ACC 305 ACC305 FINAL EXAM ANSWERS (SNHU)
ACC 305 ACC/305 ACC305 FINAL EXAM (SNHU)
1) Sampson Co.'s accounting records show the following at the year ending on December 31, 2011:
2) Powers Co. has the following account balances:
3) Under a periodic inventory system, acquisition of merchandise is debited to the
4) Lee Industries had the following inventory transactions occur during 2011:
5) Kershaw Bookstore had 600 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows:
6) Graham Co. uses a periodic inventory system. Details for the inventory account for the month of January 2011 are as follows:
An end of January 2011 inventory showed that 180 units were on hand. If the company uses FIFO, what is the value of the ending inventory?
7) A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000. The amounts reflected in the current end of the period balance sheet are the following:
8) If beginning inventory is understated by $10,000, the effect of this error in the current period is the following:
9) Understating beginning inventory will understate
10) An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $2,000 debit balance, the adjustment to record bad debts for the period will require a
11) Hahn Co. uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Co. make to record the bad debts expense?
12) A customer charges a treadmill at Dave’s Sports. The price is $1,000 and the financing charge is 9% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account. What is the amount of the finance charge?
13) On July 1, 2011, Hale Kennels sells equipment for $66,000. The equipment originally cost $180,000, had an estimated 5-year life and an expected salvage value of $30,000. The accumulated depreciation account had a balance of $105,000 on January 1, 2011, using the straight-line method. The gain or loss on disposal is
14) A truck that cost $21,000 and on which $10,000 of accumulated depreciation has been recorded was disposed of for $9,000 cash. The entry to record this event would include a
15) Yanik Co.'s delivery truck, which originally cost $56,000, was destroyed by fire. At the time of the fire, the balance of the Accumulated Depreciation account amounted to $38,000. The company received $32,000 reimbursement from its insurance company. The gain or loss because of the fire was
16) Equipment was purchased for $90,000. Freight charges amounted to $4,200 and there was a cost of $12,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $18,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be
17) A company purchased factory equipment for $350,000. It is estimated that the equipment will have a $35,000 salvage value at the end of its estimated 5-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
18) A truck was purchased for $120,000 and it was estimated to have a $24,000 salvage value at the end of its useful life. Monthly depreciation expense of $2,000 was recorded using the straight-line method. The annual depreciation rate is
19) The entry to record the payment of an interest-bearing note at maturity after all interest expense has been recognized is the following:
20) On October 1, a carpet service borrows $400,000 from First National Bank on a 3-month, $400,000, 8% note. What entry must Steve's Carpet Service make on December 31 before financial statements are prepared?
21) Admire County Bank agrees to lend Givens Brick Co. $300,000 on January 1. Givens Brick Co. signs a $300,000, 8%, 9-month note. What entry will Givens Brick Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?
22) Presented here is a partial amortization schedule for Courtney Co. which sold $200,000, 5-year, 10% bonds on January 1, 2011 for $208,000 and uses annual straight-line amortization.
23) Herman Co. received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semiannually on June 30 and December 31, and have a call price of $101.00. Herman uses the straight-line method of amortization. What is the amount of interest Herman must pay the bondholders in 2011?
24) Presented here is a partial amortization schedule for Courtney Co. which sold $200,000, 5-year, 10% bonds on January 1, 2011 for $208,000 and uses annual straight-line amortization.
25) Which of the following terms are NOT considered a disadvantage of the corporate form of organization?
26) A typical organization chart showing delegation of authority would show
27) Which of the following statements reflects the transferability of ownership rights in a corporation?
28) Cuther, Inc. has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2010 and December 31, 2011. The board of directors declared and paid a $2,000 dividend in 2010. In 2011, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2011?
29) Outstanding stock of the Abel Corp. included 20,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par noncumulative preferred stock. In 2010, Abel declared and paid dividends of $4,000. In 2011, Abel declared and paid dividends of $12,000. How much of the 2011 dividend was distributed to preferred shareholders?
30) Municiple, Inc. has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2011. If the board of directors declares a $200,000 dividend, the
31) When preferred stock is cumulative, preferred dividends not declared in a period are
32) Venco Corp.'s December 31, 2010 balancesheet showed the following
33) Cole Corp. issues 10,000 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 $600,000 and a credit or credits to
34) Ephram Co. has 3,000 shares of 5%, $100 par noncumulative preferred stock outstanding at December 31, 2011. No dividends have been paid on this stock for 2010 or 2011. Dividends in arrears at December 31, 2011 total
35) Slaton Co. originally issued 3,000 shares of $10 par value common stock for $90,000 ($30 per share). Slaton subsequently purchases 300 shares of treasury stock for $27 per share and resells the 300 shares of treasury stock for $29 per share. In the entry to record the sale of the treasury stock, there will be a
36) Rancho Corp. sold 200 shares of treasury stock for $40 per share. The cost for the shares was $30. The entry to record the sale will include a
37) Buster Co. reported a net loss of $6,000 for the year ended December 31, 2011. During the year, accounts receivable increased $14,000, merchandise inventory decreased $10,000, accounts payable decreased by $20,000, and depreciation expense of $10,000 was recorded. During 2011, operating activities
38) During 2011, Unruh Co. had $160,000 in cash sales and $1,200,000 in credit sales. The accounts receivable balances were $180,000 and $212,000 at December 31, 2010 and 2011 respectively. Using the direct method of reporting cash flows from operating activities, what was the total cash collected from all customers during 2011?
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