Solved by verified expert :ACC 291 Final Exam
1. On January 1, a machine with a useful life of five
years and a residual value of $40,000 was purchased for $120,000. What is the
depreciation expense for year 2 under the double-declining-balance method of
2. As a recent graduate of State University you’re
aware that IFRS requires component depreciation for plant assets. A friend has
asked you to succinctly explain what component depreciation means. Which of the
following correctly describes component depreciation?
3. Given the following account balances at year end,
compute the total intangible assets on the balance sheet of Janssen
4. Bonds with a face value of $300,000 and a quoted
price of 97¼ have a selling price of
5. Sparks Company received proceeds of $423,000 on
10-year, 8% bonds issued on January 1, 2013. The 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 January 1, 2015?
6. S. Lawyer performed legal services for E. Corp. Due
to a cash shortage, an agreement was reached whereby E. Corp. would pay S.
Lawyer a legal fee of approximately $15,000 by issuing 8,000 shares of its
common stock (par $1). The stock trades on a daily basis and the market price
of the stock on the day the debt was settled is $1.80 per share. Given this
information, the best journal entry for E. Corp. to record for this transaction
7. Logan Corporation issues 50,000 shares of $50 par
value preferred stock for cash at $60 per share. The entry to record the
transaction will consist of a debit to Cash for $3,000,000 and a credit or
8. Jahnke Corporation issued 8,000 shares of €2 par
value ordinary shares for €11 per share. The journal entry to record the sale
8. Zoum Corporation had the following transactions
$125,000 of par value common stock for cash.
and paid wages expense of $60,000.
land by issuing common stock of par value $50,000.
and paid a cash dividend of $10,000.
5. Sold a
long-term investment (cost $3,000) for cash of $3,000.
cash sales of $400,000.
inventory for cash of $160,000.
an investment in Zynga stock for cash of $21,000.
bonds payable to common stock in the amount of $500,000.
10. Repaid a
6 year note payable in the amount of $220,000.
What is the net cash provided by financing activities?
9. Colie Company had an increase in inventory of
$120,000. The cost of goods sold was $490,000. There was a $30,000 decrease in
accounts payable from the prior period. Using the direct method of reporting
cash flows from operating activities, what were Colie’s cash payments to
10. Each of the following items may be classified as
operating or financing activities under IFRS except
11. The current assets of Orangatte Company are
$227,500. The current liabilities are $130,000. The current ratio expressed as
a proportion is
12. All of the following requirements about internal
controls were enacted under the Sarbanes Oxley Act of 2002 except:
13. Which of the following is not an internal control
activity for cash?
14. Before a check authorization is issued, the
following documents must be in agreement, except for the
15. Mitchell Corporation bought equipment on January
1, 2014 .The equipment cost $180,000 and had an expected salvage value of
$30,000. The life of the equipment was estimated to be 6 years. The book value
of the equipment at the beginning of the third year would be
16. Brevard Corporation purchased a taxicab on January
1, 2013 for $25,500 to use for its shuttle business. The cab is expected to
have a five-year useful life and no salvage value. During 2014, it retouched
the cab’s paint at a cost of $1,200, replaced the transmission for $3,000
(which extended its life by an additional 2 years), and tuned-up the motor for
$150. If Brevard Corporation uses straight-line depreciation, what annual
depreciation will Brevard report for 2014?
17. On July 1, 2014, Fleming Company sells machinery
for $120,000. The machinery originally cost $300,000, had an estimated 5-year
life and an expected salvage value of $50,000. The Accumulated Depreciation account
had a balance of $175,000 on January 1, 2014, using the straight-line method.
The gain or loss on disposal is
18. On July 1, 2014, Linden Company purchased the
copyright to Norman Computer Tutorials for $140,000. It is estimated that the
copyright will have a useful life of 5 years. The amount of Amortization
Expense recognized for the year 2014 would be
19. The following totals for the month of April were
taken from the payroll records of Metz Company.
FICA taxes withheld 2,295
Income taxes withheld 6,600
Medical insurance deductions1,200
Federal unemployment taxes 240
State unemployment taxes 1,500
The entry to record accrual of employer’s payroll
taxes would include a
19. Thayer Company purchased a building on January 2
by signing a long-term $2,520,000 mortgage with monthly payments of $23,100.
The mortgage carries an interest rate of 10 percent. The amount owed on the
mortgage after the first payment will be
20. The following data is available for BOX
Corporation at December 31, 2014:
Common stock, par $10 (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
21. Indicate the respective effects of the declaration
of a cash dividend on the following balance sheet sections:
Total Assets Total
Liabilities Total Stockholders’
22. Assume the following cost of goods sold data for a
If 2013 is the base year, what is the percentage
increase in cost of goods sold from 2013 to 2015?
23. A company has an average inventory on hand of
$75,000 and its average days in inventory is 36.5 days. What is the cost of
24. The following information is available for
Accounts receivable $ 360,000 $ 340,000
Inventory 280,000 320,000
Net credit sales 3,000,000 2,600,000
Cost of goods sold 1,500,000 840,000
Net income 300,000 170,000
The accounts receivable turnover for 2014 is
25. All of the following situations below might
indicate a company has a low quality of earnings except
A lack of disclosure about guaranteed payments that
were mentioned in the MD&A of the annual report.