ac 210 final

The entry to record the initial borrowing of cash by issuing a promissory note will include a debit to ________ and a credit to ________. A) Cash; Notes Payable B) Notes Payable; Cash C) Interest Expense; Cash D) Cash; Interest Expense

A) Cash; Notes Payable

When preparing the balance sheet for Papago Co. for December 31, 2018, which item would not be classified as a current liability? A) Note payable due March 1, 2020 B) Accounts payable C) Income taxes due on September 15, 2019 D) The current portion of a 30-year mortgage

A) Note payable due March 1, 2020

Viewmont Manufacturing began the year owing its suppliers $4,800 for merchandise purchased last year. Viewmont then sold half of this merchandise for $8,000 on account. Two weeks later, Viewmont paid its suppliers $1,600 and bought another $6,400 of merchandise on account. Viewmont now has an Accounts Payable balance of: A) $17,600. B) $9,600. C) $1,600. D) $7,200.

B) $9,600.

On November 1, 2018, Sky Mountain Co. borrowed $200,000 cash on a 1-year, 6% note payable that requires Sky Mountain to pay both principal and interest on October 31, 2019. Given no prior adjusting entries have been recorded, the adjusting journal entry on December 31, 2018, Sky Mountain's year-end, would include a: A) credit to Cash of $2,000. B) debit to Interest Expense of $12,000. C) credit to Interest Payable of $2,000. D) credit to Note Payable of $2,000.

C) credit to Interest Payable of $2,000

During one pay period, Star Valley Company distributes $234,900 to employees as net pay. The income tax withholdings were $34,200 and the FICA withholdings were $9,000. Total payroll costs to the company for this pay period, excluding any unemployment taxes, was: A) $269,100. B) $234,900. C) $278,100. D) $287,100.

D) $287,100.

Payroll taxes paid by employees include which of the following? A) Federal income tax, federal unemployment tax, and Medicare B) Social security, federal unemployment tax, and state unemployment tax C) Social security, federal income tax, and federal unemployment tax D) Federal income tax withheld, state income tax withheld, and Medicare

D) Federal income tax withheld, state income tax withheld, and Medicare

which of the following events does not create a liability? A) Buying goods and services on credit B) Obtaining a short-term loan C) Issuing long-term debt D) Remitting sales tax to the government

D) Remitting sales tax to the government

Redmont Company's gross salaries and wages are $30,000, and it withholds $4,500 for income taxes and $2,000 for FICA taxes, the journal entry to record the employees' pay (assuming they have been incurred but not paid) should include a: A) debit to Salaries and Wages Expense for $23,500. B) debit to Salaries and Wages Payable for $23,500. C) credit to Salaries and Wages Payable for $30,000. D) credit to Salaries and Wages Payable for $23,500.

D) credit to Salaries and Wages Payable for $23,500.

Net income: $7,000 Cash dividends paid to stockholders: $2,000 Cash proceeds from sale of land: $3,000 Cash proceeds from bank loan: $5,000 Cash payment (principal) on bank loan: $1,000 Cash paid to purchase equipment: $4,000 Use the information above to answer the following question. The company would report net cash provided by (used in) financing activities of: a. $(2,500). b. $2,000. c. $5,000. d. $6,000.

b. $2,000

Net income:$12,500 Cash dividends paid to stockholders:$3,000 Cash proceeds from sale of land:$3,500 Cash proceeds from bank loan:$8,000 Cash payment (principal) on bank loan:$2,100 Cash paid to purchase equipment:$6,000 The company would report net cash provided by (used in) investing activities of: a.) $(2,500). b.) $(1,400). c.) $8,000. d.) $12,500.

a.) $(2,500).

Melrose Inc. buys back 314,000 shares of its stock from investors at $13.50 a share. Two years later, it reissues this stock for $13.00 a share. The stock reissue would be recorded with a debt to cash for: a.) $4,084,000 Million, a debit to additional pain in capital for $157,000 and a credit to treasury stock for $4,239,000 b.) $4,249,000 Million, a credit to treasury stock for $4,082,000 million and a credit to additional paid in capital for $157,000 c.) $4,239,000 million and a credit to treasury stock for $4,239,000 million d.) $4,082,000 million and a credit to treasury stock for $4,082,000

a.) $4,084,000 Million, a debit to additional pain in capital for $157,000 and a credit to treasury stock for $4,239,000

Contributed capital totals $30,000, Retained Earnings equals $65,000, Treasury stock equals $18,000 and common stock equals $10,000. If the company does not have any accumulated other comprehensive income (loss) what is the total amount of stockholders equity? a.) $77,000 b.) $113,000 c.) $123,000 d.) $87,000

a.) $77,000

accumulated depreciation a.) appears in the asset section of a balance sheet b.) appears on the income statement c.) is a liability on the balance sheet d.) is a contra-stockholders equity item

a.) appears in the asset section of a balance sheet

Goodwill purchased by a company a.) is not amortized, but is tested annually for impairment b.) is amortized using the straight line method over the business's useful life. c.) is amortized using the units of production method or accelerated method over 20 years. d.) Is not amortized and is not tested for impairment

a.) is not amortized, but is tested annually for impairment

the number of shares outstanding equals the number of shares: a.) issued minus the number of shares in treasury b.) authorized minus the number of shares issued c.) issued plus the number of shares in treasury d.) authorized plus the number of shares issued

a.) issued minus the number of shares in treasury

A company bought land and a building for $128,000. The building has a useful life of 20 years. Why should the company split the $128,000 cost between the land and the building? a.) land is not depreciated while the building will be depreciated over its 20-year useful life. b.) the cost should not be split between the land and building c.) The land will be depreciated over 40 years and the building will depreciated over 20 years d.) both the land and the building will be depreciated over 20 years.

a.) land is not depreciated while the building will be depreciated over its 20-year useful life.

4. Cash flows from financing activities include all of the following except: a. payment of long-term debt. b. payment of interest. c. proceeds from stock issuance. d. cash dividends paid.

b. payment of interest.

Avalon Industries buys equipment for $24,000, expects to use it for ten years and anticipates its residual value to be $3,000. Using the straight line method the company should report annual depreciation for the equipment of: a.) $4,200 b.) $2,100 c.) $2,400 d.) $4,800

b.) $2,100

Just in Tyme, Inc. has the following December 31, 2018 quit balances: Common stock of $20,000 additional paid-in capital of $30,000 and retained earnings of $50,000. If Just In Tyme repurchases shares of its stock for $10,000, the total stock holders equity balance would equal: a.) $60,000 b.) $90,000 c.) $110,000 d.) $40,000

b.) $90,000

On February 16, a company declares a 40 cent dividend to be paid on April 5th. There are 2,060,000 shares of common stock issued and outstanding. The entry recorded by the company on February 16th includes a debit to: a.) dividends payable and a credit to cash for $781,600 b.) dividends and a credit to dividends payable for $824,000. c.) Dividends and a credit to dividends payable for $781,600 d.) dividends payable and a credit to cash for $824,000

b.) dividends and a credit to dividends payable for $824,000

7. A company's cash flows from investing activities include cash transactions relating to the purchase and disposal of which types of assets? a. All of a company's assets b. All of a company's assets except inventory c. All of a company's non-current assets d. Property, plant and equipment

c. All of a company's non-current assets

6. Which of the following represents a cash inflow from financing activities? a. Issuing stock in exchange for another company's stock. b. Paying a bond's face value at maturity. c. Issuing long-term bonds at a discount. d. Receiving interest on promissory notes.

c. Issuing long-term bonds at a discount.

A company issues 1 million shares of common stock with a pr value of $0.05 for $15.30 a share. The entry to record this transaction includes a debit to Cash for: a.) $50,000 and a credit to common stock for $50,000 b.) $15,300,000 and a credit to common stock for $15,300,000 c.) $15,300,000 a credit to common stock for $50,000 and a credit to Additional paid in capital for $15,250,000 d.) $50,000, a debit to capital receivable for $15,250,000, a Credit to common stock for $50,000 and a credit to additional paid in capital for $15,250,000

c.) $15,300,000 a credit to common stock for $50,000 and a credit to Additional paid in capital for $15,250,000

Marshall Company purchases a machine for $800,000. The machine has an estimated residual value of $40,000. The company expects the machine to produce 2,000,000 units. The machine is used to make 400,000 units during the current period. If the units of production method is used, the depreciation expense for this period is: a.) $160,000 b.) $800,000 c.) $152,000 d.) $760,000

c.) $152,000

Augusta Company reported that its bonds with a face value of $80,000 and a carrying value of $60,500 are retired for $71,000 cash. The amount to be reported under cash flows from financing activities is: a.) ($90,500) b.) ($10,500) c.) ($71,000) d.) $0; this is an operating activity.

c.) ($71,000)

in an initial public offering on May 1, 2009, Timmy Hilfigure purchased 1,000 shares of Abner Crummie, Inc. for $5,000. On April, 30, 2015, Timmy Hilfigure sold the 1,000 shares for $8000 to Ralph Loring. What is the effect of the sale on April 30, 2015? a.) Abner Crummie, Inc. will recod a $3,000 loss. b.) Abner Crummie, Inc. will record a $3,000 gain. c.) Abner Crummie, Inc. will not be directly affected by this transaction. d.) Aber Crummie, Inc. will recod a decrease in cash of $8,000.

c.) Abner Crummie, Inc. will not be directly affected by this transaction.

Blair Madison Co. issues $1.7 million of new stock and pays $261,000 in cash dividends during the year. In addition, the company took advantage of falling interest rates to borrow $1.57 million in a new bond issue and paid off existing bonds with a face value of $2.35 million. The company bought 507 of another company's $1,070 bonds at a $107,000 premium. The net cash flow provided by financing activities is: a.) An inflow of $780,000. b.) An outflow of $261,000. c.) An inflow of $659,000. d.) An outflow of $107,000.

c.) An inflow of $659,000.

1. Which of the statements below is correct when comparing the direct and indirect methods of reporting operating cash flows? a.) The direct method starts with net income and makes adjustments to arrive at the net cash provided by or used in operations. b.) The indirect method starts with cash collected from customers and details cash inflows and outflows from operations. c.) The indirect method starts with net income and makes adjustments to arrive at the net cash provided by or used in operations. d.) The net cash provided by or used in operations will be different depending on whether the direct or indirect method is used.

c.) The indirect method starts with net income and makes adjustments to arrive at the net cash provided by or used in operations.

which of the following statements about capitalizing costs is correct? a.) capitalizing costs refers to the process of converting assets to expenses. b.) all capitalized assets can be depreciated c.) capitalizing a cost means to record it as an asset d.) Capitalizing costs results in an immediate decrease in net income.

c.) capitalizing a cost means to record it as an asset

With of the following items would not be considered a long-lived asset? a.) buildings b.) land improvements c.) inventory d.) land

c.) inventory

Which of the following accurately describes the treatment of ordinary and extraordinary repairs? a.) ordinary repairs are expensed as incurred; extraordinary repairs are expensed as incurred b.) ordinary repairs are treated as a capital expenditure; extraordinary repairs are expensed as incurred c.) ordinary repairs are expensed as incurred; extraordinary repairs are treated as capital expenditure d.) ordinary repairs are treated as a capital expenditure; extraordinary repairs are treated as a capital expenditure.

c.) ordinary repairs are expensed as incurred; extraordinary repairs are treated as capital expenditure

3. Consider the following information: Net income: $20,000 Depreciation: 3,000 Increase in accounts receivable: 1,000 Decrease in prepaid rent: (400) Increase in accrued liabilities: $900 Cash paid to purchase office equipment: $4,000 What is the net cash provided by operating activities? a. $17,500 b. $18,500 c. $21,500 d. $23,300

d. $23,300

5. Dover Co.'s comparative balance sheet indicated that the Equipment account increased by $40,000. Upon further investigation of the account changes, it is determined that Dover purchased equipment totaling $70,000 for the year. It also sold equipment with an original cost of $30,000 for $8,000 cash. Assuming these are the only transactions affecting the investing activities, Dover will report net cash flows provided by (used in) investing activities of: a. ($40,000). b. ($70,000). c. ($32,000). d. ($62,000)

d. ($62,000)

The Viviana Co. uses the indirect method to determine its cash flow from operations. Which of the following items will be subtracted from net income to find its cash flow from operations? a. Decrease in Supplies b. Increase in Accounts Payable c. Depreciation Expense d. Increase in Accounts Receivable.

d. Increase in Accounts Receivable.

Patterson Co.'s Depreciation Expense is $23,800 and the beginning and ending accumulated depreciation balances are $151,900 and $156,900, respectively. What is the cash paid for depreciation? a.) $28,800 b.) $23,800 c.) $5,000 d.) $0

d.) $0

Net income:$13,500 Cash dividends paid to stockholders:$3,200 Cash proceeds from sale of land:$3,600 Cash proceeds from bank loan:$8,600 Cash payment (principal) on bank loan:$2,300 Cash paid to purchase equipment:$6,400 The company would report net cash provided by (used in) financing activities of: a.) $8,600. b.) $(4,250). c.) $10,900. d.) $3,100.

d.) $3,100.

Durango, Inc. purchased a parcel of land for $450,000. It paid attorney fees of $3,000 to verify title to the land. In addition, it paid a brokers fee for $7,500 to help find a suitable parcel of land. This parcel of land should be recorded in the accounting records for: a.) $450,000 b.) $453,000 c.) $457,500 d.) $460,500

d.) $460,500

The Retained Earnings account has a beginning balance of $325,975 and an ending balance of $357,113. Net income is $40,601. Which of the following statements is correct? a.) $40,601 would be added when determining cash flows from financing activities. b.) $31,138 would be added when determining cash flows from financing activities. c.) $325,975 would be added when determining cash flows from operating activities. d.) $9,463 would be subtracted when determining cash flows from financing activities.

d.) $9,463 would be subtracted when determining cash flows from financing activities.

Bardell, Inc. prepared its statement of cash flows for the year. The following information is taken from that statement: Net cash provided by operating activities: $15,500 Net cash provided by investing activities: $4,300 Cash balance, beginning of year: $5,900 Cash balance, end of year: $9,300 What is the amount of net cash provided by (used in) financing activities? a.) $16,400 b.) ($3,400) c.) $3,400 d.) ($16,400)

d.) ($16,400)

If shares of common stock are issued at a market price greater than par value, the amount in excess of par should be credited to: a.) common stock b.) treasury stock c.) retained earnings. d.) Additional Paid-in Capital

d.) Additional Pain-In Capital

ROE equation

net income/ average stockholders equity.

EPS equation

net income/average number of common shares outstanding