ACCY 202 test 1

Accounts receivable from sales transactions were $49,682 at the beginning of the year and $63,252 at the end of the year. Net income reported on the income statement for the year was $128,367. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is Select the correct answer. `$128,367 `$141,937 `$114,797 `$13,570

$114,797

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year were $1,375,000. Determine the over or underapplied amount for the year: a.$118,250 underapplied b.$118,250 overapplied c.$17,500 overapplied d.$17,500 underapplied

$17,500 underapplied

Reynolds Manufacturers Inc. has estimated total factory overhead costs of $108,000 and expected direct labor hours of 10,800 for the current fiscal year. If job number 117 incurs 2,000 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for: a.$2,000 b.$54,000 c.$20,000 d.$108,000

$20,000

A company with working capital of $341,836 and a current ratio of 3.1 pays a $79,949 short-term liability. Determine the amount of working capital immediately after payment. Select the correct answer. $79,949 $261,887 $341,836 $421,785

$341,836

The Darwin Company reports the following information: Sales $76,500 Direct materials used 7,300 Depreciation on factory equipment 4,700 Indirect labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales salaries expense 15,600 Office salaries expense 8,900 Indirect materials 1,200 Product costs are: a.$29,200 b.$35,000 c.$30,300 d.$24,500

$35,000

Compute conversion costs given the following data: Direct Materials, $397,300; Direct Labor, $197,600; Factory Overhead, $194,000 Selling Expenses, $35,600. $591,300 $391,600 $158,400 $788,900

$391,600

A company reports the following: Net income $160,000 Preferred dividends $10,000 Shares of common stock outstanding 20,000 Market price per share of common stock $35 The company's earnings per share on common stock is: $13.33 $7.50 $35.00 $8.50

$7.50

The following information is available from the current period financial statements: Net income 115,980 Depreciation expense 21,033 Increase in accounts receivable 20,735 Decrease in accounts payable 19,595 Determine the net cash flow from operating activities using the indirect method. Select the correct answer. `$177,343 `$96,087 `$115,980 `$96,683

$96,683

Jensen Company reports the following: Direct materials used $345,000 Direct labor incurred $250,000 Factory overhead incurred $400,000 Operating expenses $175,000 Jensen Company's product costs are: a.$920,000 b.$995,000 c.$770,000 d.$825,000

$995,000

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000. What is Crain's predetermined overhead rate? ____________________per direct labor hour Was overhead overapplied or underapplied for the year? By how much? ________________ overhead $_________________

-$21 -Overapplied -60,000

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $375,000 and accounts receivable increased by $29,000 during the year, what was the amount of cash received from customers? _____________________ b. If income tax expense for the current year was $39,000 and income tax payable decreased by $21,000 during the year, what was the amount of cash payments for income tax? ______________________

-346,000 -60,000

The following information is available from the current period financial statements: Net income 118,909 Depreciation expense 24,327 Increase in accounts receivable 17,232 Decrease in accounts payable 15,805 Determine the net cash flow from operating activities using the indirect method. Select the correct answer. `$118,909 `$110,199 `$176,273 `$61,545

110,199

Laramie Technologies had the following data: Cost of materials used $50,000 Direct labor costs 56,000 Factory overhead 28,000 Work in process inventory, beginning 45,000 Work in process inventory, ending 32,000 Calculate the cost of goods manufactured. ___________________________

147,000

Based on the following data for the current year, what is the inventory turnover? Net sales on account during year $422,191 Cost of goods sold during year $173,738 Accounts receivable, beginning of year $43,842 Accounts receivable, end of year $53,660 Inventory, beginning of year 35,420 Inventory, end of year 42,167 Do not round interim calculations. Round your final answer to one decimal place. Select the correct answer. `33.5 `1.1 `2.4 `4.5

4.5

Durrand Corporation's accumulated depreciation increased by $11,321, while patents decreased by $3,910 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $3,497 from sale of land. Reconcile a net income of $45,982 to net cash flow from operating activities.

57,716

Hsu Company reported the following on its income statement: Income before income taxes $314,823 Income tax expense $94,447 Net income $220,376 An analysis of the income statement revealed that interest expense was $61,624. Determine Hsu Company's times interest earned ratio. Select the correct answer. `5.11 times `2.58 times `6.11 times `3.58 times

6.11 times

A company reports the following income statement and balance sheet information for the current year: Net income $137,130 Interest expense $11,926 Average total assets $2,192,000 Determine the return on total assets. (Round the percentage to one decimal place.)

6.8%

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true? `The company will decrease finished goods by $54,000. `The company will recognize $96,000 gross profit on the balance sheet. `The company will recognize sales on the balance sheet of $150,000. `The company will increase finished goods by $54,000.

The company will decrease finished goods by $54,000.

In horizontal analysis, each item is expressed as a percentage of the: `base year figure. `net income figure. `total assets figure. `retained earnings figure.

base year figure.

Which of the following increases cash? `depreciation expense `borrowing money by issuing a six-month note `acquisition of treasury stock `the declaration of a cash dividend

borrowing money by issuing a six-month note

The last item on the statement of cash flows prior to the schedule of non cash investing and financing activities reports `net cash flow from investing activities. `the change in cash. `cash at the end of the year. `net cash flow from financing activities.

cash at the end of the year.

Which of the following would not be on the statement of cash flows? `cash flows from operating activities `cash flows from investing activities `cash flows from financing activities `cash flows from contingent activities

cash flows from contingent activities

Which of the following can be found on the statement of cash flows? `changes in retained earnings `total changes in stockholders' equity `total assets `cash flows from operating activities

cash flows from operating activities

Which of the following are reported on the income statement as part of cost of goods? `administrative expenses `period costs `cost of goods manufactured `operating expenses

cost of goods manufactured

When a job is completed in a service organization, the job costs are transferred to the: a.finished goods account b.cost of goods sold account c.work in process account d.cost of services account

cost of services account

Which of the following is an example of direct labor cost for a cell phone manufacturer? a.cost of wages of assembly worker b.salary of plant supervisor c.cost of oil lubricants for factory machinery d.cost of phone components

cost of wages of assembly worker

Another term for factory overhead is a.supervisory cost b.surplus c.period cost d.factory burden

factory burden

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as: a.miscellaneous expense b.product costs c.period cost d.factory overhead cost

factory overhead cost

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? `a loss on the sale of equipment `gain on sale of land `depreciation expense `dividends declared and paid

gain on sale of land

All of the following could be considered a direct material except a.glue b.steel c.fabric d.lumber

glue

The percentage analysis of increases and decreases in individual items in comparative financial statements is called `solvency analysis. `profitability analysis. `vertical analysis. `horizontal analysis.

horizontal analysis.

Which of the following are the two main types of cost accounting systems for manufacturing operations? a.job order and general accounting systems b.job order cost and process cost systems c.process cost and general accounting systems d.process cost and replacement cost systems

job order cost and process cost systems

Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory? a.replacement cost system b.job order cost system c.process cost system d.general cost system

job order cost system

The numerator of the return on total assets is `net income plus interest expense. `net income minus preferred dividends. `net income plus tax expense. `net income.

net income plus interest expense.

When using the spreadsheet (work sheet) for the statement of cash flows, indirect method, entries made on the spreadsheet are `recorded in the journal but not posted to the ledger. `recorded in the journal and posted to the ledger. `not recorded in to the journal but are posted to the ledger. `not recorded in the journal or posted to the ledger.

not recorded in the journal or posted to the ledger.

Period costs include `operating costs that are shown on the income statement when products are sold `operating costs that are shown on the income statement in the period in which they are incurred `current assets on the balance sheet `current liabilities on the balance sheet

operating costs that are shown on the income statement in the period in which they are incurred

Costs on the income statement for both a merchandiser and a manufacturer would be: a.direct labor incurred b.direct materials c.operating expenses d.cost of goods manufactured

operating expenses

Horizontal analysis is a technique for evaluating financial statement data `over a period of time. `for one period of time. `as it may appear in the future. `on a certain date.

over a period of time.

Rent expense on a factory building would be treated as a(n) a.product cost b.indirect cost c.period cost d.direct material cost

product cost

Costs that are treated as assets until the product is sold are: a.product costs b.conversion costs c.period costs d.selling expenses

product costs

All of the following are true regarding product costs except: a.product costs consist of direct labor, direct materials, and factory overhead b.product costs can be found in three accounts on the balance sheet c.product costs include sales and administrative expenses d.product costs are found on the balance sheet until they are sold

product costs include sales and administrative expenses

Which of the following is a period cost? a.salary of a security guard for the factory parking lot b.depreciation on factory lunchroom furniture c.salary of telephone receptionist in the sales office d.computer chips used by a computer manufacturer

salary of telephone receptionist in the sales office

In a vertical analysis, the base for cost of goods sold is: `total expenses. `gross profit. `total selling expenses. `sales.

sales

The numerator in calculating the accounts receivable turnover is `accounts receivable at year-end. `total assets. `average accounts receivable. `sales.

sales.

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in `the cash flows from financing activities section. `a separate schedule. `the cash flows from operating activities section. `the cash flows from investing activities section.

the cash flows from operating activities section.

Which of the following should be shown on a statement of cash flows under the financing activities section? `the payment of cash to retire a long-term note `the purchase of a long-term investment in the common stock of another company `the proceeds from the sale of a building `the issuance of a long-term note to acquire land

the payment of cash to retire a long-term note

The amount of time spent by an employee on an individual job are recorded on: a.pay stubs b.employees' earnings records c.time tickets d.in-and-out cards

time tickets

Which of the following would record the labor costs to an individual job? a.a payroll register b.in-and-out cards c.clock cards d.time tickets

time tickets

What is the purpose of the statement of cost of goods manufactured? a.to determine the amounts transferred to finished goods b.to determine the ending work in process inventory c.to determine the ending materials inventory d.All of these choices are correct.

to determine the amounts transferred to finished goods

On a common-sized balance sheet, 100% is: `total liabilities. `total property, plant, and equipment. `total current assets. `total assets.

total assets.

GO OVER #9,10,13,16,18,19 on chapter 14 quiz

true

The current ratio is `used to evaluate a company's liquidity and short-term debt paying ability. `calculated by subtracting current liabilities from current assets. `calculated by dividing current liabilities by current assets. `a solvency measure that indicates the margin of safety for bondholders.

used to evaluate a company's liquidity and short-term debt paying ability.

For a manufacturing business, products that are in the process of being manufactured are referred to as: a.finished goods inventory b.supplies inventory c.direct materials inventory d.work in process inventory

work in process inventory

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from finished goods to cost of goods sold is: a.Finished Goods 375,000 Cost of Goods Sold 375,000 b.Cost of Goods Sold 540,000 Finished Goods 540,000 c.Cost of Goods Sold 375,000 Finished Goods 375,000 d.Finished Goods 540,000 Cost of Goods Sold 540,000

Cost of Goods Sold 375,000 Finished Goods 375,000

During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $32,000. The entry to record the actual factory overhead costs incurred is: a.Factory Overhead 25,000 Wages Payable 25,000 b.Factory Overhead 32,000 Accounts Payable. 32,000 c.Work in Process 25,000 Wages Payable. 25,000 d.Accounts Payable 25,000 Factory Overhead. 25,000

Factory Overhead 25,000 Wages Payable 25,000

Materials purchased on account during the month totaled $190,000. Materials requisitioned and placed in production totaled $165,000. The journal entry to record the material purchase on account is: a.Materials 165,000 Accounts Payable 165,000 b.Materials 190,000 Accounts Payable 190,000 c.Materials 190,000 Cash 190,000 d.Accounts Payable 190,000 Materials 190,000

Materials 190,000 Accounts Payable 190,000

The following information is available for Jase Company: Market price per share of common stock $25.00 Earnings per share on common stock $1.25 Which of the following statements is correct? -The price-earnings ratio is 5% and a share of common stock was selling for 5% more than the amount of earnings per share at the end of the year. -The market price per share and the earnings per share are not statistically related to each other. -The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of the year. -The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year.

The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year.

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? `a decrease in accounts payable `a decrease in inventory `a decrease in accounts receivable `preferred dividends declared and paid

a decrease in accounts payable

A business issues 20-year bonds payable in exchange for preferred stock. This transaction would be reported on the statement of cash flows in `the cash flows from operating activities section. `the cash flows from financing activities section. `the cash flows from investing activities section. `a separate schedule.

a separate schedule.

Flagler Company allocates overhead based on machine hours. It estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead. a. Calculate the predetermined factory overhead rate for the year. Round your answer to the nearest cent. $______________ per machine hour b. What is the amount of applied overhead for the year? $________________ c. What is the amount of under or overapplied overhead for the year? Indicate whether it is over or underapplied. $_______________

a:8.40 b:386,400 c:6,400 overapplied

An example of a period cost is: a.depreciation on factory equipment b.advertising expense c.property taxes on plant facilities d.indirect materials

advertising expense

On the statement of cash flows prepared by the indirect method, the cash flows from operating activities section would include `payments for cash dividends. `receipts from the sale of investments. `receipts from the issuance of capital stock. `amortization of premium on bonds payable.

amortization of premium on bonds payable.

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? `a decrease in accounts payable `dividends paid on common stock `an increase in accrued liabilities `a gain on the sale of land

an increase in accrued liabilities

A building with a book value of $49,821 is sold for $58,086 cash. Using the indirect method, choose how this transaction should be shown on the statement of cash flows. Select the correct answer. -an increase of $49,821 from investing activities -an increase of $58,086 from investing activities and a deduction from net income of $8,265 -an increase of $49,821 from investing activities and an addition to net income of $8,265 -an increase of $58,086 from investing activities

an increase of $58,086 from investing activities and a deduction from net income of $8,265

Product costs: a.are expensed as costs are incurred for direct labor, direct material, and factory overhead b.appear on both the income statement and balance sheet c.appear only on the income statement d.appear only on the balance sheet

appear on both the income statement and balance sheet

In a job order cost accounting system, the entry to record the flow of direct materials into production is to: a.debit Materials, credit Work in Process b.debit Factory Overhead, credit Materials c.debit Work in Process, credit Supplies d.debit Work in Process, credit Materials

debit Work in Process, credit Materials

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is -ignored because it does not affect cash. -deducted from net income. -reported supplementally as a non cash investing and financing activity. -added to net income.

deducted from net income.

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? `dividends declared and paid `an increase in inventory `depreciation expense `a gain on the sale of equipment

depreciation expense

Which of the following is part of factory overhead cost? a.depreciation of sales person's vehicle b.sales commissions c.depreciation of factory equipment and machines d.direct materials used

depreciation of factory equipment and machines