset is systematically reduced over its useful economic life b. there is a failure to meet the legal obligations or conditions of a loan by which that asset was acquired c. an asset or part of an asset is removed from the asset portfolio d. an asset's total future cash-generating ability falls below its carrying value"

D

"29) Smith-Miller Enterprises has inventory of $657,000 in its stores as of December 31. It also has two shipments in-transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $128,000 was sold f.o.b. destination and the second shipment of $76,000 was sold f.o.b. shipping point. What amount of inventory should Smith-Miller report on its balance sheet as of December 31? A) $657,000 B) $861,000 C) $785,000 D) $733,000"

D

"29. Lunar Products purchased a computer for $13,000 on July 1, 2018. The company intends to depreciate it over 4 years using the double-declining balance method. Residual value is $4,000. What is depreciation for 2019? A. $2,250 B. $3,250 C. $3,375 D. $4,875"

D

"3. Wang Company had the following transactions during 2016: Sales of $10,800 on account Collected $4,800 for services to be performed in 2017 Paid $2,600 cash in salaries for 2016 Purchased airline tickets for $600 in December for a trip to take place in 2017 What is Wang's 2016 net income using accrual accounting? A. $8,800 B. $13,600 C. $13,00 D. $8,200"

D

"32) Jesse Company has the following data for January: Beginning inventory - $215,000 Net purchases - $605,000 Net sales - $440,000 Gross profit percentage - 40% What is the company's estimated cost of goods sold for January using the gross profit method? A) $165,000 B) $176,000 C) $225,000 D) $264,000"

D

"32. According to the FASB's conceptual framework, which of the following best describes the distinction between expenses and losses? a. Losses are reported net of related tax effect and expenses are not. b. Losses are extraordinary items, and expenses are ordinary items. c. Losses are material, and expenses are immaterial. d. Losses result from peripheral or incidental transactions, and expenses result from ongoing major or central operations of the entity."

D

"34. Fox Co. sublet to Owl Co. a portion of its offices for 5 years at an annual rental of $60,000, beginning on March 1. The tenant paid 1 year's rent in advance which Fox recorded as a credit to unearned rental income. Fox reports on a calendar-year basis. The adjustment on December 31 of the first year should be a. No entry b. Debit Unearned rental income - 10,000 Credit Rental income - 10,000 c. Debit Rental income - 10,000 Credit Unearned rental income - 10,000 d. Debit Unearned rental income - 50,000 Credit Rental income - 50,000"

D

"36) Lunar Products purchased a computer for $13,000 on July 1, 2016. The company intends to depreciate it over 4 years using the double-declining balance method. Residual value is $1,000. What is depreciation for 2017? A) $3,000 B) $3,250 C) $4,500 D) $4,875"

D

"36. In 2017, Yumster Company determined that a production machine used in its operations was impaired and an impairment loss of $110,000 was recognized. In 2017, the fair value of the asset increased by $170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2017? A. U.S. GAAP permits the recognition of this impairment reversal as income from continuing operations. B. U.S. GAAP permits the recognition of this impairment reversal as other comprehensive income. C. U.S. GAAP allows the recognition of this impairment reversal as either income from continuing operations or as other comprehensive income, depending upon management's intent. D. U.S. GAAP does not permit recognition of gains on reversal of previous impairment loss write-downs."

D

"36. Which of the following items is not included in the financing activities section of the statement of cash flows? a. Cash effects of issuing and redeeming bonds b. Cash effects of making payments to common and preferred shareholders c. Cash effects of paying a dividend d. Cash effects of purchasing a building"

D

"41) In 2017, Yumster Company determined that a production machine used in its operations was impaired and an impairment loss of $110,000 was recognized. In 2017, the fair value of the asset increased by $170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2017? A) U.S. GAAP permits the recognition of this impairment reversal as income from continuing operations. B) U.S. GAAP permits the recognition of this impairment reversal as other comprehensive income. C) U.S. GAAP allows the recognition of this impairment reversal as either income from continuing operations or as other comprehensive income, depending upon management's intent. D) U.S. GAAP does not permit recognition of gains or reversal of previous impairment loss write-downs."

D

"42. Which of the following is not an example of a judgment in accounting for equipment? A. the equipment useful life B. the salvage value of the equipment C. whether there are indicators that the equipment is impaired. D. accounting for the maintenance of the equipment"

D

"5) Net realizable value of trade accounts receivable is calculated as ________. A) net receivables plus sales discounts forfeited B) gross receivables minus sales discounts taken C) gross receivables minus sales discounts forfeited D) gross receivables minus allowance for uncollectible accounts"

D

"5. Tulip Corporation paid $24,000 for 12 months' insurance coverage on July 1, 2019. Tulip recorded the full amount as prepaid insurance. What is the adjusting journal entry at December 31, 2019?? A. Insurance Expense 12,000 Cash 12,000 B. Insurance Expense 24,000 Prepaid Insurance 24,000 C. Prepaid Insurance 12,000 Insurance Expense 12,000 D. Insurance Expense 12,000 Prepaid Insurance 12,000"

D

"6) Bombard Company has the following data available: Transaction - Units Purchased - Unit Cost - Units Sold Beginning Inventory - 500 - $10 - March 1 Purchase - 200 - $12 - April 25 Sale - - - 350 June 10 Purchase - 300 - $14 July 20 Sale - - - 250 October 30 Purchase - 350 - $15 - December 15 Sale - - - 400 If Bombard Company uses a perpetual LIFO inventory system, the cost of goods sold for the year is ________. A) $3,500 B) $5,520 C) $16,850 D) $13,350"

D

"6. Unearned revenue is classified as a(n): A. asset account. B. revenue account. C. contra revenue account. D. liability."

D

"9. The flow of a manufacturer's product costs through the inventory accounts is ________. a. Work-in-Process Inventory, Cost of Goods Sold, and Finished Goods Inventory b. Raw Materials Inventory, Cost of Goods Sold, and Finished Goods Inventory c. Raw Materials Inventory, Finished Goods Inventory, and Work-in-Process Inventory d. Raw Materials Inventory, Work-in-Process Inventory, and Finished Goods Inventory"

D

"ABC Co. provides the following information regarding Accounts receivable during 2016. Net credit sales during 2016 - $1,500,000 Accounts receivable at 12/31/16 - $600,000 Allowance for Doubtful Accounts (credit bal.) at 12/31/16, unadjusted - $200,000 6. Assume ABC uses the percentage (% ) of sales approach to estimate bad debt, and based on historical data, they determine that 4% of net credit sales is a sufficient estimate. What is ABC's Net Realizable Value of Accounts receivable on its 2016 Balance Sheet? a. $540,000 b. $400,000 c. $1,240,000 d. $340,000 e. None of the above"

D

"Jones Corporation enters into a contract with Warner Video to add their programs to Jones' network. Warner will pay Jones an upfront fixed fee of $250,000 for 12 months of access, and will also pay a $100,000 bonus if Jones' users access Warner Video for at least 10,000 hours during the 12-month period. Jones estimates that it has a 80% chance of earning the $100,000 bonus. 22) Refer to Jones Corporation. Using the most-likely-amount approach, the transaction price would be ________. A) $200,000 B) $250,000 C) $330,000 D) $350,000"

D

"Use the following information to answer questions 14 & 15: Jones Corporation enters into a contract with Warner Video to add their programs to Jones' network. Warner will pay Jones an upfront fixed fee of $250,000 for 12 months of access, and will also pay a $100,000 bonus if Jones' users access Warner Video for at least 10,000 hours during the 12-month period. Jones estimates that it has a 80% chance of earning the $100,000 bonus. 15. Refer to Jones Corporation. Using the most-likely-amount approach, the transaction price would be ________. A. $200,000 B. $250,000 C. $330,000 D. $350,000"

D

"Use the following information to answer questions 17 & 18: On 8/1/16, NFP Inc. made a $115,000 sale on account with the terms 3/10, net 30. NFP uses the net method to record accounts receivable. 17. What is that 8/1/16 entry to record the accounts receivable? A. Debit Accounts Receivable $115,000 - credit Cash $115,000 B. Debit Cash $111,550 - credit Sales $111,550 C. Debit Accounts Receivable $115,000 - credit Sales $115,000 D. Debit Accounts Receivable $111,550 - credit Sales $111,550"

D

"XYZ Co., a manufacturer of widgets, purchased machinery on 1/1/15 for $3,500,000. XYZ also paid $200,000 for its title and an additional $50,000 to ship the machine to its facility in Philadelphia. The machine's expected useful life is estimated to be 10 years, and have a residual value of $750,000. During its 10 years, the machine is expected to produce 28,000 widgets as follows: • Year 1 - 1,000 • Years 2-10 - 3,000 widgets per year 20. Assuming XYZ uses straight-line depreciation, what amount is the book value of the machine on 12/31/16? a. $2,900,000 b. $2,400,000 c. $3,450,000 d. $3,150,000 e. None of the above"

D