ACC201 Final

A company purchased a patent for $100,000 at the beginning of the current year which it believes has an expected useful life of 5 years. Fortunately, the patent has a legal life of 20 years. How much amortization expense should be recorded in the current year? a.$20,000 b.$5,000 c.$100,000 d.$0

a

Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2019. The note is due on April 30, 2020. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2019 and 2020? a. $1,000 and $2,000 b. $0 and $6,000 c. $1,000 and $5,000 d. $2,000 and $1,000

a

Cash $234,000 Accounts Payable $97,000 Inventories $121,000 Notes Payable (due 2018) $211,000 Land $453,000 Accounts Receivable $46,000 Calculate Current Assets. a.$401,000 b.$854,000 c.$709,000 d.$498,000

a

Cash flows from acquiring and selling products are classified as a. operating activities. b .investing activities. c. distribution activities. d. financing activities.

a

Each of the following items is considered a cash equivalent except a. a 180-day note issued by a local government. b. a 30-day certificate of deposit. c.60-day corporate commercial paper. d. a 75-day U.S. Treasury bill.

a

Eli Company sells novelty items and offers terms of 1/10, n/30 to credit customers. One customer, Faulkner, Inc., purchased 100 Sweet-16 party decor packs with a list price of $20 each on March 5, 2019. If the customer pays the amount of the invoice for its purchase on March 14, 2019, how much cash will Eli Company receive? a.$1,980 b.$2,000 c.$1,800 d.$1,400

a

If a company has assets of $5,000,000, liabilities of $3,000,000, and retained earnings of $1,200,000, how much is total stockholders' equity? a.$2,000,000 b.$3,800,000 c.$1,800,000 d.$800,000

a

If the stated interest rate is 12% per year, but it is compounded semiannually, then the adjusted rate used for present or future value calculations will be a.6% per 6-month period. b.12% per year. c.1% per 6-month period. d.3% per quarter.

a

On January 1, a company sold a machine for $5,000 that it had used for several years. The machine cost $11,000, and had accumulated depreciation of $4,500 at the time of sale. What gain or loss will be reported on the income statement for the sale of the machine for the year ended December 31? a. loss of $1,500 b. gain of $1,500 c. gain of $5,000 d. loss of $6,500

a

On May 1, a company borrowed $30,000 from the First National Bank on a 1-year, 6% note. Assuming the company keeps its records on a calendar year basis, an entry is needed on December 31st to increase a. interest payable by $1,200. b. interest expense by $600. c. interest payable by $900. d. interest expense by $1,800.

a

Question Content Area If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working capital. a.$1,600,000 b.$2,100,000 c.$500,000 d.$2,600,000

a

Sales: $780,000 Cost of Sales: $700,000 Selling, general & administrative expense: $20,000 Other Expense: $15,000 Dividends: $5,000 Income Tax Expense: $12,500 What amount will be reported as Retained Earnings on the Balance Sheet at December 31, 2019, assuming this is the first year of operations? a.$27,500 b.$22,500 c.$42,500 d. Not enough information is provided.

a

Suppose a corporation issues 5,000 shares of $1 par common stock for $30 per share. In addition to the increase in cash, what effect does this transaction have on the accounting equation? a. Paid-in capital in excess of par increases $145,000. b. Common stock increases $150,000. c. Retained earnings increases $150,000. d. Gain on stock issuance increases $145,000.

a

This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2019, and was used 27,000 hours in 2019 and 26,000 hours in 2020. If the company uses the straight-line method of depreciation, what is the book value at December 31, 2021? a.$6,000 b.$8,000 c.$10,000 d.$4,000

a

Tom liquidates an investment, and his proceeds will be received in 8 annual payments of $10,000 each with interest computed at 7%. What is the Present Value of this Annuity? a.$59,713.00 b.$89,228.00 c.$17,181.90 d.$5,820.10

a

Which of the following best describes the term "retained earnings" of a company? a. The accumulated net income of a company that has not been distributed to owners in the form of dividends. b. The amount of claim that the owners have on the assets of the company. c. The amount of total profits earned by a company since it began operations. d. The future economic resources of a company.

a

Which of the following will not cause a trial balance to be out of balance? a. A credit entry is posted to the wrong account, but still as a credit. b. A debit entry is posted as a credit. c. An account is accidentally omitted from the trial balance. d. The balance for the account is incorrectly computed.

a

A company needs to record 6 months of accrued interest on a 4-year, 12%, $12,000 promissory note payable. How much interest expense should be accrued? a.$1,440 b.$720 c.$1,080 d.$2,160

b

A company receiving payment of a $20,000 accounts receivable within 10 days with terms of 2/10, n/30, would record a sales discount of: a.(100% - 2%) x $20,000 b.2% of $20,000 c.10% of $20,000 d.(100% - 10%) x $20,000

b

All of the following accounts have normal credit balances except a. unearned revenue. b. inventory. c. common stock. d. accounts payable.

b

Cash $75,000 Accounts Receivable $250,000 Property, plant & equipment $350,000 Long-term debt $200,000 Capital stock $500,000 Accounts payable $100,000 Retained earnings ?Inventory $175,000 What amount should the company report on its Balance Sheet for Total Assets? a.$550,000 b.$850,000 c.$950,000 d.$775,000

b

Cash flows from acquiring and disposing of long-term assets are classified as a. operating activities. b. investing activities. c. purchasing activities d. financing activities.

b

Cozy Corporation purchased supplies at a cost of $15,000 during the year. At January 1, supplies on hand were $5,000. At December 31, supplies on hand are $2,000. Calculate supplies expense for the year. a.$15,000 b.$18,000 c.$13,000 d.$2,000

b

Equipment with a residual value of $50,000 at the end of 10 years was acquired at the beginning of 2019 for $500,000. Assuming the use of the straight-line depreciation method, the journal entry to record depreciation expense for 2021 will have a debit to a. Depreciation Expense and a credit to Equipment for $45,000. b. Depreciation Expense and a credit to Accumulated Depreciation for $45,000. c. Accumulated Depreciation and a credit to Equipment for $50,000. d. Depreciation Expense and a credit to Accumulated Depreciation for $50,000.

b

Eric is considering buying a car. He can either purchase the car outright or make 5 annual payments of $10,000 at the end of each year. If the interest rate is 7%, how much is the outright purchase price? a.$14,025.50 b.$41,002.00 c.$57,863.70 d.$7,129.90

b

Purchase Price $500,000 Excavation Costs $50,000 Razing Old Building $12,500 Broker Fees $10,000 Cost of a Parking Lot $25,000 What is the cost of the land? a.$550,000 b.$572,500 c.$562,500 d.$597,500

b

Sales: $780,000 Cost of Sales: $700,000 Selling, general & administrative expense: $20,000 Other Expense: $15,000 Dividends: $5,000 Income Tax Expense: $12,500 What is the company's Net Income for the current year? a.$22,500 b.$32,500 c.$42,500 d.$80,000

b

The College Store accepts MasterCard for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. MasterCard charges a 1.55% collection fee. Credit card drafts totaling $10,000 are deposited during August. Recording the sales and deposits will result in an increase in a. Cash for $10,000 b. Service Charge Expense for $155 c. Sales for $ 9,854 d. Accounts Receivable for $9,854

b

The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest. What is the total amount of interest the company will receive when the note is collected? a.$150 b.$450 c.$300 d.$1,800

b

The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest. At the maturity date, the customer pays the amount due for the note and interest. What entry is required on the books of Accent Flooring on the maturity date assuming that none of the interest had already been recognized? a. Increase Cash by $20,450, increase Notes Receivable by $20,000, and increase Interest Revenue by $450 b. Increase Cash by $20,450, increase Interest Revenue by $450, and decrease Notes Receivable by $20,000 c. Increase Cash and decrease Notes Receivable by $20,000 d. No entry is required; the customer pays the amount due to Accent Flooring.

b

The total amount of interest that will be paid on a 5-year, $90,000 note payable at 11% simple annual interest is? a.$9,900 b.$49,500 c.$139,500 d.$1,980

b

This company was incorporated as a new business on January 1, 2019. The company is authorized to issue 50,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par, cumulative, participating preferred stock. On January 1, 2019, the company issued 8,000 shares of the common stock for $15 per share and 2,000 share of the preferred stock for $30 per share. Net income for the year ended December 31, 2019 was $375,000. What is the amount of the company's total capital stock at December 31, 2019? a.$120,000 b.$180,000 c.$60,000 d.$350,000

b

Which of the following is true for a corporation that issues 1,000 shares of $2 par common stock at $5 per share? a. The common stock account will increase by $5,000. b. Total stockholders' equity will increase by $5,000. c.$2 per share is the maximum selling price for these shares of stock. d. The per share dividend amount on these shares is $2.

b

Which of the following statements best describes the effects of recognizing revenue earned by a business entity? a. Assets increase and stockholders' equity decreases when either cash or credit sales are made. b. Assets and stockholders' equity increase when either cash or credit sales are made. c. Stockholders' equity increases only when credit sales are made. d. Assets increase only when cash sales are collected.

b

Which one of the following correctly represents one of the basic financial statement models? a. Assets − Liabilities = Net Income b. Beginning Retained Earnings + Net Income − Dividends = Ending Retained Earnings c. Revenues + Expenses = Net Income d. Assets + Liabilities = Total Assets

b

You just won the lottery and have elected to receive 10 annual payments instead of the lump sum of $74,818.59. Calculate the amount of your annual payment assuming a 6% interest rate. a.$17,178.90 b.$10,165.44 c.$18,000.00 d.$10,832.11

b

A manufacturing company's weekly payroll is $80,000 for a 5-day work week beginning each Monday and ending each Friday. The last time salaries and wages were recorded was Friday, December 26. What adjustment is needed on December 31, the last day of the company's fiscal period? a. Decrease wages payable by $48,000. b. Decrease cash by $48,000. c. Increase wages expense by $48,000. d. No adjustment is necessary since the next payday will not occur until the following year.

c

Cash flows from borrowing and paying off a 90-day bank loan are classified as a. purchasing activities. b. operating activities. c. financing activities. d. investing activities.

c

Failure to record the earned portion of unearned revenue would result in which of the following? a. Stockholders' equity being overstated. b. Total assets being understated. c. Net income being understated. d. No effect on total liabilities.

c

Question Content Area A corporation issued $150,000 of 10-year bonds at the stated rate of 8%, with interest payable semiannually. How much cash will the bond investors receive at the end of the first interest period? a.$3,000 b.$12,000 c.$6,000 d.$24,000

c

Question Content Area Coffski, Inc. sold merchandise to a customer on credit. The invoice amount was $1,000; the invoice date was June 10th; credit terms were 1/10, n/30. Which of the following statements is true? a. The customer must pay a $10 penalty if payment is made after July 9th. b. The customer can take a 10% discount if the invoice is paid by June 30th. c. The customer should pay $1,000 if the invoice is paid on July 9th. d. The customer must pay $1,010 if payment is made after June 20th

c

Question Content Area When using the indirect method to determine operating cash flows, how is the issuance of stock to retire a long-term debt shown on a statement of cash flows? a. not reported on the statement of cash flows b. financing activity c. noncash investing or financing activity d. investing activity e. operating activity

c

Question Content Area Which of the following are Noncurrent assets? a. accounts receivable b. inventories c. machinery and equipment d. unearned revenues

c

Revenues $2,500,000 Expenses $2,000,000 Retained Earnings at December 31, 2018 $100,000 Retained Earnings at December 31, 2019 $450,000 How much was paid out in dividends in 2019? a.$500,000 b.$250,000 c.$150,000 d.$350,000

c

The purchase of office equipment on credit has what effect on the accounting equation? a. assets and stockholders' equity decrease b. assets and liabilities decrease c. assets and liabilities increase d. liabilities increase and stockholders' equity decreases

c

Total stockholders' equity includes $50,000 of common stock with a stated value of $0.50, and 5,000 shares of treasury stock with a total cost of $25,000. How many total shares are outstanding? a.105,000 b.100,000 c.95,000 d.150,000

c

A bond issuing at 101.25 means that the bond a. sold at a discount. b. sold for $101.25. c. stated rate is lower than the market rate of interest. d. sold for $1,012.50.

d

A customer's check for $25 that had been deposited into the company's checking account the previous month was returned stamped "NSF" by the bank. Which of the following journal entries is required? a. Cash25 Accounts Payable 25 b. Cash25 Accounts Receivable 25 c. Account Receivable 25Petty Cash 25 d. Accounts Receivable 25 Cash 25

d

A graphics design company issued bonds in the amount of $1,000,000 with a stated interest rate of 8%. If the interest is paid semiannually and the bonds are due in 10 years, what would be the total amount of interest paid over the life of the bonds? a.$80,000 b.$1,000,000 c.$400,000 d.$800,000

d

Bank statement balance $10,700 Unadjusted cash balance from the company's records ? Deposit in transit $2,100 Outstanding checks $1,200 Bank service charges $300 Interest earned on the bank account $100 Customer's NSF check returned by the bank $400 As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books? a.$100 decrease b.$400 decrease c.$300 decrease d.$600 decrease

d

Company's balance according to the general ledger $15,000 Outstanding checks $2,500 Bank service charge$ 15 A customer's NSF check returned by the bank $100 What is the company's adjusted cash balance at April 30th? a.$12,385 b.$12,500 c.$17,385 d.$14,885

d

If the end-of-year supplies on hand totaled $200, and purchases totaled $300, and supplies on hand at the beginning of the year amounted to $100, how much will be reported as supplies expense for the current year? a.$300 b.$400 c.$600 d.$200

d

Mark is planning on making an investment in a new computer system. He wants to know how much he must invest to have $9,000 in 4 years if the interest rate is 5% per year? a.$2,479.41 b.$7,826.83 c.$10,939.59 d.$7,404.30

d

Net income $100,000 Dividends $6,000 Retained earnings at December 31, 2019 $120,000 What was the balance of Retained Earnings at January 1, 2019? a.$21,000 b.$106,000 c.$214,000 d.$26,000

d

On January 1, 2019, a company reported assets of $1,000,000 and liabilities of $600,000. During 2019, assets decreased by $100,000 and Stockholders' Equity decreased $200,000. What is the amount of liabilities at December 31, 2019? a.$200,000 b.$600,000 c.$500,000 d.$700,000

d

Question Content Area Manatee Manufacturing sells a piece of equipment to make room for new machinery. Manatee will receive the sales price of $50,000 at the end of 4 years. Assuming interest at a rate of 6% per year, the Present Value of this future cash flow is how much? a.$39,515.50 b.$173,255.50 c.$63,124.00 d.$39,604.50

d

The resources used to earn revenues during a period are called a. revenues. b. net income. c. dividends. d. expenses.

d

This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31. Which of the following statements is true regarding the entry to record wages and the related liabilities? a. Social security tax payable will be debited in the amount of $620. b. Federal income taxes payable will be credited in the amount of $2,100. c. FICA tax expense will be debited in the amount of $765. d. Medicare tax payable will be credited in the amount of $145.

d

This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2019, and was used 27,000 hours in 2019 and 26,000 hours in 2020. If the company uses the double-declining-balance depreciation method, what amount is the depreciation expense for 2020? a.$2,000 b.$4,800 c.$1,728 d.$2,880

d

This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2019, and was used 27,000 hours in 2019 and 26,000 hours in 2020. If the company uses the units-of-production method, what is the depreciation rate per hour for the equipment? a.$1.00 b.$0.12 c.$1.10 d.$0.10

d

Under accrual accounting when is revenue recognized? a. When cash is received, and expenses when the costs are incurred. b. When earned, and expenses when cash is paid. c. When cash is received, and expenses when cash is paid. d. When earned, and expenses when incurred.

d

Which of the following adjusting entries involves the cash account? a. Deferred Revenues b. Deferred Liabilities c. Accrued Expenses d. None of these choices are correct.

d

Which of the following items would be added to the company's cash balance on a bank reconciliation? a. outstanding checks b. bank service charges c. deposits in transit d. interest earned on the bank account

d

Which one of the following financial statements show the end of the year cash balance for a business entity? a. Income Statement and Statement of Retained Earnings b. Statement of Retained Earnings and Statement of Cash Flows c. Balance Sheet and Statement of Retained Earnings d. Balance Sheet and Statement of Cash Flows

d

Which set of items below are current assets? a. Net Income, Cash, Office Supplies, and Inventory b. Cash, Accounts Receivable, Capital Stock, and Sales c. Accounts Receivable, Net Income, Inventory, and Dividends d. Cash, Accounts Receivable, Inventory, and Office Supplies

d