ACIS Final Exam Math Practice

If a gain of $167000 is realized in the cash sale of a building having a book value of $666000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is...

$167000 + $666000 = *$833000* (Gain on sale + Building Book Value)

Outstanding stock of the Sunland Corporation included 41000 shares of $5 par common stock and 13500 shares of 5%, $10 par non-cumulative preferred stock. In 2019, Sunland declared and paid dividends of $6150. In 2020, Sunland declared and paid dividends of $20500. How much of the 2020 dividend was distributed to preferred shareholders?

(13500 × $10) × 0.05 = *$6750* (Preferred Shareholders × Preferred PV) × Dividend Rate

Concord Corporation purchased treasury stock with a cost of $41800 during 2022. During the year, the company paid dividends of $15200 and issued bonds payable for proceeds of $665800. Cash flows from financing activities for 2022 total...

*$608800 net cash inflow* ($665800 - $41800 - $15200) = $608800 (Bonds Payable issued - Treasury Stock purchased - Div. paid)

Accounts receivable arising from sales to customers amounted to $39000 and $45000 at the beginning and end of 2022, respectively. Income reported on the income statement for the year was $250000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is...

[$250000 + ($39000 - $45000)] = *$244000* [Net Income + (Beginning Accounts Receivable - Ending Accounts Receivable)]

Oriole Company purchased a machine with a list price of $122000. They were given a 5% discount by the manufacturer. They paid $2500 for shipping and sales tax of $9000. Oriole estimates that the machine will have a useful life of 10 years and a salvage value of $30000. If Oriole uses straight-line depreciation, annual depreciation will be...

[($122000 × 0.95) + $2500 + $9000 - $30000] ÷ 10 = *$9740* ([List Price × (1 - 0.05)] + Ship. Cost + Sales Tax - Salvage Value ) ÷ 10 yrs.

A gain or loss on disposal of a plant asset is determined by comparing the... - book value of the asset with the asset's original cost. - original cost of the asset with the proceeds received from its sale. - replacement cost of the asset with the asset's original cost. - book value of the asset with the proceeds received from its sale.

book value of the asset with the proceeds received from its sale.

What is the total stockholders' equity based on the following account balances? Common Stock --> $1800000 Paid-In Capital in Excess of Par --> 140000 Retained Earnings --> 360000 Treasury Stock --> 80000

$1800000 + $140000 + $360000 - $80000 = *$2220000* (Common Stock + PIC + Retained Earnings - Treasury Stock)

On January 1, Pina Colada Corp. issued $3800000, 14%, 5-year bonds with interest payable on December 31. The bonds sold for $4073965. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for...

$4073965 × 0.12 = *$488876* (Sell. price × 12%)

A machine costing $173000 was destroyed when it caught fire. At the date of the fire, the accumulated depreciation on the machine was $78000. An insurance check for $202100 was received based on the replacement cost of the machine. The entry to record the insurance proceeds and the disposition of the machine will include a...

*gain on disposal of $107100* $202100 - ($173000 - $78000) = $107100 (Insurance Proceeds - (Cost - Accumulated Dep.))

Max Videos has a beginning balance in accounts receivable of $44,000 and an ending balance of $42,000. Sales revenue during the period are $129,000 and cost of goods sold totals $70,000. How much cash was received from customers?

[$129,000 + ($44,000 - $42,000)] = *$131,000* [Sales Revenue + (Beginning Accounts Receivable - Ending Accounts Receivable)] = Cash collections

On November 1, 2021, Blossom Company places a new asset into service. The cost of the asset is $73000 with an estimated 10-year life and $11000 salvage value at the end of its useful life. What is the depreciation expense for 2022 if Blossom Company uses the straight-line method of depreciation?

[($73000 - $11000) ÷ 10] = *$6200* [(Cost - Salvage Value) ÷ 10 yrs] = Dep. Expense

When the effective-interest method of amortization is used for a bond premium, the amount of interest expense for an interest period is calculated by multiplying the... - face value of the bonds at the beginning of the period by the effective interest rate. - carrying value of the bonds at the beginning of the period by the contractual interest rate. - face value of the bonds at the beginning of the period by the contractual interest rate. - carrying value of the bonds at the beginning of the period by the effective interest rate.

carrying value of the bonds at the beginning of the period by the effective interest rate.

The following totals for the month of April were taken from the payroll records of Tamarisk Company. Salaries --> $108000 FICA taxes withheld --> 8260 Income taxes withheld --> 22500 Medical insurance deductions --> 4100 Federal unemployment taxes --> 290 State unemployment taxes --> 1940 The journal entry to record the monthly payroll on April 30 would include a... - debit to Salaries and Wages Payable for $108000. - debit to Salaries and Wages Expense for $108000. - credit to Salaries and Wages Payable for $108000. - debit to Salaries and Wages Expense for $73140.

debit to Salaries and Wages Expense for $108000

All of the following statements are true regarding the declining-balance method of depreciation except... - the declining-balance method ignores salvage value when calculating depreciation. - the declining-balance method is appropriate when assets lose their usefulness rapidly. - the declining-balance method produces lower depreciation expense in the early years as opposed to the later years. - the declining-balance method is compatible with the matching principle.

the declining-balance method produces lower depreciation expense in the early years as opposed to the later years.

Swifty's Boutique has total receipts for the month of $22680 including sales taxes. If the sales tax rate is 5%, what are Swifty's sales for the month?

$22680 ÷ 1.05 = *$21600* (Total Receipts ÷ 5%)

Bonds with a face value of $360000 and a quoted price of 102.25 have a selling price of...

$360000 × 1.0225 = *$368100* (Face Value × 102.25%)

Blossom Company issued $6000000 of 6%, 10-year bonds on one of its interest dates for $5182000 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. How much bond interest expense (to the nearest dollar) should be reported on the income statement for the end of the first year?

$5182000 × 0.08 = *$414560* (Bond iss. pr. × 8%)

If a loss of $97000 is realized when selling (for cash) a building having a book value of $720000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is...

$720000 - $97000 = *$623000* (Building Book Value - Loss on Sale)

Novak Corp. borrowed $768000 from Central Bank on May 31, 2019. The 3-year, 7% note required annual payments of $292648 beginning May 31, 2020. Interest expense for the year ended December 31, 2019 was...

$768000 × 0.07 × 7/12 = *$31360* (Amount Borrowed × 7% × 7/12) **(7/12) is (May to Dec./12 total months)

Blossom Company acquires land for $94000 cash. Additional costs are as follows. Removal of shed --> $700 Filling and grading --> 1800 Salvage value of lumber of shed --> 130 Broker commission --> 1220 Paving of parking lot --> 11000 Closing costs --> 520 Blossom will record the acquisition cost of the land as...

$94000 + ($700 - $130) + $1800 + $1220 + $520 = *$98110* (Purchase price + Removal Cost - Salvage Value + Filling + Commission + Closing costs)

The following are data concerning cash received or paid from various transactions for Orange Peels Corporation: Sale of land --> 100,000 Sale of equipment --> 50,000 Issuance of common stock --> 70,000 Purchase of equipment --> 30,000 Payment of cash dividends --> 60,000 How much is net cash provided by investing activities?

($100,000 + $50,000 - $30,000) = *$120,000* (Sale of land + Sale of equipment - Purchase of Equipment) = Net cash provided by investing activities

Sunland Company bought a machine on January 1, 2022. The machine cost $180000 and had an expected salvage value of $21000. The life of the machine was estimated to be 6 years. The book value of the machine at the beginning of the third year would be...

($180000 - $21000) ÷ 6 = $26500; $180000 - ($26500 × 2) = *$127000* ((Cost - Salvage Value)/Life in Years) = Annual Depreciation (Cost - (Annual Depreciation × 2)) = Book Value

Marigold Corp. had the following transactions during 2022: 1. Issued $182500 of par value common stock for cash. 2. Recorded and paid wages expense of $87600. 3. Acquired land by issuing common stock of par value $73000. 4. Declared and paid a cash dividend of $14600. 5. Sold a long-term investment (cost $4380) for cash of $4380. 6. Recorded cash sales of $584000. 7. Bought inventory for cash of $233600. 8. Acquired an investment in Zynga stock for cash of $30660. 9. Converted bonds payable to common stock in the amount of $730000. 10. Repaid a 6-year note payable in the amount of $321200. What is the net cash provided by financing activities?

($182500 - $14600 - $321200) = *-$153300* (Stock Issued - Div. paid. - Notes Payable paid) = net cash provided by financing activities

A factory machine was purchased for $188000 on January 1, 2022. It was estimated that it would have a $28000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40000 hours in the 5 years. If the actual number of machine hours ran in 2022 was 4000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2022 would be...

($188000 - $28000) ÷ 40000 = $4.00 $4.00 × 4000 = *$16000* (Cost - Salvage Value) ÷ 40,000 hrs = Dep. /hr. (Dep. /hr. × 4000)

Taylor Enterprises sold a piece of equipment for $3,000. The original cost was $15,000 and the accumulated depreciation prior to the sale was $10,000. What amount, if any, would appear in the operating activities section of the statement of cash flows using the indirect method?

(15,000 - 10,000 - 3,000) = *$2,000* (Original Cost - Accumulated Depreciation - Sale Price)

The following data are available for Allen Clapp Corporation: Net income --> $200,000 Depreciation expense --> 40,000 Dividends paid --> 60,000 Gain on sale of land --> 10,000 Decrease in accounts receivable --> 20,000 Decrease in accounts payable --> 30,000 How much is cash provided by operating activities using the indirect method?

($200,000 + $40,000 - $10,000 + $20,000 - $30,000) = *$220,000* (Net income + Depreciation expense - Gain on disposal of land + Decrease in accounts receivable - Decrease in accounts payable) = Net cash provided by operating activities term-53

The following data is available for Blossom Company at December 31, 2020: - Common stock, par $10 (authorized 28000 shares) --> $224000 - Treasury stock (at cost $15 per share) --> $975 Based on the data, how many shares of common stock are outstanding?

($224000 ÷ 10) - ($975 ÷ $15) = *22335* (Common Stock ÷ Par Value) - (Treasury Stock ÷ Cost per share)

Crane Company bought equipment for $240000 on January 1, 2021. Crane estimated the useful life to be 4 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2022, Crane decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2022?

($240000 - $0) ÷ 4 = $60000; ($240000 - $60000) ÷ (6 - 1) = *$36000* (Cost - Salvage Value) ÷ 4 yrs. = Dep./yr. (Cost - Annual Dep.) ÷ (6 - 1)

An asset was purchased for $300000. It had an estimated salvage value of $60000 and an estimated useful life of 10 years. After 5 years of use, the estimated salvage value is revised to $44000 but the estimated useful life is unchanged. Assuming straight-line depreciation, depreciation expense in Year 6 would be...

($300000 - $60000) × 5/10 = $120000 [($300000 - $120000) - $44000] ÷ (10 - 5) = *$27200* (Cost - Salvage Value) × 5/10 = Accumulated Dep. (Cost - Accumulated Dep. - Salvage Value) ÷ (10 - 5)

A company had net income of $310200. Depreciation expense is $28600. During the year, accounts receivable and inventory increased $16500 and $44000, respectively. Prepaid expenses and accounts payable decreased $2200 and $15400, respectively. There was also a loss on the sale of equipment of $18700. How much cash was provided by operating activities?

($310200 + $28600 - $16500 - $44000 + $2200 - $15400 + $18700) = *$283800* (Net Income + Dep. exp. - Accounts Receivable increase - Inventory increase + Prepaid Expenses decrease - Accounts Payable decrease + Loss on Sale) = cash was provided by operating activities

A plant asset was purchased on January 1 for $35000 with an estimated salvage value of $10000 at the end of its useful life. The current year's depreciation expense is $2500 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $10000. The remaining useful life of the plant asset is...

($35000 - $10000) ÷ $2500 = 10; 10 - ($10000 ÷ $2500) = *6 years* (Cost - Salvage Value) ÷ Dep. Exp. = Useful Life (Useful Life - (Accumulated Dep. ÷ Dep. Exp.))

A company purchased factory equipment for $520000. It is estimated that the equipment will have a $52000 salvage value at the end of its estimated 4-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be...

($520000 - $0) × 0.25 = $130000 (Cost - Annual Dep.) × (1/8 × 2) = End. Annual Dep.

Ayayai Corp. reported net income of $87300 for the year 2022. During 2022, accounts receivable increased by $5820, accounts payable decreased by $3880 and depreciation expense of $9700 was recorded. Net cash provided by operating activities for 2022 is...

($87300 - $5820 - $3880 + $9700) = *$87300* (Net Income - Accounts Receivable Increase - Accounts Payable Decrease + Dep. exp.)

A company purchased office equipment for $42000 and estimated a salvage value of $8000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is...

(100% ÷ 5) × 2 = *40%* (100% ÷ use. life) × 2

The following data are available for Something Strange: Issuance of bonds payable --> $100,000 Sale of investment --> 50,000 Issuance of common stock --> 60,000 Payment of cash dividends --> 30,000 How much is net cash provided by financing activities?

(100,000 + 60,000 - 30,000) = *$130,000* Bonds Payable Issued + Common Stock Issued - Cash Div. paid) = net cash provided by financing activities

Simpson Inc. reported $100,000 provided by operating activities. The company invested $30,000 in production equipment and it paid $10,000 in dividends. How much is its free cash flow?

(100,000 - 30,000 - 10,000) = *$60,000*

Dehesa, Inc. has 8,000 shares of 5%, $15 par, cumulative preferred stock and 50,000 shares of $3 par common stock outstanding. No dividends were declared last year. However, the board of directors just declared a $34,000 dividend this year. What amount of the total dividend will be paid to common stockholders?

(8,000 × 0.05 × 15) = 6,000 (6,000 + 6,000) = 12,000 (34,000 - 12,000) = *22,000* (Number of Shares × 5% × $15 par) = Past Year (Past Year + Current Year) = cash available for dividends (dividends to pay - cash available) = total dividend paid

Bridgeport Corp. issues 830, 10-year, 8%, $1000 bonds dated January 1, 2020, at 95. The journal entry to record the issuance will show a...

(830 × $1000) × 0.95 = *$788500* (Number of bonds × $1000) × 95%

Five thousand bonds with a face value of $2000 each, are sold at 85. The entry to record the issuance is...

*- Debit Cash for 8500000* *- Debit Discount on Bonds Payable for 1500000* *- Credit Bonds Payable for 10000000* (5000 × $2000) × 0.85 = $8500000 (Number of bonds × $2000) × 85%

Moss County Bank agrees to lend the Crane Company $335000 on January 1. Crane Company signs a $335000, 6%, 9-month note. What is the adjusting entry required if Crane Company prepares financial statements on June 30?

*- Debit Interest Expense for 10050* *- Credit Interest Payable for 10050* $335000 × 0.06 × 6/12 = $10050 (Face Value × 6% × 6/12)

Vaughn Manufacturing is authorized to issue 11000 shares of 9%, $100 par value preferred stock and 530000 shares of no-par common stock with a stated value of $1 per share. If Vaughn issues 8000 shares of preferred stock for land with an asking price of $1000000 and a market value of $880000, which of the following would be the best journal entry for Vaughn to record?

*- Debit Land for 880000* *- Credit Preferred Stock for 800000* *- Paid-in Capital in Excess of Par - Preferred for 80000* 8000 × $100 = $800000 $880000 - $800000 = $80000 (Number of Shares Issued × Par Values) (Market Value - (Number of Shares Issued × Par Value))

On January 1, Concord Corporation had 630000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event, - Concord's Paid-in Capital in Excess of Par Value account increased $315000. - Concord's total stockholders' equity was unaffected. - Concord's Stock Dividends account increased $945000. - All of these are correct.

*All of these are correct * (630000 × 0.10) × $15 = $945000 (63000 × ($15 - $10) = $315000 (Shares Outstanding × Dividend % × Market Value) (Shares Outstanding × Dividend %) × (Market Value - Par Value)

Blossom Company issues 46000 shares of $100 par value preferred stock for cash at $105 per share. The entry to record the transaction will consist of a debit to Cash for $4830000 and a credit or credits to...

*Preferred Stock for $4600000 and Paid-in Capital in Excess of Par Value—Preferred Stock for $230000.* 46000 × $100 = $4600000 [($105 - $100) × 46000] = $230000 (Number of shares issued × Par Value) [(Issued Price per share - Pare Value) × Number of shares issued]

A corporation sold 1,000 shares of its $2.00 par value common stock for $10.00 per share and later repurchased 100 of those shares for $12.00 per share. What will be debited to record the repurchase of the 100 shares?

*Treasury Stock for $1,200* (1,000 × $12) (Number of shared sold × repurchased cost per share)

On January 1, Blossom Company had 96000 shares of $10 par value common stock outstanding. On May 7 the company declared a 5% stock dividend to stockholders of record on May 21. Market value of the stock was $12 on May 7. The entry to record the transaction of May 7 would include a...

*debit to Stock Dividends for $57600* 96000 × 0.05 × $12 = $57600 (Shares Outstanding × Div.% × Market Value)

Cullumber Company purchased a building on January 2 by signing a long-term $3768000 mortgage with monthly payments of $34500. The mortgage carries an interest rate of 8 percent. The entry to record the first monthly payment will include a...

*debit to the Interest Expense account for $25120* [($3768000 × 0.08) ÷ 12] = $25120 [(Mortgage Balance × 8%) ÷ 12]

A corporation shows the following account balances: Retained earnings --> $400,000 Treasury stock―common --> 20,000 Paid-in capital in excess of par value―common --> 55,000 Treasury stock―preferred --> 30,000 Common stock --> 200,000 Preferred stock --> 180,000 Paid-in capital in excess of par value―preferred --> 60,000 How much is total stockholders' equity?

200,000 + 180,000 + 55,000 + 60000 + 400,000 - 20,000 - 30,000 = *$845,000* (Common Stock + Preferred Stock + Paid-in capital in excess of par value―preferred + Paid-in capital in excess of par value―common + Retained Earnings - Treasury stock―common - Treasury stock―preferred) = Total Stockholders' Equity

Blue Corporation began business in 2020 by issuing 50000 shares of $5 par common stock for $9 per share and 5000 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, 2020 balance sheet, Blue would report

50000 × $5 = *$250000* (Number of shares issued × Par Value)

Assume that the Safferstein Corporation uses the indirect method to depict cash flows. Indicate where, if at all, long-term debt retired with cash would be reported on the statement of cash flows. - Operating activities section. - Financing activities section. - Investing activities section. - Does not represent a cash flow.

Financing activities section

If the market rate of interest is 10%, a $15000, 13%, 10-year bond that pays interest annually would sell at an amount... - less than face value. - greater than face value. - equal to face value. - that cannot be determined.

greater than face value.