Accounting 201 Final Exam

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. $200 b. $600 c. $400 d. $300

a. $200

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

a. inventory

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? 2019 2020 a. $0 $6,000 b. $2,000 $1,000 c. $1,000 $2,000 d. $1,000 $5,000

c. $1,000 $2,000

A company reported the following information: 2020 2019 Accounts receivable $50,000 $65,000 Inventories 43,000 40,000 Accounts payable 29,000 39,000 Net income 100,000 Depreciation expense 11,000 If the indirect method is used to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash inflow from operating activities for 2020? a. $111,000 b. $109,000 c. $113,000 d. $92,000

c. $113,000

While preparing the April 30th bank reconciliation, the accountant identified the following items: 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. $12,500 b. $17,385 c. $14,885 d. $12,385

c. $14,885

A company purchased land and incurred the following costs: 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. $562,500 b. $597,500 c. $572,500 d. $550,000

c. $572,500

Dreammaker KitchensThe following information relates to the company's November bank reconciliation: 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 Refer to Dreammaker Kitchens. 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. $300 decrease b. $100 decrease c. $600 decrease d. $400 decrease

c. $600 decrease

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

c. Net income being understated.

The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $2,000. What adjusting entry is necessary at January 31? a. Supplies Expense. 24,000 Supplies 24,000 b. Supplies Expense. 22,000 Supplies 20,000 Accounts Payable 2,000 c. Supplies Expense. 30,000 Supplies 30,000 d. Supplies 22,000 Accounts Payable 22,000

c. Supplies Expense. 30,000 Supplies 30,000

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

d. None of these choices are correct.

Klump Co.Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June. June. 1 On hand, 50 units at $18.00 each $900.00 4 Purchased 115 units at $18.20 each $2,093.00 5 Sold 100 units 10Purchased 75 units at $18.25 each $1,368.75 24 Sold 50 units Total cost of goods available for sale $4,361.75 30 On hand, 90 units Refer to the information provided for Klump Co. If the company uses the FIFO inventory costing method, the amount of ending inventory reported on the balance sheet is: a. $1,641.75 b. $1,183.00 c. $1,810.00 d. $2,720.00

a. $1,641.75

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. $59,713.00

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

a. sold for $1,012.50.

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

b. $1,600,000

Fabian WoodworksThis 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. Refer to Fabian Woodworks. 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. $4,000 d. $10,000

a. $6,000

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. $3,800,000 b. $2,000,000 c. $1,800,000 d. $800,000

b. $2,000,000

Klump Co.Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June. June. 1 On hand, 50 units at $18.00 each $900.00 4 Purchased 115 units at $18.20 each $2,093.00 5 Sold 100 units 10Purchased 75 units at $18.25 each $1,368.75 24 Sold 50 units Total cost of goods available for sale $4,361.75 30 On hand, 90 units Refer to the information provided for Klump Co. If the company uses the LIFO inventory costing method, cost of goods sold for the month of June is: a. $2,738.00 b. $2,732.50 c. $2,722.50 d. $2,720.00

b. $2,732.50

AT&U CompanyData for the year ended December 31 are presented below: Sales (credit)$2,500,000 Sales returns and allowances 50,000 Accounts Receivable (December 31)640,000 Allowance for Doubtful Accounts (Before adjustment at December 31) 20,000 Estimated amount of uncollected accounts based on aging analysis45,000Refer to AT&U Company. If the company estimates its bad debts at 1% of net credit sales, what amount will be reported as bad debt expense? a. $4,500 b. $24,500 c. $25,000 d. $44,500

b. $24,500

Bay CameraThe company reported the following items on its financial statements for the year ended December 31, 2019: 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 Refer to Bay Camera. 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. $42,500 b. $27,500 c. $22,500 d. Not enough information is provided.

b. $27,500

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. $63,124.00 b. $39,604.50 c. $173,255.50 d. $39,515.50

b. $39,604.50

General LightingDuring the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%. Refer to General Lighting. Sales taxes are required to be paid to the state taxing authority at the end of the quarter. Which of the following records the sale of the batteries? a. Accounts Receivable 600,000 Sales Revenue 600,000 b. Accounts Receivable 636,000 Sales Revenue 600,000 Sales Tax Payable 36,000 c. Accounts Receivable 600,000 Sales Revenue 564,000 Sales Tax Payable. 36,000 d. Accounts Receivable 636,000 Sales Revenue 636,000

b. Accounts Receivable 636,000 Sales Revenue 600,000 Sales Tax Payable 36,000

Ladder DistributorsThe stockholders' equity section of the December 31, 2019, balance sheet is provided below: Common Stock, $30 par, 20,000 shares issued and outstanding: $600,000 Paid-in Capital in Excess of Par--Common Stock: 240,000 Retained Earnings: 700,000 Total Stockholders' Equity: $1,540,000 Assume that all of the 20,000 shares of stock that was issued as of December 31, 2019, was issued for $42 per share. On March 1, 2020, the company reacquired 4,000 shares of its common stock for $50 per share. Refer to Ladder Distributors. What is the total amount of stockholders' equity that will be presented on the company's March 31, 2020, balance sheet? a. $1,708,000 b. $1,372,000 c. $1,740,000 d. $1,340,000

d. $1,340,000

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. $1,080 b. $2,160 c. $1,440 d. $720

d. $720