Accounting Ch 9, 10, 11, 12 Review

The category that is generally considered to be the best measure of a company's ability to continue asa going concern is:

Cash flows from operating activities

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the _______ in the investing activities section.

Cash inflow and cash outflow must be reported separately

Which of the following activities would be classified as an investing activity

Cash paid (Loaned) to a borrower as a loan

On the statement of cash flows, the cash flows from operating activities section would incliude

Cash receipts atom sales activities

A cash register tape shows cash sales of 6,000 and sales taxes of 300. The journal entry to record this information is:

Cash. 6,300 Sales Revenue 6,000 Sales Tax Payable 300

What is the total stockholders equity based on the following account balances Common Stock 75,000 Paid-In Capital in Excess of Par 50,000 Retained Earnings. 175,000 Treasury Stock 25,000

Common Stock + Retained Earnings + Treasury Stock = 950,000

Alt Corp. issues 3,000 shares of 10 par value common stock at 14 per share. When the transaction is recorded, credits are made to:

Common stock 30,0000 and Paid-in Capital in Excess of Par Value 12,000

The chief accounting officer in a company is known as the:

Controller

The order of presentation of activities on the statement of cash flows is:

Operating, investing, and financing

The number of shares of issued common stock equals:

Outstanding shares plus treasury shares

IF Norben Company issues 4,000 shares of 5 par value common stock for 140,000, the account:

Paid-in Capital in Excess of Par value will be credited for 120,000

Which of the following depreciation methods beset fits those assets that tend to wear out before they become obsolete?

Units-of-Production Method

Yanik corporation issues 4,000 10 year 8%, 1,000 bonds dated January 1, 2014, at 97. The journal entry to record the issuance will show a:

(4,000 x 1,000) x (1-.97) =Discount Debit to Discount on Bonds Payable for 120,000

On January 10, 2010, Maxim Corporation acquired equipment for 124,000. The estimated life of the equipment is 3 years or 24,000 hours. The estimated residual value is 10,000. What is the depreciation for 2010, if Baldwin Corporation uses the asset 9,100 hours and uses the units-of-production method of depreciation?

124,000-10,000/24,000= 4.75 per hour 4.75 x 9,100= 43,225

The following data is available for BOX Corporation at December 31, 2014: Common Stock par 1p (Authorized 30,000 shares) 250,000 Treasury Stock (at cost 15 per share) 1,200 Based on the data, how many shares of common stock are issued?

250,000/10 =25,000 Shares Common Stock/Par value= #Shares of Stock

Bonds with a face value of 300,000 and a quoted price of 102 1/4 have a selling price of:

300,000 x 1.0225= 306,750

Holden Packaging Corporation began business in 2014 by issuing 80,000 shares of 5 par common stock for 8 per share and 20,000 shares of 6%, 10 par preferred stock for par. At year end, the common stock had a market value of 10. On its December 31, 2014 balance sheet, holden packaging would report:

80,000 x 5 =400,000 (Par value) Common Stock of 400,000

Johnson Company issued 900 shares of no-oar common stock for 15,300. Which of the following journal entries would be made if the stock has no stated value?

Cash 15,300 Common Stock- No Par Value 15,300

If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at:

A discount

Which of the following is not a current liability on December 31, 2014?

A lawsuit judgement to be decided on January 10, 2015.

In preparing a statement of cash flows, a conversion of bonds into common stock will be reported in:

A separate schedule or note to the financial statements

Moss County Bank agrees to lend the Sadowski Brick Company 300,000 on January 1. Sadowski Brick Company signs a 300,000 6% 9 month note. The entry made by them on January 1 to record the proceeds and issuance of the note is:

Cash 300,000 Notes Payable 300,000

The amount of stock that may be issued according to the corporation's charter is referred to as the:

Authorized Stock

Of the items below, the one that appears first on the statements of cash flows is:

Net Increase (Decrease) in cash

A patent should:

Be amortized over its useful life or 20 years, whichever is shorter.

On January 2, 2010, KJ Corporation acquired equipment for 260,000. The estimated life of th equipment is 5 years of 40,000 hours. The estimated residual value is 20,000. What is the book value of the asset on December 31, 2011, if KJ Corporation uses the straight-line method of depreciation?

Calculation of cost - residual value/ Total units to be produced AKA 260,000-20,000/5= 4800 per year x2=96,000 Cost-Total Residual value per year 260,000-96,000= 164,000

A corporation records a dividend-related liability

On the declaration date

A company receives 261 of which 21 is for sales tax. The journal entry to record the sale would include a:

Debit to Cash for 261

The portion of the cost of natural resources that is consumed in a particular period is called:

Depletion Expense

Which of the following most likely would be classified asa current liability?

Dividends Payable

Which of the following depreciation methods best applies to those assets that generate greater revenue earlier in their useful lives?

Double-Declining-Balance Method

Costs that do not extend the asset's capacity or its useful life, but merely maintain the asset or restore it to working order are recorded as:

Expenses

Which of the following is a correct statement regarding the disposal of an asset for no proceeds?

IF the asset is not fully depreciated, a gain on the disposal can occur.

West Country Bank agrees to lend Drake builders Company 200,000 on January 1. Drake Builders Company signs a 200,000 6% 6 month note. What is the adjusting entry required if Drake Builders Company prepares financial statements on March 30?

Interest Expense 3,000 Interest Payable 3,000 (200,000 x 6% x 3/12)

Using an accelerated depreciation method (DDB) will cause a profitable company to incur:

Less taxes in early years of the asset's use as compared to later years.

The present value of a bond is also known as its

Market price

Cash receipts from interest and dividends are classified as:

Operating Activities

The statement of cash flows:

Summarizes the operating, financing, and investing activities of an entity

When an asset is fully depreciated:

The book value is equal to the residual value and the asset has reached the end of its estimated useful life.

Which of the following would not create a cash flow?

The company converts bonds into common stock