Acct 202 test 3 ULL
Boswell company reported the following information for the current year: Sales $1,000,000, direct materials and direct labor $500,000, other variable costs $50,000, fixed costs $270,000. What is Boswell's break-even point in units?
30,000
Below is the information relating to the stockholders' equity of Blue Corporation as of December 31, 2013. 10% preferred stock, $100 par $420,000 Common stock, $20 par, 500,000 sares authorized, 100,000 shares issued and outstanding 2,000,000 Additional paid-in capital: common stock 2,300,000 Retained earnings 755,000 How many shares of preferred stock are issued and outstanding?
4,200 shares
Dividend
A Corporations distribution of cash or stock to its stockholders on a pro rata basis
Which of the following is true regarding corporations?
A corporation is a separate legal entity that may sue and be sued as if it were a person
Which of the following is NOT one of management's primary functions?
Account
What is the accounting equation for a partnership?
Assets= Liabilities + Owner's Equity
Issuance for common stock above par 1,000 shares of $1 par value stock Cash at $5 per share
Cash $1000 Common stock $1000 Paid in Capitol Excess of Par 4,000
Stine Corporation has the following: Issues 10,000 shares of $10 par value preferred stock $12 cash per share
Cash 120,000 Preferred Stock 100,000 P-I-C in Excess of Par- Preferred Stock 20,000
Hydro-Slide has the following: $5 stated value no-par stock Issues 5,000 shares at $8 per share what is the entry
Cash 40,000 Common Stock 25,000 Paid in Capitol in excess of Stated Value 15,000
Hydro Slide has the following: Issuance of 5,000 shares for $8 per
Cash 40,000 Common Stock 40,000
Amy and Allie for a partnership called Interior Designs Co. Amy owns 60% and Allie owns 40%. Revenues of Interior Designs Co. are $250,000 and expenses are $50,000. The entry to close out income to Allie's capital account will include a
Debit to Income Summary for $80,000
Issuance of common stock for cash
Debits Cash Credits Par Value of the shares to Common Stock
The date the board of directors votes to pay a dividend is called the:
Declaration date
Indicate where the event common stock issued for cash would appear, if at all, on the indirect statement of cash flows.
Financing activities section
The inventory accounts that show the cost of completed goods on hand and the cost applicable to production that is only partially completed are, respectively
Finished Goods Inventory and Work in Process Inventory
What is NOT a disadvantage of a partnership?
Limited Liability
The costs of bringing a corporation into existance, including legal fees, promoter fees, and amounts paid to the state are called:
Organizational costs
Which of the following is NOT an advantage of proprietorships?
Owner is not responsible for debt of the company
If Vickers Company issues 4,000 shares of $5 par value common stock for $140,000,
Paid-in- Capital in Excess of Par will be credited for $120,000
Cooke Corporation issues 10,000 shares of $50 par value preferred stock for cash at $90 per share. The entry to record the transaction will consist of a debit to cash for $900,000 and a credit to
Preferred Stock for $500,000 and Paid-in- Capital in Excess of Par-Preferred Stock for $400,000
Telephone expense is an example of what type of cost?
Prepaid Expense
The journal entry to record the purchase of materials to be included in the production of inventory would include a debit to
Raw Materials Inventory
A corporation's distribution of additional shares of its own stock to its stockholders without any cash exchanging hands in return is called a:
Stock Dividend
Which of the following statements about CVP Income Statements is true?
The CVP income statement classifies costs as a variable or fixed and computes a contribution margin
An increase in activity level will have the following effects on unit costs for variable and fixed costs
VC increases; FC decreases
Owners of preferred stock do not have:
Voting rights
The sales mix of a company tells
What percentage of each inventory item the company expects to sell
A corporation issued 400 shares of $10 par value common stock in payment of a $4,500 bill from its attorneys for assistance in filing the initial charter for the corporation. The entry to record this transaction will include:
a $4,000 credit to common stock
The difference between a budget and a standard is that
a budget expresses a total amount, while a standard expresses a unit amount
A corporation reacquired 600 shares of its $10 par value common stock in February for $35,000 cash. The journal entry to record this transaction would include:
a debit to Treasury stock for $35,000
A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that is currently advertised for sale at $84,000. The stock is currently trading for $16 per share. The entry to record this transaction would include:
a debit to land for $96,000
The acquisition of land by issuing commons tock is
a non-cash transaction which is not reported in the body of a statement of cash flows
A mixed cost consists of
a variable and fixed element
Incremental analysis would be appropriate for
acceptance of an order at a specific price a retain or replace equipment decision a sell or process further decision - all of these
The financial budgets include
cash budget and budgeted balance sheet
In the stockholders' equity section of the balance sheet, the classification of capital stock consists of:
common stock and preferred stock
Jarrett Company issued 600 shares of no-par common stock for $8,800. Which of the following journal entries would be made if the stock has no stated value?
debit cash $8,800; credit common stock $8,800
A corporation sold 14,000 shares of its $10 par value common stock for $13 per share. The entry to record this transaction would include:
debit to Paid-in capital in excess of par for $42,000 Cash ( 14000 * 13) Dr 182000 Common Stock ( 14000 * 10) Cr 140000 Paid in Capital in excess of par ( 14000 * 3) Cr 42000
What is the cumulative effect of the declaration and payment of a cash dividend on the basic accounting equation?
decrease in assets; decrease in stockholders' equity
The individual assets invested by a partner in the partnership
determine the partner's share of net income or loss for the year
Manufacturing costs include
direct materials, direct labor, and manufacturing overhead
Which of the following is NOT a characteristic of a partnership?
double taxation
A 2-for-1 stock split:
doubles the number of shares outstanding and divides the par value in half
Contribution margin
excludes variable selling costs from its calculation
The cash budget reflects
expected cash receipts and cash disbursements from all sources
Which of the following would be the same total amount on a flexible budget and static budget at different activity levels?
fixed manufacturing overhead
Long-range planning
generally encompasses a longer period of time than annual budget
When equipment is sold for cash, the amount received is reflected as a cash
inflow in the investing section
The decision to rule on whether to sell or process further
is process further if incremental revenue from such processing exceeds incremental costs
An opportunity cost
is the potential benefit that may be obtained by following an alternative course of action
A corporation's legal capital can be defined as the total par value of the shares:
issued
Which of the following best describes a job cost sheet?
it is a form used to record costs chargeable to a specific job and to determine the total and unit costs of the completed job
The two basic types of cost accounting systems are
job order and process cost systems
The product cost most difficult to associate with a product is
manufacturing overhead
The amount by which actual or expected sales exceeds break-even sales is referred to as
margin of safety
Gerber Corporation declared a 10% stock dividend. Retained earnings will be reduced for an amount equal to the number of shares to be distributed multiplied by the
market value per share
A corporation has the following account balances: Common Stock, $1 par value, $60,000; Paid-in-Capital in Excess of Par, $1,300,000. Based on this information, the
number of shares issued are 60,000
The most common budget period is
one year
The existence of under- or overapplied overhead at the end of the year:
requires an adjustment to Cost of Goods Sold
A stock dividend transfers:
retained earnings to paid-in capital
Treasury stock represents:
shares previously owned by investors but which have been repurchased by the corporation
A small neighborhood barbershop that is operated by its owner would likely be organized as a
sole proprietorship
Prior period adjustments are reported in the
statement of retained earnings
Prior period adjustments are reported in the:
statement of retained earnings
What is the primary difference between a static budget and a flexible budget
static budget is prepared for a single activity level, flexible budget is for multiple activity levels
Which of the following would not affect total retained earnings?
stock splits
The statement of cash flows
summarizes the operating, financing, and investing activities of an entity
Which of the following represents a period cost?
the VP of Sales' salary and benefits
Which of the following statements is correct?
the balance sheet of a sole proprietorship will show three or more capital accounts the balance sheet of a corporation will show fifty or more capital accounts -the balance sheet of a partnership will show two or more capital accounts all these statements are correct
Which statement is true concerning the decision rule on whether to make or buy
the company should buy if the cost of buying is less than the cost or producing
When no-par stock is issued:
the entire amount is credited to the Common stock account
A plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then
the order will likely be rejected
Which of the following is the starting point of the master budget
the sales budget
Why are budgets useful in the planning process?
they help communicate goals and provide basis for evaluation
If the actual overhead is greater than applied manufacturing overhead, manufacturing overhead is
underapplied
Madison Inc. uses job order costing for its brand new line of sewing machines. The costs incurred for production during 2013 totaled $18,000 of materials, $9,000 of direct labor, and $6,000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any period. Beginning work in process totaled $15,000, and the ending balance is $9,000. During the period, the company completed 20 machines. How much is the cost per machine?
$1,650
Tandem Corporation is authorized to issue 1,000,000 shares of $5 par value common stock. The corporation issued 500,000 shares of the stock for cash at $20 per share. During the year, the corporation earned $400,000 and declared and paid a cash dividend of $50,000. The total paid-in capital of Tandem Corporation after the first year is:
$10,000,000
Starsky and Hutch start a partnership. Starsky contributes a building that he purchased 10 years ago for $100,000. Because the accumulated depreciation on the building on the date of formation of the partnership in $25,000, the book value is $75,000. The fair market value is $110,000. For what amount will Starksy's capital account be credited on the books of the partnership?
$110,000 Market Value
The trial balance of Houston, Inc. includes the following balances: Common Stock, $28,000; Paid-in-Capital in Excess of Par, $64,000; Treasury Stock, $6,000; Preferred Stock, $30,000. Capital Stock totals:
$122,000
On January 1, Witt Company has a beginning cash balance of $126,000. During the year, the company expects cash disbursements of $1,020,000 and cash receipts of $870,000. If Witt requires and ending cash balance of $120,000, Witt Company must borrow
$144,000
Bob's Corporation was organized on January 1, 2013. During 2014, the corporation issued 20,000 shares of stock at $12 per share, purchased 3,000 shares of treasury stock at $13 per share, and had net income of $150,000. What is the total amount of stockholders' equity at December 31, 2013?
$351,000
Below is the information relating to the stockholders' equity of Blue Corporation as of December 31, 2013. 10% preferred stock, $100 par $420,000 Common stock, $20 par, 500,000 sares authorized, 100,000 shares issued and outstanding 2,000,000 Additional paid-in capital: common stock 2,300,000 Retained earnings 755,000 Compute total paid-in capital.
$4,720,000
A compnay had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current year. The ending balance in retained earnings is:
$43,375
The following selected amounts are available for Clark Company Retained Earnings $800 Net loss 150 Cash dividends declared 100 Stock dividends declared 100 What is its ending retained earnings balance?
$450
Given the following data for Harder Company, compute cost of goods manufactured Direct Materials Used $120,000 Beginning work in process $20,000 Direct labor 200,000 Ending work in process 10,000 Manufacturing overhead 150,000 Beginning finished goods 25,000 Operating expenses 175,000 Ending finished goods 15,000
$480,000
On January 1, 2006, Victor and Nikki have capital account balances of $80,000 and $100,000. Their partnership agreement provides for interest allowances of $8,000 and $10,000 respectively; salaries of $30,000 to Victor and $24,000; and the remainder divided 6:4 respectively. Victor's share of the $82,000 partnership net income would be:
$49,200
Below is the information relating to the stockholders' equity of Blue Corporation as of December 31, 2013. 10% preferred stock, $100 par $420,000 Common stock, $20 par, 500,000 sares authorized, 100,000 shares issued and outstanding 2,000,000 Additional paid-in capital: common stock 2,300,000 Retained earnings 755,000 Total stockholders' equity is:
$5,475,000
Carlo and Jake create a partnership. Carlo contributes accounts receivable of $10,000. Allowance for doubtful accounts on these receivables has a book value of $500 and a market value of $600. What amount of allowance for doubtful accounts should be recorded at the creation of the partnership?
$600 Market Value
Karl Corporation was organized on January 2, 2010. During 2013, Karl issued 20,000 shares at $24 per share, purchased 3,000 shares or treasury stock at $26 per share, and had net income of $300,000. What is the total amount of stockholders' equity at December 31, 2013?
$702,000
Worth Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured, $816,000; beginning finished goods, $$252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Worth Company's cost of goods sold for the year is
$804,000
The board of directors votes to declare a cash dividend of $1.00 per share. The company has 15,000 shares authorized, 10,000 shares issued and 9,500 shares outstanding. The total amount of the dividend is:
$9,500
Which of the following changes will be reported in the financing activities section of the SoCF? 1) Declaration and payment of a cash dividend during the period 2) Net income for the period
1
The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of shares outstanding is:
12,000
