Exam 3 ACCT

Account Amount Common Stock $12,000 Paid in Capital in excess of par, CS $78,000 Bond payable $140,000 Treasury stock $25,000 Retain earnings $120 A. $375,000 B. $235,000 C. $210,000 D. $185,000

D. $185,000

The long-term borrowers are legally obligated to pay dividends to the lenders A. True B. False

B. False

On January 1, 2014, BobCat Inc paid $190,000 to obtain a patent. Stetson expected to use the patent for 5 years before it became technologically obsolete. Based on this information, the amount of amortization expense on the December 31, 2017 income statement? A. $38,000 B. $44,000 C. $152,000 D. $190,000

A. $38,000

Equipment that cost $90,000 and on which $50,000 of accumulated depreciation has been recorded was disposed of for $45,000 cash. Recording this event would include a(n) A. Gain of $5,000 B. Loss of $5,000 C. Decrease in equipment account of $40,000 D. Increase in accumulated depreciation of $45,000

A. Gain of $5,000

Samjet has $250,000 in current assets and $190,000 in current liabilities. FunCat has $50,000 in current assets and $25,000 in current liabilities. FunCat company is probably more able to pay its current liabilities? A. True B. False

A. True

A company's purchased a new car for $40,000. The sale taxes were $4,000. The company logo was placed on the side of the car for $100. The annual car insurance is $2,000, the annual maintenance costs (e.g. changing oil, checking tires) are $1,000. What does the company record as the cost of new car (asset) ? A. $40,000 B. $44,000 C. $44,100 D. $47,100

B. $44,000

All tangible long-term assets are amortized A. True B. False

B. False

How the interest expense is calculated? A. (Principal - Interest rate )× Time B. Principal × Interest rate × Time passed C. Principal × Interest rate ÷ Time passed D. Principal × Interest rate × month ÷ Interest rate

B. Principal × Interest rate × Time passed

Creditors, that assess company's short-term paying ability are the most interested in the following ratio A. Debt to equity ratio. B. Quick (acid test) ratio. C. Return on investment. D. Debt to asset

B. Quick (acid test) ratio.

BobC company issued common stock with par value $2 and preferred stock with stated value of $10.On Jan.1: 1,000 shares of common for $22 per share. On Jun3: 3,000 of preferred stock for $30 per share.On Dec 28: 1,000 of common stock for $27. What is total Equity increase? A. $22,000 B. $90,000 C. $139,000 D. $49,000

C. $139,000

BobCat declared a 3-for-1 stock split for the 220,000 outstanding shares of its $5 par common stock. The stock was currently selling for $320 per share. What is the number of common shares outstanding after the stock split? A. 220,000 B. 880,000 C. 660,000 D. 960,000

C. 660,000

On January 1, 2014, BobCat Inc paid $190,000 to obtain a patent. Stetson expected to use the patent for 5 years before it became technologically obsolete. Based on this information, the amount of the book value (BV) of the patent on the December 31, 2017 balance sheet would be: A. $190,000 B. $152,000 C. $114,000 D. $38,000

D. $38,000

ABC issued bonds with a face value of $100,000 on April 1, 2014. The bonds had a 7 percent stated rate of interest and a six-year term. The bonds were issued at face value. Interest is paid semiannually each October 30 and March 31. Interest expense recorded for 2014 A. $7,000 B. $3,500 C. $2,000 D. $5,250

D. $5,250

The Huntzicker Company reported gross sales of $140,000, sales returns and allowances of $7,000 and sales discounts of $8,000. The company has $40,000 in intangible assets and $70,000 in average total assets. What is the company's asset turnover ratio? A. 4.67 B. 2 C. 1.9 D. 1.79

D. 1.79

Account Amount $ Accounts receivable $55,000 Cash $16,000 Inventory $31,000 Accounts payable $83,000 Equipment $168,000 Land $103,000 Prepaid insurance $13,000 Bond payable $83,000 Common Stock $143,000 Retained earnings $81,000 Salary payable $18,000 What is total current assets? What is total current liabilities? What is total long-term liabilities? What is working capital?

Total Current Assets=$115,000 Total Current Liabilities=$101,000 Total Long-term liabilities= =$85,000 Working Capital=Current Assets-Current Liabilities==$115,000-$101,000=$14,000