Accounting 1 Final Exam Review Pt 6 ( CH 9, 11, 13 Exam -Ch 14 HW)

5) PAGE 7 What is the amount that should be reported as a result of the payment of dividends? use ( ) around number to indicate if the amount is to be subtracted?

(12,000) -include the ( )'s

2) PAGE 7 What is the amount that should be reported as a result of the change in Merchandise Inventory? use ( ) around number to indicate if the amount is to be subtracted?

(8,000) -include the ( )'s

12) Current liabilities are those that must be paid within?

1 year

3) PAGE 7 What is the amount that should be reported as a result of the change in Accounts Payable? use ( ) around number to indicate if the amount is to be subtracted?

16,000

4) PAGE 7 What is the amount that should be reported as a result of the sale of land? use ( ) around number to indicate if the amount is to be subtracted?

31,000

1) PAGE 7 What is the amount that should be reported for Net Income?

54,000

25) Smith Industries, Inc. has 4,000 shares of common stock, par value $2 and has 1,000 shares of 8%, $50 par value, non-cumulative preferred stock. Three years of dividends are in arrears. The board of directors declared a $70,000 dividend. How much of the dividend will the preferred stockholders receive?

A: WORK: Pt 1): (Shares non-cumulative preferred stock) 1,000 X 0.08 (8%) = 80. Pt 2): 80 X 50 (Par value) = $4,000 (ANSWER)

1) A new machine with a initial cost of $24,000, a residual value of $4,000 and a useful life of three years would have a would have a book value at the end of the third year of?

A: $ 4,000

5) A machine with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method?

A: $16,250

21) BigTex Industries, Inc. has 5,000 shares of common stock, par value $2 and has 2,000 shares of 6%, $50 par value, cumulative preferred stock. Two years of dividends are in arrears. The board of directors declared a $80,000 dividend. How much of the dividend will the preferred stockholders receive?

A: $18,000 WORK: Pt 1): (Shares of Preferred Stock) 2,000 X 0.06(6%) =120. Pt 2): 120 X 50 (Par Value) = 6,000. Pt 3): 6,000 X 2 (bc 2 yrs dividends) = 12,000. Pt 4): 12,000 + 5,000 (Shares of Common Stock)= $18,000 (ANSWER)

7) A plant asset with a cost of $31,000 and accumulated depreciation of $30,000 is sold for $3,500. What is the amount of the gain or loss on disposal of the plant asset?

A: $2,500 gain WORK: Pt 1): 31,000 - 30,000= 1,000 Pt 2): 3,500 -1,000= 2,500 (ANSWER)

6) A machine with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

A: $20,000 WORK: Pt 1): (Machine cost) 65,000 - (Estimated Residual Value) 5,000 / (Hours) 15,000 = 4. Pt 2): 4 X 5,000 (it by the number of hours used in 2 years which is) =8,000. Pt ): (65,000-5,000)/15,000= 4 Pt2): 4 X 5,000 = 20,000 (ANSWER)

3) Equipment with an appraisal value of $47,000 is offered for sale on for $42,000. The purchaser acquires it for $30,000 in cash and a 90-day $6,000 note payable. Transportation costs were $800 and the cost of installation was $400. The following month $60 of repairs were made. The capitalized cost of the equipment would be?

A: $37,200 WORK: Cash (30,000) Plus (+) Note Payable (6,000) Plus (+) Transportation Cost (800) Plus (+) the cost of Installation (400) = 37,200 (ANSWER)

18) 5,000 shares of 8% Preferred Stock are issued with a par value of $50. The stock is sold for $100. The per share dividend rate is?

A: $4 WORK: Pt 1): 5,000 X 0.08 = 400 Pt 2): 400/100= $4 (ANSWER)

2) Equipment with a cost of $23,000 has an estimated residual value of $3,000 and an estimated life of 5 years or 2,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?

A: $4,000 WORK: (23,000 - 3,000)/5= $4,000 (ANSWER)

13) A new employee, Joe Chapman, earns $10 per hour and gets time-and-a-half over 40 hours per week. His first week he worked 50 hours. Deductions from his check were $30 for OASDI, $7 for Medicare, $ 61 for federal income tax withholding, and $15 for a United Way contribution. What was his gross pay for the period?

A: $550 WORK: Pt 1): $10 per hr X 40 hrs= $400 (Regular Pay) Pt 2): (Regular hrs) 40 - 50 (Over time hrs)= 10 Pt 3): Calculate Overtime pay: $10 ( Reg. pay per hr) X 1.5 (When over time you get paid 1 and 1/2 more) = $15 Pt 4): $15 (Overtime pay) X 10 (Answer from Pt 2) = $150 (Is Overtime pay for the 10hrs more bc 40 (reg hr) - 50 (over time hr)=10) Pt 5): Now add up you Regular Pay (answer pt1) + Over time Pay (answer from Pt 4) 400 + 150= $550 (ANSWER)

17) The articles of incorporation for Highway 151 Corporation authorizes 50,000 shares of common stock. If 35,000 shares were originally issued and 4,000 shares were subsequently reacquired what is the amount of cash dividends to be paid if a $2 per share dividend is declared?

A: $62,000 FORMULA: Shares Issued - shares reacquired (treasury stock) = outstanding shares. Dividends are paid to outstanding shares. WORK: Pt 1): 35,000- 4,000 = 31,000 Pt2): 31,000 X 2 = 62,000 (ANSWER)

11) On Oct. 1, $25,000 is borrowed from the Ace Bank. The promissory note has a 9 month term, with an interest rate of 10%. With a year-end of Dec. 31, the adjusting entry to accrue interest expense would be?

A: $625 WORK: 25,000 x 0.10 x 3 months this year (Oct - Dec)/12= $200 (ANSWER) **0.10 = 10% ** Put "3" months instead of 9 bc it says Oct 1st- Dec 31st which = 3 months in total **12 bc 12 months in yr

23) What is the ending Retained Earnings based on the following account balances? Net Income 8,000 Beginning Retained Earnings 80,000 Dividends Declared 6,000 Common Stock 100,000

A: $82,000 WORK: Pt 1): 8,000 (Net Income) + 80,000 (Beg. Retained Earnings) = 88,000 Pt 2): 88,000 - 6,000 (Dividends) = $82,000 (ANSWER)

20) A corporation has 40,000 shares of $30 par value outstanding. Each share has a current market value of $90. If the corporations issues a 4-for-1 stock split, how many shares will be outstanding after the split?

A: 160,000 WORK: 40,000 (Shares) X 4 (bc 4:1 split) = $160,000 (ANSWER)

4) A depreciable asset is acquired on the first day of April. The company's year-end is Dec. 31. Assuming the straight line method is used, the depreciation expense taken the first year will be what percentage of a full-year's depreciation?

A: 75%

19) Big Centex Corporation issued 3,000 shares of $10 par value common stock at $17 per share. When the transaction is recorded, credits are made to:?

A: Common Stock, $30,000 and Paid-In Capital in Excess of Par Value, $21,000 WORK: Pt 1): 3,000 X $10 = $30,000 (Common Stock ANSWER) Pt 2): to get $21,000 in par value IDK

10) The Bevo Gold Company purchased a mining site for $600,000 on July 1, 2020. The company expects to mine gold for the next 4 years and anticipates that a total of 15,000 tons will be recovered. During 2020 the company extracted 2,000 tons of gold. The depletion expense to be recorded for 2020 is?

A:$80,000 WORK: Pt 1): 600,000 / 15,000 tons = $40 per ton for every ton extracted. Pt2 ): 2,000 tons extracted X $40 =$80,000 (ANSWER)

16) The entry to record the issuance of 100 shares of common stock with no par value for $700 would include a debit to?

Cash

24) Earnings per Share (EPS) is a widely used measure to evaluate the operating performance of a company. FASB requires that it be reported on the?

Income Statement

8) Patents, copyrights and goodwill are?

Intangible assets

9) Amortization records the decline in the utility of?

Intangible assets

15) The company needs more time to pay a $5,000 accounts payable and a 120 day, 10% note was issued. The journal entry to record this would include a credit to?

Note payable

22) When a company sells Treasury stock for more than it paid for it the cost of the stock is removed from the Treasury Stock account and?

Paid-In Capital from Treasury Stock is credited.

14) Which of the following is not a payroll tax expense?

United Way contribution