ACC 250 Practice Quiz 4

On October​ 1, 2018, Parker Company made a loan to one of its customers. The customer signed a​ 9-month note for​ $150,000 at​ 13%. Calculate the maturity value of the note.​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

$164,625

National Mining Company purchased a​ mine, which holds an estimated​ 40,000 tons of iron​ ore, on January​ 1, 2018, for​ $524,000. The mine is expected to have zero residual value. The business extracted and sold​ 13,500 tons of ore in 2018 and​ 11,800 tons of ore in 2019. What is the depletion expense for​ 2018? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

$176,850

On January​ 1, 2018, Jordan Company acquired a machine for​ $1,090,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be​ $60,000. Calculate the depreciation expense per year using the​ straight-line method.

$206,000

On January​ 1, Five Star Services has the following​ balances: Accounts Receivable​ $26,000 (debit) Bad Debts Expense ​ $0 Five Star Services has the following transactions during​ January: Credit sales of​ $100,000, collections of credit sales of​ $87,000, and​ write-offs of​ $18,000. Five Star Services uses the direct​ write-off method. At the end of​ January, the balance of Accounts Receivable is

$21,000

The following information is from the records of Chicago​ Photography: Accounts​ Receivable, December​ 31, 2019 ​$24,000 (debit) Allowance for Bad​ Debts, December​ 31, 2019 prior to adjustment 700​ (debit) Net credit sales for 2019 ​91,000 Accounts written off as uncollectible during 2019 400 Bad debts expense is estimated by the​ aging-of-receivables method. Management estimates that​ $2,950 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts.

$21,050

Scotland Corporation had net income for 2018 of​ $80,000. Scotland had​ 13,000 shares of common stock outstanding at the beginning of the year and​ 24,000 shares of common stock outstanding at the end of the year. There were​ 12,000 shares of preferred stock outstanding all year. During​ 2018, Scotland declared and paid preferred dividends of​ $21,000. What is​ Scotland's earnings per​ share? (Round the answer to two decimal​ places.)

$3.19

On March​ 31, 2018, Water​ Front, Inc. shows the following data on its balance​ sheet: ​Stockholders' Equity Common​ Stock, $ 1.00$1.00 ​Par, 1 comma 000 comma 0001,000,000 shares authorized 250 comma 000250,000 shares​ issued, 120 comma 000120,000 shares outstanding $ 250 comma 000$250,000 Paidminus−In Capital in Excess of Parlong dash—Common 2 comma 510 comma 0002,510,000 Retained Earnings 4 comma 710 comma 0004,710,000 Treasury​ stock, 14 comma 00014,000 shares at $ 27.00$27.00 ​ (378 comma 000378,000​) Total​ Stockholder's Equity $ 7 comma 092 comma 000$7,092,000 Assume that Water Front sells 900900 shares of treasury stock at $ 43.00$43.00 per share. What is total​ stockholders' equity after this​ transaction?

$7,130,700

Gulfcoast Company purchased a van on January​ 1, 2019, for​ $930,000. Estimated life of the van was five​ years, and its estimated residual value was​ $95,000. Gulfcoast uses the​ straight-line method of depreciation. Calculate the book value of the van at the end of 2019.

$763,000

What is the maturity value of a​ 6-month, 13% note for​ $80,000? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

$85,200

Dodgers​ Company's beginning and ending total assets in the year 2019 were $18,000,000 and $22,000,000​, respectively. Its asset turnover ratio for the year was calculated to be 1.7 times. Calculate the amount of net sales for the year 2019.

34,000,000

Which of the following is included in the entry to record the issuance of​ 14,000 shares of​ $7 par value common stock at​ $21 per share for​ cash?

Cash is debited for​ $294,000.

On November​ 1, 2018,​ Uno, Inc. declared a dividend of $3.50 per share.​ Uno, Inc. has 29,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of the​ dividend?

Debit Cash Dividends $101,500​, and credit Dividends Payable—Common $101,500.

On November​ 1, 2018,​ Nada, Inc. declared a dividend of $4.25 per share on common stock.​ Nada, Inc. has 26,000 shares of common stock outstanding and no preferred stock. The date of record is November​ 15, and the payment date is November​ 30, 2018. Which of the following is the journal entry needed on November​ 30, 2018?

Debit Dividends Payablelong dash—Common $110,500​, and credit Cash $110,500.

On November​ 1, 2018,​ Nada, Inc. declared a dividend of $4.00 per share on common stock.​ Nada, Inc. has 23,000 shares of common stock outstanding and no preferred stock. The date of record is November​ 15, and the payment date is November​ 30, 2018. Which of the following is the journal entry needed on November​ 30, 2018?

Debit Dividends Payablelong dash—Common $92,000​, and credit Cash $92,000.

Which of the following statements is​ incorrect?

Depreciation is recorded on all plant assets

A company may purchase treasury stock to increase net assets by buying high and selling low.

False

Earnings per share is calculated as net income plus preferred dividends divided by the average number of common shares outstanding.

False

Which of the following statements about franchises is​ correct?

Franchises are privileges granted by a business to sell goods or services under specified conditions.

Which of the following is true of the balance sheet presentation of the Allowance for Bad​ Debts?

It is shown as a contra account related to accounts receivable.

Which of the following is a characteristic of a plant​ asset, such as a​ building?

It is used in the operations of a business.

Which of the following is true of the​ acid-test ratio?

It measures a​ company's ability to pay its current liabilities.

All City​ Realty, Inc. issued 15,000 shares of $2.00 stated value common stock for $19.00 per share. The journal entry to record this transaction includes a credit to​ ________.

Paidminus−In Capital in Excess of Stated long dash— Common for $ $255,000

Which of the following is a true​ statement?

Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.

City Auto Parts recently traded in store fixtures. The exchange had commercial substance. The old fixtures had a cost of $50,000 and accumulated depreciation of $18,000. City paid $105,000 for the new store fixtures. These new fixtures had a market value of $110,000. There is a loss of $27,000 on this exchange.

True

Double taxation occurs when corporations make dividend payments to stockholders.

True

Higher​ start-up costs and expensive government regulations are disadvantages of corporations.

True

Treasury stock is a​ corporation's own stock that it has previously issued and later reacquired.

True

When a corporation sells 5,000 shares of $14.00 par value common stock for $158,000​, Common Stock is credited for $70,000.

True

When a corporation sells 6,000 shares of $15.00 par value common stock for $155,000​, Common Stock is credited for $90,000.

True

When a corporation sells​ 9,000 shares of​ $12 par value common stock for​ $159,000, Common Stock is credited for​ $108,000.

True

Which of the following is included in the entry to record the issuance of​ 14,000 shares of​ $7 par value common stock at​ $21 per share for​ cash?

Which of the following is included in the entry to record the issuance of​ 14,000 shares of​ $7 par value common stock at​ $21 per share for​ cash?

Under the direct​ write-off method, the entry to write off an uncollectible account will include​ ________.

a debit to Bad Debts Expense account

A machine that was purchased for​ $110,000 has accumulated depreciation of​ $70,000. The business exchanges the machine for a new one. The new machine has a market value of​ $140,000, and the business pays​ $110,000 cash. Assume the exchange has commercial substance. This exchange results in a​ ________.

a loss of $10,000

A photocopier cost​ $104,000 when new and has accumulated depreciation of​ $95,000. If the business discards this plant​ asset, the result is​ ________.

a loss of $9,000

Outstanding stock represents shares of stock that​ ________.

are held by the stockholders

Which of the following is included in the entry to record the issuance of 7,000 shares of $10.00 par value common stock at $15.00 per share for​ cash?

ash is debited for $105,000.

Earnings per share is calculated as net income plus preferred dividends divided by the average number of common shares outstanding.

can be​ discarded, sold, or exchanged for another plant asset

Pumpkin Corporation issued​ 10,000 shares of common stock on January​ 1, 2018. The stock has no par value and was issued at​ $17 per share. The journal entry for this transaction includes a​ ________.

debit to Cash for​ $170,000 and a credit to Common Stocklong dash—​No-Par Value for​ $170,000

Which of the following is included in the category of other​ receivables?

interest recievable

When using the allowance​ method, the​ write-off of a receivable​ ________.

reduces the amount of the Allowance for Bad Debts account

The two methods of accounting for uncollectible accounts receivable are​ ________.

the allowance method and the direct​ write-off method

Jayson Enterprises uses the allowance method to account for uncollectible receivables. When an uncollectible account is written​ off, ________.

the write off has no effect on net income

Two methods of estimating uncollectible receivables are​ ________.

the​ aging-of-accounts-receivable method and the​ percent-of-sales method

An asset is considered to be obsolete​ ________.

when a newer asset can perform the job more efficiently than the old asset can

A coal mine cost​ $1,001,000 and is estimated to hold​ 58,000 tons of coal. There is no residual value. During the first year of​ operations, 6,000 tons are extracted and sold. Calculate depletion expense for the first year.​ (Round any intermediate calculations to the nearest​ cent.)

​$103,560

On August​ 14, Park Avenue Bank lent​ $210,000 to City Coffee Shop on a 75​ day, 4% note. What is the maturity value of the​ note? ​ (Use a 365minus−day year. Do not round intermediate​ calculations, and round your final answer to the nearest​ dollar.)

​$211,726

Accounts Receivable has a balance of​ $33,000, and the Allowance for Bad Debts has a credit balance of​ $3,300. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a​ $2,300 account receivable is written​ off?

​$29,700; $29,700

Dodgers​ Company's beginning and ending total assets in the year 2019 were​ $19,700,000 and​ $22,300,000, respectively. Its asset turnover ratio for the year was calculated to be 1.9 times. Calculate the amount of net sales for the year 2019.

​$39,900,000

On March​ 31, 2018, Water​ Front, Inc. shows the following data on its balance​ sheet: ​Stockholders' Equity Common​ Stock, $1​ Par, 1,180,000 shares authorized ​240,000 shares​ issued, 230,000 shares outstanding ​$240,000 ​Paid-In Capital in Excess of Parlong dash—Common ​2,560,000 Retained Earnings ​4,790,000 Treasury​ stock, 15,000 shares at​ $40 ​ (600,000) Total​ Stockholder's Equity ​$6,990,000 Assume that Water Front sells​ 1,500 shares of treasury stock at​ $33 per share. What is total​ stockholders' equity after this ​ transaction?

​$7,039,500