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# ACC 291 Final Exam Guide

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<strong>ACC</strong> <strong>291</strong> <strong>Final</strong> <strong>Exam</strong> <strong>Guide</strong><br />

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Question 207<br />

On January 1, a machine with a useful life of five years and a residual value of \$40,000 was purchased<br />

for \$120,000. What is the depreciation expense for year 2 under the double-declining-balance method of<br />

depreciation?<br />

IFRS Multiple Choice Question 01<br />

As a recent graduate of State University you're aware that IFRS requires component depreciation for<br />

plant assets. A friend has asked you to succinctly explain what component depreciation means. Which<br />

of the following correctly describes component depreciation?<br />

Multiple Choice Question 198<br />

Given the following account balances at year end, compute the total intangible assets on the balance<br />

sheet of Janssen Enterprises.<br />

Cash \$1,500,000<br />

Accounts Receivable 4,000,000<br />

Goodwill 2,500,000<br />

Research & Development Costs 2,000,000<br />

Explanation: Intangible Assets = Goodwill + Trademarks = 3,500,000<br />

Multiple Choice Question 146<br />

Bonds with a face value of \$300,000 and a quoted price of 97¼ have a selling price of<br />

Multiple Choice Question 188<br />

Sparks Company received proceeds of \$423,000 on 10-year, 8% bonds issued on January 1, 2013. The<br />

bonds had a face value of \$400,000, pay interest annually on December 31st, and have a call price of

102. Sparks uses the straight-line method of amortization. What is the carrying value of the bonds on<br />

January 1, 2015?<br />

Multiple Choice Question<br />

S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was reached<br />

whereby E. Corp. would pay S. Lawyer a legal fee of approximately \$15,000 by issuing 8,000 shares of<br />

its common stock (par \$1). The stock trades on a daily basis and the market price of the stock on the<br />

day the debt was settled is \$1.80 per share. Given this information, the best journal entry for E. Corp. to<br />

record for this transaction is<br />

Multiple Choice Question 110<br />

Logan Corporation issues 50,000 shares of \$50 par value preferred stock for cash at \$60 per share. The<br />

entry to record the transaction will consist of a debit to Cash for \$3,000,000 and a credit or credits to<br />

IFRS Multiple Choice Question 01<br />

Jahnke Corporation issued 8,000 shares of €2 par value ordinary shares for €11 per share. The journal<br />

entry to record the sale will include<br />

Multiple Choice Question 80<br />

Zoum Corporation had the following transactions during 2014:<br />

1. Issued \$125,000 of par value common stock for cash.<br />

2. Recorded and paid wages expense of \$60,000.<br />

3. Acquired land by issuing common stock of par value \$50,000.<br />

4. Declared and paid a cash dividend of \$10,000.<br />

5. Sold a long-term investment (cost \$3,000) for cash of \$3,000.<br />

6. Recorded cash sales of \$400,000.<br />

7. Bought inventory for cash of \$160,000.<br />

8. Acquired an investment in Zynga stock for cash of \$21,000.<br />

9. Converted bonds payable to common stock in the amount of \$500,000.<br />

10. Repaid a 6 year note payable in the amount of \$220,000.<br />

What is the net cash provided by financing activities?<br />

Multiple Choice Question 176<br />

Colie Company had an increase in inventory of \$120,000. The cost of goods sold was \$490,000. There<br />

was a \$30,000 decrease in accounts payable from the prior period. Using the direct method of reporting<br />

cash flows from operating activities, what were Colie's cash payments to suppliers?<br />

IFRS Multiple Choice Question 04<br />

Each of the following items may be classified as operating or financing activities under IFRS except

Multiple Choice Question 165<br />

The current assets of Orangatte Company are \$227,500. The current liabilities are \$130,000. The current<br />

ratio expressed as a proportion is<br />

Multiple Choice Question 41<br />

All of the following requirements about internal controls were enacted under the Sarbanes Oxley Act of<br />

2002 except:<br />

Explanation: Redundant controls are actually a good thing because they help close potential auditing<br />

loopholes.<br />

Multiple Choice Question 85<br />

Which of the following is not an internal control activity for cash?<br />

Multiple Choice Question 92<br />

Before a check authorization is issued, the following documents must be in agreement, except for the<br />

receiving report.<br />

invoice.<br />

purchase order.<br />

Multiple Choice Question 115<br />

Mitchell Corporation bought equipment on January 1, 2014 .The equipment cost \$180,000 and had an<br />

expected salvage value of \$30,000. The life of the equipment was estimated to be 6 years. The book<br />

value of the equipment at the beginning of the third year would be<br />

Explanation: Depreciation would be 25K per year, thus 130K at the beginning of year 3.<br />

Multiple Choice Question 142<br />

Brevard Corporation purchased a taxicab on January 1, 2013 for \$25,500 to use for its shuttle business.<br />

The cab is expected to have a five-year useful life and no salvage value. During 2014, it retouched the<br />

cab's paint at a cost of \$1,200, replaced the transmission for \$3,000 (which extended its life by an<br />

additional 2 years), and tuned-up the motor for \$150. If Brevard Corporation uses straight-line<br />

depreciation, what annual depreciation will Brevard report for 2014?<br />

Multiple Choice Question 164<br />

On July 1, 2014, Fleming Company sells machinery for \$120,000. The machinery originally cost<br />

\$300,000, had an estimated 5-year life and an expected salvage value of \$50,000. The Accumulated<br />

Depreciation account had a balance of \$175,000 on January 1, 2014, using the straight-line method. The<br />

gain or loss on disposal is<br />

Multiple Choice Question 180<br />

On July 1, 2014, Linden Company purchased the copyright to Norman Computer Tutorials for \$140,000.<br />

It is estimated that the copyright will have a useful life of 5 years. The amount of Amortization Expense<br />

recognized for the year 2014 would be<br />

Multiple Choice Question 120<br />

The following totals for the month of April were taken from the payroll records of Metz Company.<br />

Salaries \$30,000<br />

FICA taxes withheld 2,295

Income taxes withheld 6,600<br />

Medical insurance deductions 1,200<br />

Federal unemployment taxes 240<br />

State unemployment taxes 1,500<br />

The entry to record accrual of employer’s payroll taxes would include a<br />

Multiple Choice Question 242<br />

Thayer Company purchased a building on January 2 by signing a long-term \$2,520,000 mortgage with<br />

monthly payments of \$23,100. The mortgage carries an interest rate of 10 percent. The amount owed on<br />

the mortgage after the first payment will be<br />

Multiple Choice Question 96<br />

The following data is available for BOX Corporation at December 31, 2014:<br />

Common stock, par \$10 (authorized 30,000 shares) \$250,000<br />

Treasury stock (at cost \$15 per share) \$1,200<br />

Based on the data, how many shares of common stock are outstanding?<br />

Multiple Choice Question 144<br />

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet<br />

sections:<br />

Total Assets Total Liabilities Total Stockholders' Equity<br />

Multiple Choice Question 102<br />

Assume the following cost of goods sold data for a company:<br />

If 2013 is the base year, what is the percentage increase in cost of goods sold from 2013 to 2015?<br />

Multiple Choice Question 179<br />

A company has an average inventory on hand of \$75,000 and its average days in inventory is 36.5 days.<br />

What is the cost of goods sold?<br />

Multiple Choice Question 199<br />

The following information is available for Patterson Company:<br />

2014 2013<br />

Accounts receivable \$ 360,000 \$ 340,000<br />

Inventory 280,000 320,000<br />

Net credit sales 3,000,000 2,600,000<br />

Cost of goods sold 1,500,000 840,000<br />

Net income 300,000 170,000<br />

The accounts receivable turnover for 2014 is<br />

Multiple Choice Question 221<br />

All of the following situations below might indicate a company has a low quality of earnings except<br />

A lack of disclosure about guaranteed payments that were mentioned in the MD&A of the annual report.

Maintenance costs are capitalized and then depreciated.<br />

Revenue is recognized when earned.<br />

Adoption of a different inventory method for each of the last three years.<br />

IFRS Multiple Choice Question 05<br />

IFRS