AC210 Final

Digger Enterprises purchased equipment for $64,000. In addition, shipping charges of $800 were incurred to obtain the equipment. The company paid $5,000 to construct a foundation and install the equipment. The equipment is estimated to have a residual value of $6,000 at the end of its 5-year useful life. Using the straight-line method, what is the book value of the equipment at the end of the third full year of use? $22,120 $28,400 $31,520 $25,520

$31,520

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.

The journal entry to record depreciation: a. decreases assets and decreases net income. b. decreases assets and increases net income c. increases assets and decreases net income. d. Increases assets and decreases liabilities.

a. decreases assets and decreases net income.

The journal entry to record depreciation: a. decreases assets and decreases net income. b. decreases assets and increases net income c. increases assets and decreases net income. d. increases assets and decreases liabilities

a. decreases assets and decreases net income.

Magno Cereal Corporation uses a standard cost system for its "crunchy pickle" cereal. The materials standard for each batch of cereal produced is 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pickles at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for August? a. $1,500 Unfavorable b. $18,000 Favorable c. $19,500 Unfavorable d. $54,000 Unfavorable

b. $18,000 Favorable

When a company collects sales tax from a customer at the point of sale, the event is recorded by: a. A debit to Sales Tax Expense and a credit to Sales Tax Payable. b. A debit to Cash and a credit to Sales Tax Payable. c. A debit to Sales Tax Payable and a credit to Sales Tax Expense. d. A debit to Cash and a credit to Sales Tax Revenue. e. A debit to Sales Tax Payable and a credit to Cash.

b. A debit to Cash and a credit to Sales Tax Payable.

A company declared a $0.75 per share cash dividend. The company has 240,000 shares authorized, 73,000 shares issued, and 70,000 shares of common stock outstanding. The journal entry to record the dividend declaration is: a. Debit dividends payable and credit cash for $54,750 b. Debit dividends and credit dividends payable for $52,500 c. Debit dividends and credit dividends payable for $54,750 d. Debit dividends payable and credit cash for $180,000

b. Debit dividends and credit dividends payable for $52,500

On February 16, a company declares a 40¢ dividend to be paid on April 5. There are 2,060,000 shares of common stock issued and outstanding. The entry recorded by the company on February 16 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.

Which of the following are payroll taxes that are paid by employees? a. Federal income tax, federal unemployment tax, and FICA tax 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 FICA tax

d. Federal income tax withheld, state income tax withheld, and FICA tax

Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table? a. The cost of the wood used in the table. b. The commission paid to the salesperson who sold the table. c. The amount paid to the individual who stains the table. d. The cost of glue used in the table.

d. The cost of glue used in the table.

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

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

A favorable labor rate variance indicates that a. actual hours exceed standard hours. b. standard hours exceed actual hours. c. the actual rate exceeds the standard rate. d. the standard rate exceeds the actual rate.

d. the standard rate exceeds the actual rate.

John Zebu is the only employee of Atlantic Records, Inc. During the first week of January, Zebu earned $1,200.00 and had federal and state income tax withholdings of $60.00 and $22.50, respectively. FICA taxes are 7.65 % on earnings up to $117,000, or $91.80. State and federal unemployment taxes for the period are $75.00 and $12.00, respectively. What would be the amount of Zebu's payroll check for the first week of January? $1,200.00 $1,108.20 $1,025.70 $938.70 $933.90

$1,025.70

During one pay period, your company distributes $132,000 to employees as net pay. The income tax withholdings from employee wages were $19,300 and the FICA withholdings from employee wages were $8,945. Total payroll costs (total payroll expense) to the company for this pay period, excluding any unemployment taxes, was: $178,135 $151,300 $160,245 $169,190

$169,190

Cockroach Company purchased a new van on January 1, 2016. The van cost $32,000. It has an estimated life of five years and the estimated residual value is $4,100. Cockroach uses the double-declining-balance method to compute depreciation. What is the adjusted balance in the Accumulated Depreciation account at the end of 2017, the second year? $5,120. $20,480. $6,400 $15,360.

$20,480.

A company paid $500,000 to purchase equipment and $15,000 to have the equipment delivered to and installed in the company's production facilities. Commercial use of the equipment began on March 1, 2017. The estimated residual value of the equipment is $5,000. The equipment is expected to be used a total of 28,000 hours throughout its estimated useful life of six years. The company has a December 31, 2017 year-end and had used the equipment a total of 11,200 hours prior to the year-end. Using the units-of-production method, what amount of depreciation expense (to the nearest thousand) would the company report for this equipment in the income statement prepared for the year-ended December 31, 2017? $102,000 $198,000 $204,000 $206,000

$204,000

Trickster Travel, Inc. borrowed $500,000 on November 1, 2017, and signed a twelve-month note bearing interest at 6% per year. Principal and interest are payable in full at maturity on October 31, 2016. No entries have yet been made in 2017 with respect to the note. In connection with this note, Trickster Travel, Inc. should report interest payable at December 31, 2017, in the amount of: $8,000. $30,000. $5,000. $25,000.

$5,000.

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? $77,000 $113,000 $123,000 $87,000

$77,000

Just In Thyme, Inc. has the following December 31, 2018 equity balances: Common stock of $20,000; Additional paid-in capital of $30,000; and Retained earnings of $50,000. If Just In Thyme repurchases shares of its stock for $10,000, the total stockholders' equity balance would equal: $60,000 $90,000 $110,000 $40,000

$90,000

Melrose inc. buys back 301,000 shares of its stock from investors at $7.00 a share. Two years later, it reissues this stock for $6.50 a share. The stock reissue would be recorded with a debit to cash for: A. $1,956,500 million, a debit to additional paid in capital for $150,500, and a credit to treasury stock for $2,107,000 million B. $2,107,000 million, a credit to treasury stock for $1,956,500, and a credit to additional paid in capital for $150,500 C. $2,107,000 million and a credit to treasury stock for $2,107,000 million D. $1,956,500 million and a credit to treasury stock for $1,956,500

A. $1,956,500 million, a debit to additional paid in capital for $150,500, and a credit to treasury stock for $2,107,000 million

Treasury stock: A. Is a contra-equity account B. Does not appear on the balance sheet C. Is recorded as additional paid in capital D. Is an asset account

A. Is a contra-equity account

A corporate charter specifies that the company may sell up to 34 million shares of stock. The company sells 26 million shares to investors and later buys back 10 million shares. The current number of outstanding shares after these transactions have been accounted for is: A. 34 million shares B. 16 million shares C. 8 million shares D. 17 million shares

B. 16 million shares

Anthem inc. issues 200,000 shares of stock with a par value of $0.11 for $160 per share. Three years later, it repurchases these shares for $90 per share. Anthem records the repurchase in which of the following ways? A. Debit common stock for $22,000, debit additional paid in capital for $17,978,000 and credit cash for $18 million B. Debit treasury stock for $18 million and credit cash for $18 million C. Debit stockholders equity for $32 million, credit additional paid in capital for $18 million and credit cash for $18 million D. Debit common stock for $22,000, debit additional paid in capital for $31,978,000 and credit cash for $32 million

B. Debit treasury stock for $18 million and credit cash for $18 million

What does the par value of a stock represent? A. The current market value of a stock B. It is a legal concept not related to the market value of a stock C. The amount that would be paid if a stock was purchased by the issuing company D. The average market value of a stock for the year to date

B. It is a legal concept not related to the market value of a stock

A company issues 1 million shares of common stock with a par value of $0.15 for $16.30 a share. The entry to record this transaction includes a debit to cash for: A. $150,000, a debit to capital receivable for $16,150,000, a credit to common stock for $150,000, and a credit to additional paid in capital for $16,150,000 B. $16,300,000 and a credit to common stock for $16,300,000 C. $16,300,000, a credit to common stock for $150,000, and a credit to additional paid in capital for $16,150,000 D. $150,000 and a credit to common stock for $150,000

C. $16,300,000, a credit to common stock for $150,000, and a credit to additional paid in capital for $16,150,000

A company issued 1,200 shares pf $62 par value stock for $90,000. What is the total amount of contributed capital? A. $74,400 B. $15,600 C. $90,000 D. $62

C. $90,000

The overall impact of paying a cash dividend is that A. Liabilities decrease, equity increases B. Assets increase, equity increases C. Liabilities increase, equity decreases D. Assets decrease, equity decreases

D. Assets decrease, equity decreases

When a stockholder sells its shares to another person for more than its original cost, the corporation: A. Records a credit to common stock B. Records a debit to treasury stock C. Records a gain on the sale of the stock D. Does not make a journal entry

D. Does not make a journal entry

Which of the following would be considered a variable cost for a restaurant? a. Cost of food inventory. b. Rent Expense. c. Property taxes on the restaurant land and building. d. Salary of the restaurant manager.

a. Cost of food inventory.

On October 1, 2015, Junk Inc. borrows $213,000 on a three-year note that requires the company to pay 8% interest on March 31 and September 30. On December 31, 2015, the adjusting entry to accrue interest on the note should debit: a. Interest Payable and credit Interest Expense for $4,260. b. Interest Expense and credit Interest Payable for $4,260. c. Interest Expense and credit Cash for $8,520. d. Interest Expense and credit Interest Payable for $8,520. e. Interest Expense and credit Interest Payable for $17,040.

b. Interest Expense and credit Interest Payable for $4,260.

For "Stock Splits," which of the following is FALSE? a. A stock split creates more pieces of the same pie. b. Stock splits are the same thing as dividends. c. Stock splits do not affect retained earnings. d. Stock splits do not affect cash.

b. Stock splits are the same thing as dividends.

A company issues 1 million shares of common stock with a par 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.

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 $8,000 to Ralph Loring. What is the effect of the sale on April 30, 2015? a. Abner Crummie, Inc. will record 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. Abner Crummie, Inc. will record a decrease in Cash of $8,000.

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

There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? a. It details the required direct labor hours. b. It details the required raw materials purchases. c. It is calculated based on the sales budget and the desired ending inventory. d. It summarizes the costs of producing units for the budget period.

c. It is calculated based on the sales budget and the desired ending 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 capitalized. 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 capitalized.

Which of the following is TRUE? a. Equity has to be repaid. b. Interest on debt is not tax deductible. c. Shareholders do not have voting rights. d. Dividends are optional.

d. Dividends are optional.

Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset? a. To indicate how the asset has physically deteriorated. b. To record that the asset's market value declines over time. c. To match the cost of the asset to the period in which it generates revenue. d. To reflect the concept of conservatism and enhance earnings per share.

c. To match the cost of the asset to the period in which it generates revenue.

All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: Total Sales: January $50,000 February $60,000 March $40,000 April $30,000 What is the amount of cash that should be collected in March? a. $24,000 b. $37,000 c. $41,000 d. $51,000

d. $51,000

What kind of account is Deferred Revenue? a. A revenue account on the income statement b. A revenue account on the balance sheet c. A liability on the income statement d. A liability on the balance sheet

d. A liability on the balance sheet

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 Paid-in Capital.

Zebra Inc. buys new soda machines for $450,000 and pays $50,000 for installation costs. One-half of the total cost or $250,000 is paid in cash; a note in the amount of $250,000 is signed. How should the company record this transaction? a. Debit Cash for $250,000, debit Notes Payable for $250,000, and credit Equipment for $500,000 b. Debit Cash for $250,000, debit Notes Payable for $250,000, credit Equipment for $450,000, and credit Operating Expenses for $50,000 c. Debit Equipment for $450,000, debit Operating Expenses for $50,000, credit cash for $250,000, and credit Notes Payable for $250,000 d. Debit Equipment for $500,000, credit Cash for $250,000, and credit Notes Payable for $250,000

d. Debit Equipment for $500,000, credit Cash for $250,000, and credit Notes Payable for $250,000

On January 5, 2017, the Dream Resort books and accepts a cash payment for $32,000 for vacation services to be provided during spring break in March. The journal entry that will be made in March after the services are provided will include a: a. debit to Accounts Payable and a credit to Service Revenue. b. debit to Cash and a credit to Deferred Revenue. c. debit to Cash and a credit to Service Revenue. d. credit to Accounts Receivable and a credit to Service Revenue. e. credit to Service Revenue and a debit to Deferred Revenue.

e. credit to Service Revenue and a debit to Deferred Revenue.