ACG Final Part 2

An analysis and aging of the accounts receivable of Raja Company at December 31 reveal the following data before year-end adjusting entries: Accounts receivable, $1,200,000; Allowance for doubtful accounts balance before adjustment (credit balance), $24,000; Amounts expected to become uncollectible, $115,000. How much is the cash realizable value (i.e., net realizable value) of the accounts receivable at December 31, after adjusting entries?

$1,085,000

Lance Company has the following inventory units and costs: Units Unit Cost Inventory, Jan. 1 8,000 $11 Purchase, June 19 13,000 12 Purchase, Nov. 8 5,000 13 If 9,000 units are on hand at December 31, what is the cost of the ending inventory under LIFO using a periodic inventory system?

$100,000

Schneider Trucking Inc. purchased a new truck on January 1 of the current year for $200,000. The truck's expected useful life is 4 years and its salvage value is estimated at $25,000. What is the depreciation expense for the current year using the double-declining balance method?

$100,000

Welch Company's average total assets is $250,000, average total equity is $150,000, and net sales is $80,000. Its return on assets is 10%. What was the company's net income?

$25,000

Welch Company's average total assets is $240,000, average total equity is $150,000, and net sales is $60,000. Its return on assets is 12%. What was the company's net income?

$28,800

A $500,000 bond is redemption at 96 when the carrying value of the bond is $483,000. Which of the following is one effect of recording the redemption?

$3000 of gain

A company has the following asset account balances: Buildings and equipment, $6,200,000; Accumulated depreciation, $1,800,000; Patents, $950,000; Inventory, $1,000,000; and Goodwill, $4,000,000. How much will be reported on the balance sheet under property, plant & equipment?

$4,400,000

On October 1, Year 1, Best Buy purchased an asset for $10,000, with a $2,000 estimated salvage value, and a 5-year useful life. How much is the year 1 depreciation expense using the straight-line method?

$400

Danielle Inc. has 10,000 shares of 6%, $50 par, non-cumulative preferred stock and 75,000 shares of $4 par common stock outstanding. Both the common stock and the preferred stock have been outstanding since the company began last year. No dividends were paid last year. The board of directors declared a $75,000 dividend this year. What amount of the total dividend will be paid to common stockholders?

$45,000

In the current year, Pierce Company incurred $140,000 of research and development costs in its laboratory to develop a new product. It also spent $30,000 in legal fees for a patent on that new product. Later in the current year, Pierce paid $18,000 for legal fees in a successful defense of that patent. What is the total amount that should be debited to the company's Patents account in the current year?

$48,000

An analysis and aging of the accounts receivable of Raja Company at December 31 reveal the following data before year-end adjusting entries: Accounts receivable, $800,000; Allowance for doubtful accounts balance before adjustment (credit balance), $12,000; Amounts expected to become uncollectible, $65,000. How much is the cash realizable value (i.e., net realizable value) of the accounts receivable at December 31, after adjusting entries?

$735,000

Cost of goods purchased is $500,000, ending inventory is $20,000, and cost of goods sold is $560,000. How much is beginning inventory?

$80,000

A company's average total assets are $200,000, depreciation expense is $10,000, and accumulated depreciation is $60,000. Net income is $1,000,000. Net sales total $250,000. What is the asset turnover?

1.25

Oahu Industries' average total assets for the year are $4,000,000, its average total stockholders' equity for the year are $3,000,000, its net income is $800,000, its gross margin is $2,000,000, and its net sales are $10,000,000. What is Oahu's return on assets?

20%

In a recent year, Sherwood Day Corporation had sales of $500,000, net income of $200,000, interest expense of $40,000, and tax expense of $30,000. What was Day Corporation's times interest earned for the year?

6.75

Black Raptor Inc. has retained earnings of $500,000 and total stockholders' equity of $2,000,000. It has 100,000 shares of $8 par value common stock outstanding, which is currently selling for $30 per share. What will occur if Black Raptor declares a 10% stock dividend on its common stock? A. Retained earnings will decrease by $300,000 and total paid in capital will increase by $300,000 B. Retained earnings will decrease by $120,000 and total stockholders' equity will increase by $120,000 C. Retained earnings will decrease by $300,000 and total stockholders' equity will increase by $300,000 D. Net income will decrease by $80,000

A

For which of the following might a bank issue a debit memorandum to a depositor's account? A. Monthly service charges B. Interest earned C. Deposits in transit D. Collection of a note receivable E. Outstanding checks

A

Nichols Corporation declared a cash dividend of $1.20 per share on 40,000 shares of common stock on April 15. The dividend is to be paid one month later on May 15 to stockholders of record on April 30. The correct entry to be recorded on the date of declaration of April 15 will include a A. debit to the Cash Dividends account and a credit to the Dividends Payable account B. debit to the Cash Dividends account and a credit to the Cash account C. debit to the Dividends account and a credit to the Cash Dividends Payable account D. debit to the Dividends Payable account and a credit to the Cash account

A

In October, Oliver Company sold merchandise on account to Mr. Reed for $100 with terms 2/10, n/30. Oliver Company uses the percentage of receivables basis for estimating uncollectible accounts on December 31. On May 25, Oliver Company determines that it will not collect the amount due from Mr. Reed. Prepare the journal entry to record the write-off on May 25.

Allowance for Doubtful Accounts 100 Accounts Receivable 100

Handel Enterprises issued 4,000 bonds with a face value of $1,000 each at 101. The journal entry to record the issuance includes A. a credit to Discount on Bonds Payable for $40,000 B. a credit to Premiums on Bonds Payable for $40,000 C. A debit to Premiums on Bonds Payable for $40,000 D. A debit to Discount on Bonds Payable for $40,000

B

Which of the following is not a typical current liability? A. FICA taxes payable B. Bonds payable C. Unearned revenue D. Salaries and wages payable E. Sales taxes payable

B

Which one of the following is not a control procedure used for over-the-counter receipts? A. Providing the customers with an itemized receipt B. All of these are control procedures used for over the counter receipts C. None of these D. A cash register's tape is locked in the register and only a supervisor can access it

B

Which statement about stock dividends is true? A. All of these are true B. Stock dividends do not change total stockholders' equity C. Stock dividends do not require a journal entry D. Stock dividends reduce a company's cash balance E. Stock dividends increase total stockholders' equity by the par value of the stock distributed

B

For which of the following might a bank issue a debit memorandum to a depositor's account? A. Deposits in transit B. Collection of a note receivable C. NSF check D. Outstanding checks E. Interest earned

C

Good Stuff Retailers accepted $50,000 of Citibank Visa credit card charges for merchandise sold on July 1. Citibank charges 4% for its credit card use. What should Good Stuff Retailers debit as a result of this transaction? A. Accounts Receivable for $50,000 B. Accounts Receivable for $48,000 and Service Charge Expense for $2000 C. Cash for $48,00 and Service Charge Expense for $2000 D. Cash for $50,000 and Service Charge Expense for $2000 E. Cash for $50,000

C

On January 1, Pierce Corporation issues $500,000, 5-year, 12% bonds at 96 with interest payable on January 1. Which of the following is one part of the entry on December 31 to record accrued bond interest and the amortization of the bond discount using the straight-line method? A. A debit to Interest Expense for $57,600 B. A credit to Bonds Payable for $2,000 C. A credit to Discount on Bonds Payable for $4000 D. A credit to Discount on Bonds Payable for $2000 E. A debit to Interest Expense for $60,000

C

When a note receivable is paid on time and no interest has been previously accrued, what will the journal entry to record the transaction contain? A. One debit and one credit B. Two debits and one credit C. Two credits and one debit

C

Which of the following statements is true? A. Trademarks are amortized over a period of 20 years B. Research and development costs are usually added to the cost of an asset rather than expensed when incurred. C. The amortization period of a patent is the lesser of its useful life or 20 years, whichever is shorter. D. If an intangible asset has an unspecified or indeterminate life, it should be amortized.

C

A corporation issued 1,000 shares of its $2.00 par value common stock for $10.00 per share and later repurchased 100 of those shares for $12.00 per share. Which of the following will be debited to record the repurchase of the shares? A. Cash for $12,000 B. Common Stock for $1200 C. Retained Earnings for $1200 D. Treasury Stock for $1200 E. Treasury Stock for 200

D

A permanent decline in the market value of an asset is called A. a disposal B. a write-down C. a depreciation D. an impairment E. a capital expenditure

D

When an uncollectible account is recovered after it has been written off, which of the following journal entries will be recorded first? A. Debit Accounts Receivable and credit Allowance for Doubtful Accounts B. Debit Cash and Credit Allowance for Doubtful Accounts C. Debit Allowance for Doubtful Accounts and credit Accounts Receivable D. Debit Accounts Receivable and credit Bad Debt Expense

D

Which internal control principle is important in a control system for handling cash receipts? A. Independent internal verification B. None of these C. Physical controls D. All of these E. Segregation of duties

D

Which of the following accounts is listed first in the stockholders' equity section of the balance sheet? A. Common stock B. Treasury stock C. Retained earnings D. Preferred stock if preferred stock had been issued. Otherwise common stock

D

Kant Corporation retires its $100,000 face value bonds at 104 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $102,745. Which of the following is part of the entry to record the bond redemption? A. a credit to Cash for $100,000 B. a credit of $1,255 to Gain on Bond Redemption C. A debit of $4,000 to Premium on Bonds Payable D. A credit of $2,745 to Loss on Bond Redemptioni E. A debit of $2,745 to Premium on Bonds Payable

E

Where is common stock listed in the stockholders' equity section of the balance sheet? A. Before preferred stock B. as an asset C. After retained earnings D. After treasury stock E. As part of pain-in captial

E

Which of the following is an intangible asset that is not amortized? A. All of these are amortized. B. Research & Development C. Patent D. Copyright E. Trademark

E

Which one of the following is not one of the five basic issues in accounting for notes receivable? A. Computing the present value of notes receivable B. Disposing of notes receivable C. Valuing notes receivable D. Recognizing notes receivable E. Realizing notes receivable

E

A 120-day note dated March 5, would mature on

July 3

Which of the following is the correct adjusting journal entry for the bank account holder when notified of a bank debit memorandum for a monthly service charge of $30?

Miscellaneous Expense 30 Cash 30