CH6-11r
47 Pages

CH6-11r

Course Number: ACCOUNTING 3321, Spring 2011

College/University: Texas Pan American

Word Count: 12461

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21. Which of the following transactions would require the use of the present value of an annuity due concept in order to calculate the present value of the asset obtained or liability owed at the date of incurrence? a. A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement. 22. Which of the following tables would show the smallest value for an interest rate of...

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of 21. Which the following transactions would require the use of the present value of an annuity due concept in order to calculate the present value of the asset obtained or liability owed at the date of incurrence? a. A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement. 22. Which of the following tables would show the smallest value for an interest rate of 5% for six periods? b. Present value of 1 23. Which table would you use to determine how much you would need to have deposited three years ago at 10% compounded annually in order to have $1,000 today? a. Future value of 1 or present value of 1 24. Which table would you use to determine how much must be deposited now in order to provide for 5 annual withdrawals at the beginning of each year, starting one year hence? d. None of these 25. Which table has a factor of 1.00000 for 1 period at every interest rate? c. Future value of an ordinary annuity of 1 26. Which table would show the largest factor for an interest rate of 8% for five periods? c. Future value of an annuity due of 1 27. Which of the following tables would show the smallest factor for an interest rate of 10% for six periods? b. Present value of an ordinary annuity of 1 28. The figure .94232 is taken from the column marked 2% and the row marked three periods in a certain interest table. From what interest table is this figure taken? c. Present value of 1 S 29. Which of the following tables would show the largest value for an interest rate of 10% for 8 periods? c. Future amount of an ordinary annuity of 1 table. S 30. On June 1, 2006, Walsh Company sold some equipment to Fischer Company. The two companies entered into an installment sales contract at a rate of 8%. The contract required 8 equal annual payments with the first payment due on June 1, 2006. What type of compound interest table is appropriate for this situation? a. Present value of an annuity due of 1 table. S 31. Which of the following transactions would best use the present value of an annuity due of 1 table? a. Diamond Bar, Inc. rents a truck for 5 years with annual rental payments of $20,000 to be made at the beginning of each year. P 32. A series of equal receipts at equal intervals of time when each receipt is received at the beginning of each time period is called an c. annuity due. P 33. In the time diagram below, which concept is being depicted? 0 1 $1 2 $1 3 $1 4 $1 a. Present value of an ordinary annuity P 34. On December 1, 2007, Michael Hess Company sold some machinery to Shawn Keling Company. The two companies entered into an installment sales contract at a predetermined interest rate. The contract required four equal annual payments with the first payment due on December 1, 2007, the date of the sale. What present value concept is appropriate for this situation? d. Present value of an annuity due of 1 for four periods. 35. An amount is deposited for eight years at 8%. If compounding occurs quarterly, then the table value is found at d. 2% for 32 periods. 36.If the number of periods is known, the interest rate is determined by a. dividing the future value by the present value and looking for the quotient in the future value of 1 table. 37. Present value is d. all of these. P 38. Which of the following statements is true? c. If money is worth 10% compounded annually, $1,100 due one year from today is equivalent to $1,000 today. P 39 If the interest rate is 10%, the factor for the future value of annuity due of 1 for n = 5, i = 10% is equal to the factor for the future value of an ordinary annuity of 1 for n = 5, i = 10% c. multiplied by 1.10. 40. Which of the following is true? c. Rents occur at the beginning of each period of an annuity due. 41. Which statement is false? b. The factor for the present value of an annuity due is found by multiplying the ordinary annuity table value by one minus the interest rate. . 42. c. Ed Sloan wants to withdraw $20,000 (including principal) from an investment fund at the end of each year for five years. How should he compute his required initial investment at the beginning of the first year if the fund earns 10% compounded annually?. $20,000 times the present value of a 5-year, 10% ordinary annuity of 1. 43. Ann Ruth wants to invest a certain sum of money at the end of each year for five years. The investment will earn 6% compounded annually. At the end of five years, she will need a total of $40,000 accumulated. How should she compute her required annual invest-ment? b. $40,000 divided by the future value of a 5-year, 6% ordinary annuity of 1. 44. An accountant wishes to find the present value of an annuity of $1 payable at the beginning of each period at 10% for eight periods. The accountant has only one present value table which shows the present value of an annuity of $1 payable at the end of each period. To compute the present value, the accountant would use the present value factor in the 10% column for b. eight periods and multiply by (1 + .10). 45. If an annuity due and an ordinary annuity have the same number of equal payments and the same interest rates, then b. the present value of the annuity due is greater than the present value of the ordinary annuity. 46. Which of the following is false? d. If the first rent is received at the end of the sixth period, it means the ordinary annuity is deferred for six periods. 47. If a savings account pays interest at 4% compounded quarterly, then the amount of $1 left on deposit for 8 years would be found in a table using d. 32 periods at 1%. PeriodsFuture Value of 1 at 8% 1 1.080 2 1.166 3 1.260 4 1.360 5 1.469 48. What amount should be deposited in a bank account today to grow to $10,000 three years from today? c. $10,000 1.260 49. If $3,000 is put in a savings account today, what amount will be available three years from today? b. $3,000 1.260 50. 51. What amount will be in a bank account three years from now if $6,000 is invested each year for four years with the first investment to be made today? a. ($6,000 1.260) + ($6,000 1.166) + ($6,000 1.080) + $6,000 If $4,000 is put in a savings account today, what amount will be available six years from now? b. $4,000 1.080 1.469 Present Value of $1 PeriodsDiscounted at 10% per Period 1 2 3 4 5 0.909 0.826 0.751 0.683 0.621 52. If an individual put $4,000 in a savings account today, what amount of cash would be available two years from today? c. $4,000 0.826 53. What is the present value today of $6,000 to be received six years from today? c. $6,000 0.621 0.909 54. What amount should be deposited in a bank today to grow to $3,000 three years from today? d. $3,000 0.751 55. What amount should an individual have in a bank account today before withdrawal if $5,000 is needed each year for four years with the first withdrawal to be made today and each subsequent withdrawal at one-year intervals? (The balance in the bank account should be zero after the fourth withdrawal.) a. $5,000 + ($5,000 0.909) + ($5,000 0.826) + ($5,000 0.751) 56. At the end of two years, what will be the balance in a savings account paying 6% annually if $5,000 is deposited today? The future value of one at 6% for one period is 1.06. d. $5,618 57. Windsor Company will receive $100,000 in 7 years. If the appropriate interest rate is 10%, the present value of the $100,000 receipt is b. $51,316. 58. Sheeley Company will receive $100,000 in a future year. If the future receipt is discounted at an interest rate of 10%, its present value is $51,316. In how many years is the $100,000 received? c. 7 years 59. Jensen Company will invest $200,000 today. The investment will earn 6% for 5 years, with no funds withdrawn. In 5 years, the amount in the investment fund is c. $267,646. . 60. Finley Company will receive $500,000 in 7 years. If the appropriate interest rate is 10%, the present value of the $500,000 receipt is b. $256,580. 61. Swanson Company will receive $100,000 in a future year. If the future receipt is discounted at an interest rate of 8%, its present value is $63,017. In how many years is the $100,000 received? b. 6 years 62. Jasper Company will invest $300,000 today. The investment will earn 6% for 5 years, with no funds withdrawn. In 5 years, the amount in the investment fund is c. $401,469. 63. Quincey Corporation makes an investment today (January 1, 2006). They will receive $10,000 every December 31st for the next six years (2006 2011). If Quincey wants to earn 12% on the investment, what is the most they should invest on January 1, 2006? a. $41,114. 64. Craig Rusch Corporation will receive $10,000 today (January 1, 2006), and also on each January 1st for the next five years (2007 2011). What is the present value of the six $10,000 receipts, assuming a 12% interest rate? b. $46,048. 65.Schmitt Corporation will invest $10,000 every December 31st for the next six years (2006 2011). If Schmitt will earn 12% on the investment, what amount will be in the investment fund on December 31, 2011? c. $81,152. 66. Linton Corporation will invest $10,000 every January 1st for the next six years (2006 2011). If Linton will earn 12% on the investment, what amount will be in the investment fund on December 31, 2011? d. $90,890. 67. Gorman Corporation makes an investment today (January 1, 2006). They will receive $20,000 every December 31st for the next six years (2006 2011). If Gorman wants to earn 12% on the investment, what is the most they should invest on January 1, 2006? a. $82,228. 68. Renfro Corporation will receive $20,000 today (January 1, 2006), and also on each January 1st for the next five years (2007 2011). What is the present value of the six $20,000 receipts, assuming a 12% interest rate.? b. $92,096. 69. Pedigo Corporation will invest $30,000 every December 31st for the next six years (2006 2011). If Pedigo will earn 12% on the investment, what amount will be in the investment fund on December 31, 2011? c. $243,456. 70. Wagner Corporation will invest $25,000 every January 1st for the next six years (2006 2011). If Wagner will earn 12% on the investment, what amount will be in the investment fund on December 31, 2011? d. $227,225. 71.On January 1, 2007, Carly Company decided to begin accumulating a fund for asset replacement five years later. The company plans to make five annual deposits of $50,000 at 9% each January 1 beginning in 2007. What will be the balance in the fund, within $10, on January 1, 2012 (one year after the last deposit)? The following 9% interest factors may be used. Present Value of Future Value of Ordinary Annuity Ordinary Annuity 4 periods 3.2397 4.5731 5 periods 3.8897 5.9847 6 periods 4.4859 7.5233 a. $326,166 Use the following 8% interest factors for questions 72 through 75. Present Value of Future Value of Ordinary Annuity Ordinary Annuity 7 periods 5.2064 8 periods 5.7466 9 periods 6.2469 8.92280 10.63663 12.48756 72. What will be the balance on September 1, 2013 in a fund which is accumulated by making $8,000 annual deposits each September 1 beginning in 2006, with the last deposit being made on September 1, 2013? The fund pays interest at 8% compounded annually. a. $85,093 73. If $5,000 is deposited annually starting on January 1, 2007 and it earns 8%, what will the balance be on December 31, 2014? d. $57,438 74. Henson Company wishes to accumulate $300,000 by May 1, 2015 by making 8 equal annual deposits beginning May 1, 2007 to a fund paying 8% interest compounded annually. What is the required amount of each deposit? c. $26,115 75.What amount should be recorded as the cost of a machine purchased December 31, 2006, which is to be financed by making 8 annual payments of $6,000 each beginning December 31, 2007? The applicable interest rate is 8%. d. $34,480 76. How much must be deposited on January 1, 2007 in a savings account paying 6% annually in order to make annual withdrawals of $20,000 at the end of the years 2007 and 2008? The present value of one at 6% for one period is .9434. a. $36,668 77. How much must be invested now to receive $10,000 for 15 years if the first $10,000 is received today and the rate is 9%? Present Value of PeriodsOrdinary Annuity at 9% 14 7.78615 15 8.06069 16 8.31256 b. $87,862 78. Foley Company financed the purchase of a machine by making payments of $18,000 at the end of each of five years. The appropriate rate of interest was 8%. The future value of one for five periods at 8% is 1.46933. The future value of an ordinary annuity for five periods at 8% is 5.8666. The present value of an ordinary annuity for five periods at 8% is 3.99271. What was the cost of the machine to Foley? b. $71,869 79. A machine is purchased by making payments of $5,000 at the beginning of each of the next five years. The interest rate was 10%. The future value of an ordinary annuity of 1 for five periods is 6.10510. The present value of an ordinary annuity of 1 for five periods is 3.79079. What was the cost of the machine? c. $20,849 80. Catt Co. has a machine that cost $200,000. It is to be leased for 20 years with rent received at the beginning of each year. Catt wants a return of 10%. Calculate the amount of the annual rent. Present Value of PeriodOrdinary Annuity 19 8.36492 20 8.51356 21 8.64869 a. $21,356 81. Find the present value of an investment in plant and equipment if it is expected to provide annual earnings of $21,000 for 15 years and to have a resale value of $40,000 at the end of that period. Assume a 10% rate and earnings at year end. The present value of 1 at 10% for 15 periods is .23939. The present value of an ordinary annuity at 10% for 15 periods is 7.60608. The future value of 1 at 10% for 15 periods is 4.17725. b. $169,303 82. On January 2, 2007, Yenn Corporation wishes to issue $2,000,000 (par value) of its 8%, 10-year bonds. The bonds pay interest annually on January 1. The current yield rate on such bonds is 10%. Using the interest factors below, compute the amount that Yenn will realize from the sale (issuance) of the bonds. Present value of 1 at 8% for 10 periods Present value of 1 at 10% for 10 periods Present value of an ordinary annuity at 8% for 10 periods Present value of an ordinary annuity at 10% for 10 periods 0.4632 0.3855 6.7101 6.1446 b. $1,754,136 Note: Students must be given interest tables for question 83. 83. The market price of a $200,000, ten-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10% is b. $224,925. 84. On January 1, 2007, Nott Co. sold to Day Corp. $400,000 of its 10% bonds for $354,118 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Nott report as interest expense for the six months ended June 30, 2007? c. $21,247 85. On May 1, 2007, a company purchased a new machine which it does not have to pay for until May 1, 2009. The total payment on May 1, 2009 will include both principal and interest. Assuming interest at a 10% rate, the cost of the machine would be the total payment multiplied by what time value of money factor? d. Present value of 1 86. On January 1, 2007, Abel Co. exchanged equipment for a $160,000 noninterest-bearing note due on January 1, 2010. The prevailing rate of interest for a note of this type at January 1, 2007 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Abel's 2008 income statement? c. $13,200 87. For which of the following transactions would the use of the present value of an ordinary annuity concept be appropriate in calculating the present value of the asset obtained or the liability owed at the date of incurrence? a. A capital lease is entered into with the initial lease payment due one month subsequent to the signing of the lease agreement. 88. On January 15, 2007, Flynn Corp. adopted a plan to accumulate funds for environmental improvements beginning July 1, 2011, at an estimated cost of $4,000,000. Flynn plans to make four equal annual deposits in a fund that will earn interest at 10% compounded annually. The first deposit was made on July 1, 2007. Future value factors are as follows: Future value of 1 at 10% for 5 periods Future value of ordinary annuity of 1 at 10% for 4 periods Future value of annuity due of 1 at 10% for 4 periods Flynn should make four annual deposits of b. $782,779. 1.61 4.64 5.11 89. On December 30, 2007, Cey, Inc. purchased a machine from Frank Corp. in exchange for a noninterest-bearing note requiring eight payments of $50,000. The first payment was made on December 30, 2007, and the others are due annually on December 30. At date of issuance, the prevailing rate of interest for this type of note was 11%. Present value factors are as follows: Present Value of Ordinary Present Value of PeriodAnnuity of 1 at 11%Annuity Due of 1 at 11% 7 4.712 5.231 8 5.146 5.712 On Cey's December 31, 2007 balance sheet, the net note payable to Frank is a. $235,600. 90. On January 1, 2007, Lex Co. sold goods to Eaton Company. Eaton signed a noninterestbearing note requiring payment of $80,000 annually for seven years. The first payment was made on January 1, 2007. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows: Present Value Periodof 1 at 10% 6 7 Present Value of Ordinary Annuity of 1 at 10% .5645 .5132 4.3553 4.8684 Lex should record sales revenue in January 2007 of a. $428,419. 91. On January 1, 2007, Grant Co. issued ten-year bonds with a face amount of $2,000,000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows: At 8% At 10% Present value of 1 for 10 periods 0.463 0.386 Present value of an ordinary annuity of 1 for 10 periods 6.710 6.145 The total issue price of the bonds was d. $1,755,200. 92. On July 1, 2007, Ed Vance signed an agreement to operate as a franchisee of Kwik Foods, Inc., for an initial franchise fee of $180,000. Of this amount, $60,000 was paid when the agreement was signed and the balance is payable in four equal annual payments of $30,000 beginning July 1, 2008. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. Vance's credit rating indicates that he can borrow money at 14% for a loan of this type. Information on present and future value factors is as follows: Present value of 1 at 14% for 4 periods Future value of 1 at 14% for 4 periods Present value of an ordinary annuity of 1 at 14% for 4 periods Vance should record the acquisition cost of the franchise on July 1, 2007 at b. $147,300. 0.59 1.69 2.91 21. Which of the following is not considered cash for financial reporting purposes? d. Postdated checks and I.O.U.'s 22. Which of the following is considered cash? b. Money market checking accounts 23. Travel advances should be reported as d. none of these. P 24. Which of the following items should not be included in the Cash caption on the balance sheet? d. Postage stamps on hand S 25. A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and d. is so near its maturity that it presents insignificant risk of changes in interest rates. 26.Bank overdrafts, if material, should be d. reported as a current liability. 27. Deposits held as compensating balances d. none of these. 28.The category "trade receivables" includes d. none of these. 29. Which of the following should be recorded in Accounts Receivable? d. None of these S 30. What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet? c. As assets but separately from other receivables. S 31. When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called a(n) d. cash discount. P 32. Trade discounts are d. all of the above. 33. If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as a. a deduction from sales in the income statement. Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because c. the amount of the discount is not material. 34. 35.Which of the following methods of determining bad debt expense does not properly match expense and revenue? d. Charging bad debts as accounts are written off as uncollectible. 36. Which of the following methods of determining annual bad debt expense best achieves the matching concept? a. Percentage of sales 37. Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense? b. A percentage of sales not adjusted for the balance in the allowance 38. The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach a. gives a reasonably correct statement of receivables in the balance sheet. 39. At the beginning of 2006, Finney Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equivalent notes was 8% at that time. Finney reported this note as a $1,000 trade note receivable on its 2006 year-end statement of financial position and $1,000 as sales revenue for 2006. What effect did this accounting for the note have on Finney's net earnings for 2006, 2007, 2008, and its retained earnings at the end of 2008, respectively? d. None of these 40. Which of the following is true when accounts receivable are factored without recourse? c. The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables. 41. Which of the following statements is incorrect regarding the classification of accounts and notes receivable? c. Any discount or premium resulting from the determination of present value in notes receivable transactions is an asset or liability respectively. S 42. Of the following conditions, which is the only one that is not required if the transfer of receivables with recourse is to be accounted for as a sale? a. The transferor is obligated to make a genuine effort to identify those receivables that are uncollectible. P 43. The accounts receivable turnover ratio measures the a. number of times the average balance of accounts receivable is collected during the period. 44. The accounts receivable turnover ratio is computed by dividing d. net sales by average net receivables. *45. Which of the following is not true? c. The Petty Cash account is debited when the fund is replenished. 46.A Cash Over and Short account c. is debited when the petty cash fund proves out short. *47. The journal entries for a bank reconciliation b. may include a debit to Office Expense for bank service charges. *48. When preparing a bank reconciliation, bank credits are c. added to the balance per books. 49. On January 1, 2007, Mann Company borrows $2,000,000 from National Bank at 11% annual interest. In addition, Mann is required to keep a compensatory balance of $200,000 on deposit at National Bank which will earn interest at 5%. The effective interest that Mann pays on its $2,000,000 loan is d. 11.6%. 50. Hamilton Company has cash in bank of $10,000, restricted cash in a separate account of $3,000, and a bank overdraft in an account at another bank of $1,000. Hamilton should report cash of b. $10,000. 51. Horvath Company has the following items at year-end: Cash in bank Petty cash Short-term paper with maturity of 2 months Postdated checks $20,000 300 5,500 1,400 Horvath should report cash and cash equivalents of c. $25,800. 52. Marshell Company has cash in bank of $15,000, restricted cash in a separate account of $4,000, and a bank overdraft in an account at another bank of $2,000. Marshell should report cash of b. $15,000. 53. Peterson Company has the following items at year-end: Cash in bank Petty cash Short-term paper with maturity of 2 months Postdated checks $30,000 500 8,200 2,100 Peterson should report cash and cash equivalents of c. $38,700. 54. If a company purchases merchandise on terms of 1/10, n/30, the cash discount available is equivalent to what effective annual rate of interest (assuming a 360-day year)? c. 18% 55. At the close of its first year of operations, December 31, 2007, Linn Company had accounts receivable of $540,000, after deducting the related allowance for doubtful accounts. During 2007, the company had charges to bad debt expense of $90,000 and wrote off, as uncollectible, accounts receivable of $40,000. What should the company report on its balance sheet at December 31, 2007, as accounts receivable before the allowance for doubtful accounts? b. $590,000 56. Before year-end adjusting entries, Bass Company's account balances at December 31, 2007, for accounts receivable and the related allowance for uncollectible accounts were $600,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is b. $537,500. 57. During the year, Jantz Company made an entry to write off a $4,000 uncollectible account. Before this entry was made, the balance in accounts receivable was $50,000 and the balance in the allowance account was $4,500. The net realizable value of accounts receivable after the write-off entry was d. $45,500. 58. The following information is available for Reagan Company: Allowance for doubtful accounts at December 31, 2006 Credit sales during 2007 Accounts receivable deemed worthless and written off during 2007 $ 8,000 400,000 9,000 As a result of a review and aging of accounts receivable in early January 2008, however, it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2007. What amount should Reagan record as "bad debt expense" for the year ended December 31, 2007? c. $6,500 A trial balance before adjustments included the following: Debit Sales Sales returns and allowance Accounts receivable Allowance for doubtful accounts 59. Credit $425,000 $14,000 43,000 760 If the estimate of uncollectibles is made by taking 2% of net sales, the amount of the adjustment is b. $8,220. 60. If the estimate of uncollectibles is made by taking 10% of gross account receivables, the amount of the adjustment is a. $3,540. 61. Simpson Company has the following account balances at year-end: Accounts receivable Allowance for doubtful accounts Sales discounts $60,000 3,600 2,400 Simpson should report accounts receivable at a net amount of b. $56,400. 62. Holtzman Corporation had a 1/1/07 balance in the Allowance for Doubtful Accounts of $10,000. During 2007, it wrote off $7,200 of accounts and collected $2,100 on accounts previously written off. The balance in Accounts Receivable was $200,000 at 1/1 and $240,000 at 12/31. At 12/31/07, Holtzman estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2007? b. $7,100. 63. Rusch Corporation had a 1/1/07 balance in the Allowance for Doubtful Accounts of $12,000. During 2007, it wrote off $8,640 of accounts and collected $2,520 on accounts previously written off. The balance in Accounts Receivable was $240,000 at 1/1 and $288,000 at 12/31. At 12/31/07, Rusch estimates that 5% of accounts receivable will prove to be uncollectible. What should Rusch report as its Allowance for Doubtful Accounts at 12/31/07? d. $14,400. 64. Sandler Company has the following account balances at year-end: Accounts receivable Allowance for doubtful accounts Sales discounts $80,000 4,800 3,200 Sandler should report accounts receivable at a net amount of b. $75,200. 65.Delgado Corporation had a 1/1/07 balance in the Allowance for Doubtful Accounts of $20,000. During 2007, it wrote off $14,400 of accounts and collected $4,200 on accounts previously written off. The balance in Accounts Receivable was $400,000 at 1/1 and $480,000 at 12/31. At 12/31/07, Delgado estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2007? b. $14,200. 66. Burnett Corporation had a 1/1/07 balance in the Allowance for Doubtful Accounts of $15,000. During 2007, it wrote off $10,800 of accounts and collected $3,150 on accounts previously written off. The balance in Accounts Receivable was $300,000 at 1/1 and $360,000 at 12/31. At 12/31/07, Burnett estimates that 5% of accounts receivable will prove to be uncollectible. What should Burnett report as its Allowance for Doubtful Accounts at 12/31/07? d. $18,000. 67. Marley Company received a seven-year zero-interest-bearing note on February 22, 2007, in exchange for property it sold to ORear Company. There was no established exchange price for this property and the note has no ready market. The prevailing rate of interest for a note of this type was 7% on February 22, 2007, 7.5% on December 31, 2007, 7.7% on February 22, 2008, and 8% on December 31, 2008. What interest rate should be used to calculate the interest revenue from this transaction for the years ended December 31, 2007 and 2008, respectively? b. 7% and 7% 68. On December 31, 2007, Eller Corporation sold for $75,000 an old machine having an original cost of $135,000 and a book value of $60,000. The terms of the sale were as follows: $15,000 down payment $30,000 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2007 rounded to the nearest dollar? (The present value of an ordinary annuity of 1 at 9% for 2 years is 1.75911.) a. $52,773. Henry Co. assigned $400,000 of accounts receivable to Easy Finance Co. as security for a loan of $335,000. Easy charged a 2% commission on the amount of the loan; the interest rate on the note was 10%. During the first month, Henry collected $110,000 on assigned accounts after deducting $380 of discounts. Henry accepted returns worth $1,350 and wrote off assigned accounts totaling $2,980. 69. The amount of cash Henry received from Easy at the time of the transfer was c. $328,300. 70. Entries during the first month would include a . c. debit to Allowance for Doubtful Accounts of $2,980. Use the following information for questions 71 and 72. On February 1, 2007, Norton Company factored receivables with a carrying amount of $300,000 to Koch Company. Koch Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Norton Company for February. 71. Assume that Norton factors the receivables on a without recourse basis. The loss to be reported is b. $9,000. 72. Assume that Norton factors the receivables on a with recourse basis. The recourse obligation has a fair value of $1,500. The loss to be reported is b. $10,500. 73. Joe Novak Corporation factored, with recourse, $100,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. Joe Novak estimates the recourse obligation at $2,400. What amount should Joe Novak report as a loss on sale of receivables? c. $5,400. 74. Mortonson Corporation factored, with recourse, $300,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. Mortonson estimates the recourse obligation at $7,200. What amount should Mortonson report as a loss on sale of receivables? c. $16,200. . 75. Mike McKinney Corporation had accounts receivable of $100,000 at 1/1. The only transactions affecting accounts receivable were sales of $600,000 and cash collections of $550,000. The accounts receivable turnover is c. 4.8. 76. Nottingham Corporation had accounts receivable of $100,000 at 1/1. The only transactions affecting accounts receivable were sales of $900,000 and cash collections of $850,000. The accounts receivable turnover is c. 7.2. *77. If a petty cash fund is established in the amount of $250, and contains $150 in cash and $95 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts d. Cash, $100. *78. * If the month-end bank statement shows a balance of $36,000, outstanding checks are $12,000, a deposit of $4,000 was in transit at month end, and a check for $500 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is . b. $28,500. 79.In preparing its bank reconciliation for the month of April 2007, Gregg, Inc. has available the following information. Balance per bank statement, 4/30/07 NSF check returned with 4/30/07 bank statement Deposits in transit, 4/30/07 Outstanding checks, 4/30/07 Bank service charges for April $39,140 450 5,000 5,200 20 What should be the correct balance of cash at April 30, 2007? b. $38,940 *80. Tanner, Inc.s checkbook balance on December 31, 2007 was $21,200. In addition, Tanner held the following items in its safe on December 31. (1) A check for $450 from Peters, Inc. received December 30, 2007, which was not included in the checkbook balance. (2) An NSF check from Garner Company in the amount of $900 that had been deposited at the bank, but was returned for lack of sufficient funds on December 29. The check was to be redeposited on January 3, 2008. The original deposit has been included in the December 31 checkbook balance. (3) Coin and currency on hand amounted to $1,450. The proper amount to be reported on Tanner's balance sheet for cash at December 31, 2007 is c. $22,200. *81. The cash account shows a balance of $45,000 before reconciliation. The bank statement does not include a deposit of $2,300 made on the last day of the month. The bank statement shows a collection by the bank of $940 and a customer's check for $320 was returned because it was NSF. A customer's check for $450 was recorded on the books as $540, and a check written for $79 was recorded as $97. The correct balance in the cash account was b. $45,548. *82. In preparing its May 31, 2007 bank reconciliation, Dogg Co. has the following information available: Balance per bank statement, 5/31/07 $30,000 Deposit in transit, 5/31/07 5,400 Outstanding checks, 5/31/07 4,900 Note collected by bank in May 1,250 The correct balance of cash at May 31, 2007 is c. $30,500. 83. On the December 31, 2007 balance sheet of Yount Co., the current receivables consisted of the following: Trade accounts receivable Allowance for uncollectible accounts Claim against shipper for goods lost in transit (November 2007) Selling price of unsold goods sent by Yount on consignment at 130% of cost (not included in Yount 's ending inventory) Security deposit on lease of warehouse used for storing some inventories Total $ 75,000 (2,000) 3,000 26,000 30,000 $132,000 At December 31, 2007, the correct total of Yount 's current net receivables was a. $76,000. 84. May Co. prepared an aging of its accounts receivable at December 31, 2007 and determined that the net realizable value of the receivables was $300,000. Additional information is available as follows: Allowance for uncollectible accounts at 1/1/07credit balance Accounts written off as uncollectible during 2007 Accounts receivable at 12/31/07 Uncollectible accounts recovered during 2007 $ 34,000 23,000 325,000 5,000 For the year ended December 31, 2007, May's uncollectible accounts expense would be d. $9,000. 85. For the year ended December 31, 2007, Colt Co. estimated its allowance for uncollectible accounts using the year-end aging of accounts receivable. The following data are available: Allowance for uncollectible accounts, 1/1/07 $56,000 Provision for uncollectible accounts during 2007 (2% on credit sales of $2,000,000) 40,000 Uncollectible accounts written off, 11/30/07 46,000 Estimated uncollectible accounts per aging, 12/31/07 69,000 After year-end adjustment, the uncollectible accounts expense for 2007 should be . d. $59,000. 86. King Co.'s allowance for uncollectible accounts was $95,000 at the end of 2007 and $90,000 at the end of 2006. For the year ended December 31, 2007, King reported bad debt expense of $13,000 in its income statement. What amount did King debit to the appropriate account in 2007 to write off actual bad debts? b. $8,000 87. Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account c. has no effect on net income. 88.The following accounts were abstracted from Todd Co.'s unadjusted trial balance at December 31, 2007: Debit Credit Accounts receivable $750,000 Allowance for uncollectible accounts 8,000 Net credit sales $3,000,000 Todd estimates that 2% of the gross accounts receivable will become uncollectible. After adjustment at December 31, 2007, the allowance for uncollectible accounts should have a credit balance of d. $15,000. 89. On January 1, 2006, Marr Co. exchanged equipment for a $400,000 zero-interestbearing note due on January 1, 2009. The prevailing rate of interest for a note of this type at January 1, 2006 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Marr's 2007 income statement? c. $33,000 90. On June 1, 2007, Watt Corp. loaned Hall $300,000 on a 12% note, payable in five annual installments of $60,000 beginning January 2, 2008. In connection with this loan, Hall was required to deposit $3,000 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to Hall after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2007. Hall made timely payments through November 1, 2007. On January 2, 2008, Watt received payment of the first principal installment plus all interest due. At December 31, 2007, Watt's interest receivable on the loan to Hall should be c. $6,000. 91. Which of the following is a method to generate cash from accounts receivable? Assignment b. Factoring Yes Yes 92.In preparing its August 31, 2007 bank reconciliation, Adel Corp. has available the follow-ing information: Balance per bank statement, 8/31/07 Deposit in transit, 8/31/07 Return of customer's check for insufficient funds, 8/30/07 Outstanding checks, 8/31/07 Bank service charges for August $21,650 3,900 600 2,750 100 At August 31, 2007, Adel's correct cash balance is a. $22,800. . *93. Sandy, Inc. had the following bank reconciliation at March 31, 2007: Balance per bank statement, 3/31/07 Add: Deposit in transit Less: Outstanding checks Balance per books, 3/31/07 Data per bank for the month of April 2007 follow: Deposits Disbursements $37,200 10,300 47,500 12,600 $34,900 $46,700 49,700 All reconciling items at March 31, 2007 cleared the bank in April. Outstanding checks at April 30, 2007 totaled $6,000. There were no deposits in transit at April 30, 2007. What is the cash balance per books at April 30, 2007? a. $28,200 21. When using a perpetual inventory system, d. all of these. 22. Goods in transit which are shipped f.o.b. shipping point should be b. included in the inventory of the buyer. 23. Goods in transit which are shipped f.o.b. destination should be a. included in the inventory of the seller. 24. Which of the following items should be included in a company's inventory at the balance sheet date? d. None of these. Use the following information for questions 25 and 26. During 2007 Foley Corporation transferred inventory to Kline Corporation and agreed to repurchase the merchandise early in 2008. Kline then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Foley. In 2008 when Foley repurchased the inventory, Kline used the proceeds to repay its bank loan. 25. This transaction is known as a(n) d. product financing arrangement. 26. On whose books should the cost of the inventory appear at the December 31, 2007 balance sheet date? a. Foley Corporation 27.Goods on consignment are b. recorded in a Consignment Out account which is an inventory account. S 28. Valuation of inventories requires the determination of all of the following except c. the cost of goods held on consignment from other companies. P 29. The accountant for the Orion Sales Company is preparing the income statement for 2007 and the balance sheet at December 31, 2007. Orion uses the periodic inventory system. The January 1, 2007 merchandise inventory balance will appear . b. only in the cost of goods sold section of the income statement. P 30. If the beginning inventory for 2006 is overstated, the effects of this error on cost of goods sold for 2006, net income for 2006, and assets at December 31, 2007, respectively, are b. overstatement, understatement, no effect. S 31. The failure to record a purchase of merchandise on account even though the goods are properly included in the physical inventory results in d. an understatement of liabilities and an overstatement of owners' equity. 32. Belle Co. received merchandise on consignment. As of March 31, Belle had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be b. net income was correct and current assets and current liabilities were overstated. 33. Eller Co. received merchandise on consignment. As of January 31, Eller included the goods in inventory, but did not record the transaction. The effect of this on its financial statements for January 31 would be a. net income, current assets, and retained earnings were overstated. 34. Cross Co. accepted delivery of merchandise which it purchased on account. As of December 31, Cross had recorded the transaction, but did not include the merchandise in its inventory. The effect of this on its financial statements for December 31 would be a. net income, current assets, and retained earnings were understated. 35. On June 15, 2007, Tolon Corporation accepted delivery of merchandise which it purchased on account. As of June 30, Tolon had not recorded the transaction or included the merchandise in its inventory. The effect of this on its balance sheet for June 30, 2007 would be d. none of these. 36. Which of the following is correct? b. Manufacturing overhead costs are product costs. 37. All of the following costs should be charged against revenue in the period in which costs are incurred except for d. costs of normal shrinkage and scrap incurred for the manufacture of a product in ending inventory. 38. Which of the following of types interest cost incurred in connection with the purchase or manufacture of inventory should be capitalized as a product cost? b. Interest incurred during the production of discrete projects such as ships or real estate projects 39. The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its d. invoice price less the purchase discount allowable whether taken or not. 40. The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its a. invoice price. During 2007, which was the first year of operations, Luther Company had merchandise purchases of $985,000 before cash discounts. All purchases were made on terms of 2/10, n/30. Three-fourths of the items purchased were paid for within 10 days of purchase. All of the goods available had been sold at year end. 41. Which of the following recording procedures would result in the highest cost of goods sold for 2007? 1. Recording purchases at gross amounts 2. Recording purchases at net amounts, with the amount of discounts not taken shown under "other expenses" in the income statement a. 1 42. Which of the following recording procedures would result in the highest net income for 2007? 1. Recording purchases at gross amounts 2. Recording purchases at net amounts, with the amount of discounts not taken shown under "other expenses" in the income statement c. Either 1 or 2 will result in the same net income. 43. S When using the periodic inventory system, which of the following generally would not be separately accounted for in the computation of cost of goods sold? a. Trade discounts applicable to purchases during the period 44. Costs which are inventoriable include all of the following except d. selling costs of a sales department. P 45. Which inventory costing method most closely approximates current cost for each of the following: Ending Inventory Cost of Goods Sold a. FIFO FIFO b. FIFO LIFO c. LIFO FIFO d. LIFO LIFO 46. In situations where there is a rapid turnover, an inventory method which produces a balance sheet valuation similar to the first-in, first-out method is a. average cost. 47. The pricing of issues from inventory must be deferred until the end of the accounting period under the following method of inventory valuation: b. weighted-average. 48. An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is a. FIFO. 49. Which method of inventory pricing best approximates specific identification of the actual flow of costs and units in most manufacturing situations? b. First-in, first-out 50. Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of goods sold computed when inventory is valued using the FIFO method exceeds cost of goods sold when inventory is valued using the LIFO method? a. Prices decreased. 51. In a period of rising prices, the inventory method which tends to give the highest reported net income is b. first-in, first-out. 52. In a period of rising prices, the inventory method which tends to give the highest reported inventory is a. FIFO. 53. Quayle Corporation's inventory cost on its balance sheet was lower using first-in, first-out than it would have been using last-in, first-out. Assuming no beginning inventory, in what direction did the cost of purchases move during the period? b. Down 54. In a period of rising prices, the inventory method which tends to give the highest reported cost of goods sold is c. LIFO. 55. Which of the following statements is not valid as it applies to inventory costing methods? d. The use of FIFO permits some control by management over the amount of net income for a period through controlled purchases, which is not true with LIFO. 56.The acquisition cost of a certain raw material changes frequently. The book value of the inventory of this material at year end will be the same if perpetual records are kept as it would be under a periodic inventory method only if the book value is computed under the . d. FIFO method. 57.When a company uses LIFO for external reporting purposes and FIFO for internal reporting purposes, an Allowance to Reduce Inventory to LIFO account is used. This account should be reported d. on the balance sheet in the Current Assets section. S 58. Which of the following statements is not true as it relates to the dollar-value LIFO inventory method? a. It is easier to erode LIFO layers using dollar-value LIFO techniques than it is with specific goods pooled LIFO. S 59. Which of the following is not considered an advantage of LIFO when prices are rising? a. The inventory will be overstated. 60. Which of the following is true regarding the use of LIFO for inventory valuation? d. None of these. 61. If inventory levels are stable or increasing, an argument which is not an advantage of the LIFO method as compared to FIFO is c. cost assignments typically parallel the physical flow of goods. 62. TJones Manufacturing Company has the following account balances at year end: Office supplies Raw materials Work-in-process Finished goods Prepaid insurance $ 4,000 27,000 59,000 72,000 6,000 What amount should TJones report as inventories in its balance sheet? c. $158,000. 63. JSmith Manufacturing Company has the following account balances at year end: Office supplies Raw materials Work-in-process Finished goods Prepaid insurance $ 4,000 27,000 59,000 92,000 6,000 What amount should JSmith report as inventories in its balance sheet? c. $178,000. 64.Briggs Corporation uses the perpetual inventory method. On March 1, it purchased $10,000 of inventory, terms 2/10, n/30. On March 3, Briggs returned goods that cost $1,000. On March 9, Briggs paid the supplier. On March 9, Briggs should credit d. inventory for $180. 65. Harder Corporation uses the perpetual inventory method. On March 1, it purchased $30,000 of inventory, terms 2/10, n/30. On March 3, Harder returned goods that cost $3,000. On March 9, Harder paid the supplier. On March 9, Harder should credit d. inventory for $540. Use the following information for questions 66 through 68. Dexter, Inc. is a calendar-year corporation. Its financial statements for the years 2007 and 2006 contained errors as follows: 2007 2006 Ending inventory $3,000 overstated $8,000 overstated Depreciation expense $2,000 understated $6,000 overstated 66. Assume that the proper correcting entries were made at December 31, 2006. By how much will 2007 income before taxes be overstated or understated? d. $5,000 overstated 67. Assume that no correcting entries were made at December 31, 2006. Ignoring income taxes, by how much will retained earnings at December 31, 2007 be overstated or understated? a. $1,000 understated 68. Assume that no correcting entries were made at December 31, 2006, or December 31, 2007 and that no additional errors occurred in 2008. Ignoring income taxes, by how much will working capital at December 31, 2008 be overstated or understated? a. $0 69. The following information is available for Kerr Company for 2007: Freight-in Purchase returns Selling expenses Ending inventory $ 30,000 75,000 150,000 260,000 The cost of goods sold is equal to 400% of selling expenses. What is the cost of goods available for sale? . d. $860,000. Use the following information for questions 70 and 71. Richey Co. records purchases at net amounts. On May 5 Richey purchased merchandise on account, $16,000, terms 2/10, n/30. Richey returned $1,200 of the May 5 purchase and received credit on account. At May 31 the balance had not been paid. 70. The amount to be recorded as a purchase return is d. $1,176. 71. By how much should the account payable be adjusted on May 31? d. $296. 72. Assuming that Neer does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar? b. $12,284. 73. Assuming that Neer maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar? d. $12,432. Use the following information for questions 74 and 75. Kiner Co. has the following data related to an item of inventory: Inventory, March 1 100 units @ $4.20 Purchase, March 7 350 units @ $4.40 Purchase, March 16 70 units @ $4.50 Inventory, March 31 130 units 74. The value assigned to ending inventory if Kiner uses LIFO is b. $552. 75. The value assigned to cost of goods sold if Kiner uses FIFO is d. $1,696. 76. Baker Company has been using the LIFO method of inventory valuation for 10 years, since it began operations. Its 2007 ending inventory was $40,000, but it would have been $60,000 if FIFO had been used. Thus, if FIFO had been used, Baker's income before income taxes would have been a. $20,000 greater over the 10-year period. Sales June 1(balance) 800 @ $3.20 June 2 600 @ $5.50 32,200 @ 3.10 6 1,600 @ 5.50 71,200 @ 3.30 9 1,000 @ 5.50 151,800 @ 3.40 10 400 @ 6.00 22500 @ 3.50 18 1,400 @ 6.00 25 200 @ 6.00 77. Assuming that perpetual inventory records are kept in units only, the ending inventory on a LIFO basis is a. $4,110. 78. Assuming that perpetual inventory records are kept in dollars, the ending inventory on a LIFO basis is . c. $4,290. 79. Assuming that perpetual inventory records are kept in dollars, the ending inventory on a FIFO basis is d. $4,470. 80. Assuming that perpetual inventory records are kept in units only, the ending inventory on an average-cost basis, rounded to the nearest dollar, is b. $4,238. 81. Johnson Company had 500 units of Tank in its inventory at a cost of $4 each. It purchased, for $2,800, 300 more units of Tank. Johnson then sold 400 units at a selling price of $10 each, resulting in a gross profit of $1,600. The cost flow assumption used by Johnson c. is weighted average. 82. Kingman Company had 500 units of Dink in its inventory at a cost of $5 each. It purchased, for $2,400, 300 more units of Dink. Kingman then sold 600 units at a selling price of $10 each, resulting in a gross profit of $2,100. The cost flow assumption used by Kingman b. is LIFO. . 83. Brown Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2007 was $60,000. The balance in the same account at the end of 2008 is $90,000. Browns Cost of Goods Sold account has a balance of $450,000 from sales transactions recorded during the year. What amount should Brown report as Cost of Goods Sold in the 2008 income statement? c. $480,000. 84. Green Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2007 was $80,000. The balance in the same account at the end of 2008 is $120,000. Greens Cost of Goods Sold account has a balance of $600,000 from sales transactions recorded during the year. What amount should Green report as Cost of Goods Sold in the 2008 income statement? c. $640,000. 85. Johnson Company had 400 units of Tank in its inventory at a cost of $4 each. It purchased 600 more units of Tank at a cost of $6 each. Johnson then sold 700 units at a selling price of $10 each. The LIFO liquidation overstated normal gross profit by b. $200. 86. Kingman Company had 400 units of Dink in its inventory at a cost of $6 each. It purchased 600 more units of Dink at a cost of $9 each. Kingman then sold 700 units at a selling price of $15 each. The LIFO liquidation overstated normal gross profit by b. $300. AJ Company had January 1 inventory of $100,000 when it adopted dollar-value LIFO. During the year, purchases were $600,000 and sales were $1,000,000. December 31 inventory at yearend prices was $143,360, and the price index was 112. 87. What is AJ Companys ending inventory? c. $131,360. 88.What is AJ Companys gross profit? b. $431,360. . Ely Company had January 1 inventory of $100,000 when it adopted dollar-value LIFO. During the year, purchases were $600,000 and sales were $1,000,000. December 31 inventory at yearend prices was $126,500, and the price index was 110. 89. What is Ely Companys ending inventory? c. $116,500. 90. What is Ely Companys gross profit? b. $416,500. Dolan Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2005. Its inventory at that date was $220,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Date December 31, 2006 December 31, 2007 December 31, 2008 Inventory at Current Prices $256,800 290,000 325,000 Current Price Index 107 125 130 91. What is the cost of the ending inventory at December 31, 2006 under dollar-value LIFO? c. $241,400. 92. What is the cost of the ending inventory at December 31, 2007 under dollar-value LIFO? c. $232,840. 93. What is the cost of the ending inventory at December 31, 2008 under dollar-value LIFO? a. $256,240. 94. Tate Company adopted the dollar-value LIFO method on January 1, 2007, at which time its inventory consisted of 6,000 units of Item A @ $5.00 each and 3,000 units of Item B @ $16.00 each. The inventory at December 31, 2007 consisted of 12,000 units of Item A and 7,000 units of Item B. The most recent actual purchases related to these items were as follows: Quantity Items Purchase Date Purchased Cost Per Unit A 12/7/07 2,000 $ 6.00 A 12/11/07 10,000 5.75 B 12/15/07 10,000 17.00 Using the double-extension method, what is the price index for 2007 that should be computed by Tate Company? b. 109.59% 95. How should the following costs affect a retailer's inventory valuation? Freight-in a. Increase 96. Interest on Inventory Loan No effect The following information applied to Grey, Inc. for 2007: Merchandise purchased for resale $300,000 Freight-in 8,000 Freight-out 5,000 Purchase returns 2,000 Grey's 2007 inventoriable cost was c. $306,000. 97. The following information was derived from the 2007 accounting records of Logan Co.: Logan 's Goods Logan 's Central Warehouse Held by Consignees Beginning inventory $130,000 $ 14,000 Purchases 575,000 70,000 Freight-in 10,000 Transportation to consignees 5,000 Freight-out 30,000 8,000 Ending inventory 145,000 20,000 Logan 's 2007 cost of sales was d. $639,000. 98. Cole Corp.'s accounts payable at December 31, 2007, totaled $800,000 before any necessary year-end adjustments relating to the following transactions: On December 27, 2007, Cole wrote and recorded checks to creditors totaling $350,000 causing an overdraft of $100,000 in Cole 's bank account at December 31, 2007. The checks were mailed out on January 10, 2008. On December 28, 2007, Cole purchased and received goods for $150,000, terms 2/10, n/30. Cole records purchases and accounts payable at net amounts. The invoice was recorded and paid January 3, 2008. Goods shipped f.o.b. destination on December 20, 2007 from a vendor to Cole were received January 2, 2008. The invoice cost was $65,000. At December 31, 2007, what amount should Cole report as total accounts payable? b. $1,297,000. 99. The balance in Hill Co.'s accounts payable account at December 31, 2007 was $700,000 before any necessary year-end adjustments relating to the following: Goods were in transit to Hill from a vendor on December 31, 2007. The invoice cost was $40,000. The goods were shipped f.o.b. shipping point on December 29, 2007 and were received on January 4, 2008. Goods shipped f.o.b. destination on December 21, 2007 from a vendor to Hill were received on January 6, 2008. The invoice cost was $25,000. On December 27, 2007, Hill wrote and recorded checks to creditors totaling $30,000 that were mailed on January 10, 2008. In Hill's December 31, 2007 balance sheet, the accounts payable should be d. $770,000. 100. Gear Co.'s accounts payable balance at December 31, 2007 was $1,500,000 before considering the following transactions: Goods were in transit from a vendor to Gear on December 31, 2007. The invoice price was $70,000, and the goods were shipped f.o.b. shipping point on December 29, 2007. The goods were received on January 4, 2008. Goods shipped to Gear, f.o.b. shipping point on December 20, 2007, from a vendor were lost in transit. The invoice price was $50,000. On January 5, 2008, Gear filed a $50,000 claim against the common carrier. In its December 31, 2007 balance sheet, Gear should report accounts payable of a. $1,620,000. 101. Tysen Retailers purchased merchandise with a list price of $50,000, subject to trade discounts of 20% and 10%, with no cash discounts allowable. Tysen should record the cost of this merchandise as b. $36,000. 102. On June 1, 2007, Mills Corp. sold merchandise with a list price of $20,000 to Linn on account. Mills allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made f.o.b. shipping point. Mills prepaid $400 of delivery costs for Linn as an accommodation. On June 12, 2007, Mills received from Linn a remittance in full payment amounting to c. $11,376. 103. Dark Co. recorded the following data pertaining to raw material X during January 2007: Units Date Received Cost Issued On Hand 1/1/07 Inventory $8.00 3,200 1/11/07 Issue 1,600 1,600 1/22/07 Purchase 4,000 $9.40 5,600 The moving-average unit cost of X inventory at January 31, 2007 is c. $9.00. 104. During periods of rising prices, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory cost flow methods? FIFOLIFO a. Yes No 105. Earl Co. was formed on January 2, 2007, to sell a single product. Over a two-year period, Earl's acquisition costs have increased steadily. Physical quantities held in inventory were equal to three months' sales at December 31, 2007, and zero at December 31, 2008. Assuming the periodic inventory system, the inventory cost method which reports the highest amount of each of the following is InventoryCost of Sales December 31, 2007 2008 c. FIFO 106. FIFO Noll Co. had 450 units of product A on hand at January 1, 2007, costing $42 each. Purchases of product A during January were as follows: Date Units Unit Cost Jan. 10 600 $44 18 750 46 28 300 48 A physical count on January 31, 2007 shows 600 units of product A on hand. The cost of the inventory at January 31, 2007 under the LIFO method is c. 107. $25,500. When the double extension approach to the dollar-value LIFO inventory cost flow method is used, the inventory layer added in the current year is multiplied by an index number. How would the following be used in the calculation of this index number? Ending inventory at current year cost a. Numerator Ending inventory at base year cost Denominator 108. Carr Co. adopted the dollar-value LIFO inventory method on December 31, 2007. Carr's entire inventory constitutes a single pool. On December 31, 2007, the inventory was $320,000 under the dollar-value LIFO method. Inventory data for 2008 are as follows: 12/31/08 inventory at year-end prices Relevant price index at year end (base year 2007) $440,000 110 Using dollar value LIFO, Carr's inventory at December 31, 2008 is $408,000. 21. The following is true of depreciation accounting. d. All of these. 22. Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues? b. Systematic and rational allocation 23. Depreciation accounting c. retains funds. S 24. Which of the following most accurately reflects the concept of depreciation as used in accounting? b. The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. 25.The major difference between the service life of an asset and its physical life is that a. service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last. P 26. The term "depreciable cost," or "depreciable base," as it is used in accounting, refers to a. the total amount to be charged (debited) to expense over an asset's useful life. 27. Economic factors that shorten the service life of an asset include d. all of these. 28. The activity method of depreciation a. is a variable charge approach. 29. For income statement purposes, depreciation is a variable expense if the depreciation method used is a. units-of-production. 30. If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm will . d. vary with production. 31. Use of the double-declining balance method d. all of these. 32. Use of the sum-of-the-years'-digits method c. means the book value should not be reduced below salvage value. 33. A graph is set up with "yearly depreciation expense" on the vertical axis and "time" on the horizontal axis. Assuming linear relationships, how would the graphs for straight-line and sum-of-the-years'-digits depreciation, respectively, be drawn? c. Horizontally and sloping down to the right 34. A principal objection to the straight-line method of depreciation is that it b. ignores variations in the rate of asset use. 35. Each year a company has been investing an increasingly greater amount in machinery. Since there is a large number of small items with relatively similar useful lives, the company has been applying straight-line depreciation at a uniform rate to the machinery as a group. The ratio of this group's total accumulated depreciation to the total cost of the machinery has been steadily increasing and now stands at .75 to 1.00. The most likely explanation for this increasing ratio is the b. estimated average life of the machinery is less than the actual average useful life. 36. For the composite method, the composite d. life is the total depreciable cost divided by the total annual depreciation. P 37. Roberts Truck Rental uses the group depreciation method for its fleet of trucks. When it retires one of its trucks and receives cash from a salvage company, the carrying value of property, plant, and equipment will be decreased by the . c. cash proceeds received. S 38. Composite or group depreciation is a depreciation system whereby c. a straight-line rate is computed by dividing the total of the annual depreciation expense for all assets in the group by the total cost of the assets. 39. Depreciation is normally computed on the basis of the nearest . b. full month and to the nearest dollar. 40. Quayle Company acquired machinery on January 1, 2002 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2007, Quayle estimated that the remaining life of this machinery was six years with no salvage value. How should this change be accounted for by Quayle? c. By setting future annual depreciation equal to one-sixth of the book value on January 1, 2007 41. A change in estimate should b. be handled in current and future periods. 42. White Printing Company determines that a printing press used in its operations has suffered a permanent impairment in value because of technological changes. An entry to record the impairment should b. include a credit to the equipment accumulated depreciation account. 43. Dividends representing a return of capital to stockholders are not uncommon among companies which . d. none of these. 44. Depletion expense a. is usually part of cost of goods sold. 45. The most common method of recording depletion for accounting purposes is the d. units-of-production method. 46. Reserve recognition accounting d. requires estimates of future production costs, the appropriate discount rate, and the expected selling price of oil and gas reserves. S 47. Of the following costs related to the development of natural resources, which one is not a part of depletion cost? c. Tangible equipment costs associated with machinery used to extract the natural resource S 48. Which of the following disclosures is not required in the financial statements regarding depreciation? b. Details demonstrating how depreciation was calculated. P 49. The book value of a plant asset is b. the asset's acquisition cost less the total related depreciation recorded to date. 50. A general description of the depreciation methods applicable to major classes of depreciable assets . d. should be included in corporate financial statements or notes thereto. 51. The asset turnover ratio is computed by dividing d. net sales by average total assets. *52. A major objective of MACRS for tax depreciation is to c. help companies achieve a faster write-off of their capital assets. *53. Under MACRS, which one of the following is not considered in determining depreciation for tax purposes? d. Salvage value *54. If income tax effects are ignored, accelerated depreciation methods c. tend to offset the effect of steadily increasing repair and maintenance costs on the income statement. 55. Harrison Company purchased a depreciable asset for $100,000. The estimated salvage value is $10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset? c. $90,000 56. Prentice Company purchased a depreciable asset for $200,000. The estimated salvage value is $20,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset? c. $180,000 57. Lennon Company purchased a depreciable asset for $200,000. The estimated salvage value is $10,000, and the estimated useful life is 10,000 hours. Lennon used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset? b. $20,900 58. Starr Company purchased a depreciable asset for $150,000. The estimated salvage value is $10,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset? c. $28,125 59. Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset? b. $62,700 60. Pine Company purchased a depreciable asset for $360,000. The estimated salvage value is $24,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset? c. $67,500 61. On July 1, 2006, Rodriguez Corporation purchased factory equipment for $150,000. Salvage value was estimated to be $4,000. The equipment will be depreciated over ten years using the double-declining balance method. Counting the year of acquisition as onehalf year, Gonzalez should record depreciation expense for 2007 on this equipment of . b. $27,000. . 62. Norris Corporation purchased factory equipment that was installed and put into service January 2, 2006, at a total cost of $60,000. Salvage value was estimated at $4,000. The equipment is being depreciated over four years using the double-declining balance method. For the year 2007, Norris should record depreciation expense on this equipment of b. $15,000. 63.On April 13, 2006, Foley Co. purchased machinery for $120,000. Salvage value was estimated to be $5,000. The machinery will be depreciated over ten years using the doubledeclining balance method. If depreciation is computed on the basis of the nearest full month, Foley should record depreciation expense for 2007 on this machinery of . b. $20,400. 64. Vinson Co. purchased machinery that was installed and ready for use on January 3, 2006, at a total cost of $69,000. Salvage value was estimated at $9,000. The machinery will be depreciated over five years using the double-declining balance method. For the year 2007, Vinson should record depreciation expense on this machinery of b. $16,560. 65. A plant asset has a cost of $24,000 and a salvage value of $6,000. The asset has a three-year life. If depreciation in the third year amounted to $3,000, which depreciation method was used? c. Sum-of-the-years'-digits 66. On January 1, 2006, Carson Company purchased a new machine for $2,100,000. The new machine has an estimated useful life of nine years and the salvage value was estimated to be $75,000. Depreciation was computed on the sum-of-the-years'-digits method. What amount should be shown in Carson's balance sheet at December 31, 2007, net of accumulated depreciation, for this machine? b. $1,335,000 67. On January 1, 2000, Barnes Company purchased equipment at a cost of $50,000. The equipment was estimated to have a salvage value of $5,000 and it is being depreciated over eight years under the sum-of-the-years'-digits method. What should be the charge for depreciation of this equipment for the year ended December 31, 2007? a. $1,250 68. On September 19, 2006, Rosen Co. purchased machinery for $190,000. Salvage value was estimated to be $10,000. The machinery will be depreciated over eight years using the sum-of-the-years'-digits method. If depreciation is computed on the basis of the nearest full month, Rosen should record depreciation expense for 2007 on this machinery of . c. $38,750. 69. On January 3, 2006, Lopez Co. purchased machinery. The machinery has an estimated useful life of eight years and an estimated salvage value of $30,000. The depreciation applicable to this machinery was $65,000 for 2008, computed by the sum-of-the-years'digits method. The acquisition cost of the machinery was c. $420,000.. 70. On January 2, 2005, Payne Company acquired equipment to be used in its manufacturing operations. The equipment has an estimated useful life of 10 years and an estimated salvage value of $15,000. The depreciation applicable to this equipment was $70,000 for 2008, computed under the sum-of-the-years'-digits method. What was the acquisition cost of the equipment? b. $565,000 71. Sears Corporation, which has a calendar year accounting period, purchased a new machine for $40,000 on April 1, 2002. At that time Sears expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2007. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be . c. $2,000. 72. On January 1, 2007, the Accumulated DepreciationMachinery account of a particular company showed a balance of $370,000. At the end of 2007, after the adjusting entries were posted, it showed a balance of $395,000. During 2007, one of the machines which cost $125,000 was sold for $60,500 cash. This resulted in a loss of $4,000. Assuming that no other assets were disposed of during the year, how much was depreciation expense for 2007? a. $85,500 73. During 2007, Geiger Co. sold equipment that had cost $98,000 for $58,800. This resulted in a gain of $4,300. The balance in Accumulated DepreciationEquipment was $325,000 on January 1, 2007, and $310,000 on December 31. No other equipment was disposed of during 2007. Depreciation expense for 2007 was c. $28,500. A schedule of machinery owned by Dougan Co. is presented below: Estimated Estimated Total Cost Salvage Value Life in Years Machine A $320,000 $20,000 Machine C 390,000 30,000 Machine M 225,000 15,000 12 10 6 Dougan computes depreciation by the composite method. 74. The composite rate of depreciation (in percent) for these assets is a. 10.27. 75. The composite life (in years) for these assets is a. 9.1. 76. McCartney Company purchased a depreciable asset for $250,000 on April 1, 2005. The estimated salvage value is $25,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2008 when the asset is sold? d. $138,750 77. George Martin Corporation purchased a depreciable asset for $300,000 on January 1, 2005. The estimated salvage value is $30,000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. In 2008, George Martin changed its estimates to a total useful life of 5 years with a salvage value of $50,000. What is 2008 depreciation expense? c. $80,000 78. d. 79. Windsor Company purchased a depreciable asset for $300,000 on April 1, 2005. The estimated salvage value is $30,000, and the estimated total useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2008 when the asset is sold? $166,500 Garrison Corporation purchased a depreciable asset for $420,000 on January 1, 2005. The estimated salvage value is $42,000, and the estimated total useful life is 9 years. The straight-line method is used for depreciation. In 2008, Garrison changed its estimates to a useful life of 5 years with a salvage value of $70,000. What is 2008 depreciation expense? c. $112,000 80. Peppers Corporation owns machinery with a book value of $190,000. It is estimated that the machinery will generate future cash flows of $200,000. The machinery has a fair value of $140,000. Peppers should recognize a loss on impairment of a. $ -0-. 81. Dillman Corporation owns machinery with a book value of $190,000. It is estimated that the machinery will generate future cash flows of $175,000. The machinery has a fair value of $140,000. Dillman should recognize a loss on impairment of c. $50,000. 82. Jantz Corporation purchased a machine on July 1, 2004, for $750,000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $42,000. During 2007, it became apparent that the machine would become uneconomical after December 31, 2011, and that the machine would have no scrap value. Accumulated depreciation on this machine as of December 31, 2006, was $177,000. What should be the charge for depreciation in 2007 under generally accepted accounting principles? b. $114,600 83. Weston Company purchased a tooling machine on January 3, 2000 for $500,000. The machine was being depreciated on the straight-line method over an estimated useful life of 10 years, with no salvage value. At the beginning of 2007, the company paid $125,000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 5 years (15 years total). What should be the depreciation expense recorded for the machine in 2007? a. $34,375 84. Klein Co. purchased machinery on January 2, 2001, for $440,000. The straight-line method is used and useful life is estimated to be 10 years, with a $40,000 salvage value. At the beginning of 2007 Klein spent $96,000 to overhaul the machinery. After the overhaul, Klein estimated that the useful life would be extended 4 years (14 years total), and the salvage value would be $20,000. The depreciation expense for 2007 should be b. $34,500. 85. Sloane, Inc. purchased equipment in 2005 at a cost of $600,000. Two years later it became apparent to Sloane, Inc. that this equipment had suffered an impairment of value. In early 2007, the book value of the asset is $360,000 and it is estimated that the fair value is now only $240,000. The entry to record the impairment is c. Loss on Impairment of Equipment.................................. Accumulated DepreciationEquipment............. 86. 120,000 120,000 Tolan Resources Company acquired a tract of land containing an extractable natural resource. Tolan is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,200,000 after restoration. Relevant cost information follows: Land Estimated restoration costs $9,000,000 1,800,000 If Tolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material? c. $4.80 87. In January, 2007, Miley Corporation purchased a mineral mine for $3,400,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of $200,000 after the ore has been extracted. The company incurred $1,000,000 of development costs preparing the mine for production. During 2007, 500,000 tons were removed and 400,000 tons were sold. What is the amount of depletion that Miley should expense for 2007? c. $840,000 88. During 2007, Bolton Corporation acquired a mineral mine for $1,500,000 of which $200,000 was ascribed to land value after the mineral has been removed. Geological surveys have indicated that 10 million units of the mineral could be extracted. During 2007, 1,500,000 units were extracted and 1,200,000 units were sold. What is the amount of depletion expensed for 2007? b. $156,000. 89. In March, 2007, Tylor Mines Co. purchased a coal mine for $6,000,000. Removable coal is estimated at 1,500,000 tons. Tylor is required to restore the land at an estimated cost of $720,000, and the land should have a value of $630,000. The company incurred $1,500,000 of development costs preparing the mine for production. During 2007, 450,000 tons were removed and 300,000 tons were sold. The total amount of depletion that Tylor should record for 2007 is d. $2,277,000. 90. In 1999, Morton Company purchased a tract of land as a possible future plant site. In January, 2007, valuable sulphur deposits were discovered on adjoining property and Morton Company immediately began explorations on its property. In December, 2007, after incurring $400,000 in exploration costs, which were accumulated in an expense account, Morton discovered sulphur deposits appraised at $2,250,000 more than the value of the land. To record the discovery of the deposits, Morton should . b. debit $400,000 to an asset account. For 2007, Colaw Company reports beginning of the year total assets of $900,000, end of the year total assets of $1,100,000, net sales of $1,250,000, and net income of $250,000. 91. Colaws 2007 asset turnover ratio is d. 1.25 times. 92. The rate of return on assets for Colaw in 2007 is c. 25.0%. 93.Rubber Soul Company reported the following data: 2007 Sales Net Income Assets at year end Liabilities at year end 2008 $2,000,000 300,000 1,800,000 1,100,000 $2,600,000 400,000 2,500,000 1,500,000 What is Rubber Souls asset turnover for 2008? c. 1.21 94. Covington Company reported the following data: 2007 Sales Net Income Assets at year end Liabilities at year end 2008 $2,000,000 300,000 1,800,000 1,100,000 What is Rubber Souls asset turnover for 2008? c. 1.30 $2,800,000 400,000 2,500,000 1,500,000 On January 1, 2007, Newton Company purchased a machine costing $150,000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $30,000 salvage value at the end of its economic life. *95. Assuming the company uses the general MACRS approach, the amount of MACRS deduction for tax purposes for the year 2007 is a. $30,000. *96. Assuming the company uses the optional straight-line method, the amount of MACRS deduction for tax purposes for the year 2007 is d. $15,000. 97.Gant Co. purchased a machine on July 1, 2007, for $400,000. The machine has an estimated useful life of five years and a salvage value of $80,000. The machine is being depreciated from the date of acquisition by the 150% declining-balance method. For the year ended December 31, 2007, Gant should record depreciation expense on this machine of c. $60,000. 98. A machine with a five-year estimated useful life and an estimated 10% salvage value was acquired on January 1, 2005. The depreciation expense for 2007 using the doubledeclining balance method would be original cost multiplied by b. 60% 60% 40%. 99. On April 1, 2005, Reiley Co. purchased new machinery for $240,000. The machinery has an estimated useful life of five years, and depreciation is computed by the sum-ofthe-years'-digits method. The accumulated depreciation on this machinery at March 31, 2007, should be b. $144,000. 100. Mack Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in the year of disposition. Data relating to one of Mack's depreciable assets at December 31, 2007 are as follows: Acquisition year Cost Residual value Accumulated depreciation Estimated useful life 2005 $140,000 20,000 96,000 5 years Using the same depreciation method as used in 2005, 2006, and 2007, how much depreciation expense should Mack record in 2008 for this asset? a. $16,000 101. A depreciable asset has an estimated 15% salvage value. At the end of its estimated useful life, the accumulated depreciation would equal the original cost of the asset under which of the following depreciation methods? Straight-line d. No 102. Productive Output No Net income is understated if, in the first year, estimated salvage value is excluded from the depreciation computation when using the Straight-line Method Production or Use Method b. Yes Yes 103. A plant asset with a five-year estimated useful life and no residual value is sold at the end of the second year of its useful life. How would using the sum-of-the-years'-digits method of depreciation instead of the double-declining balance method of depreciation affect a gain or loss on the sale of the plant asset? Gain b. Decrease 104. Loss Increase Nolan Company acquired a tract of land containing an extractable natural resource. Nolan is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 5,000,000 tons, and that the land will have a value of $1,000,000 after restoration. Relevant cost information follows: Land Estimated restoration costs $7,000,000 1,500,000 If Nolan maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material? b. $1.50 105. In January 2007, Jenn Mining Corporation purchased a mineral mine for $4,200,000 with removable ore estimated by geological surveys at 2,500,000 tons. The property has an estimated value of $400,000 after the ore has been extracted. Jenn incurred $1,150,000 of development costs preparing the property for the extraction of ore. During 2007, 340,000 tons were removed and 300,000 tons were sold. For the year ended December 31, 2007, Jenn should include what amount of depletion in its cost of goods sold? c. $594,000 b.

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Texas Pan American - ACCOUNTING - 3321
21.Which of the following transactions would require the use of the present value of anannuity due concept in order to calculate the present value of the asset obtained orliability owed at the date of incurrence?a. A capital lease is entered into with
Texas Pan American - ACCOUNTING - 3321
21.Which of the following is not considered cash for financial reporting purposes?d. Postdated checks and I.O.U.'s22.Which of the following is considered cash?b. Money market checking accounts23.Travel advances should be reported asd. none of thes
Texas Pan American - ACCOUNTING - 3321
CHAPTER 8VALUATION OF INVENTORIES:A COST-BASIS APPROACHTRUE-FALSEConceptualAnswerTFFFTTFTFTTFFTTFFTFTNo.Description1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.Work-in-process inventory.Merchandising a
Texas Pan American - ACCOUNTING - 3321
21.When using a perpetual inventory system,d. all of these.22.Goods in transit which are shipped f.o.b. shipping point should beb. included in the inventory of the buyer.23.Goods in transit which are shipped f.o.b. destination should bea. included
Texas Pan American - ACCOUNTING - 3321
CHAPTER 9INVENTORIES: ADDITIONAL VALUATION ISSUESTRUE-FALSEConceptualAnswerTFFTFTTFFTFTFTFFTFTTNo.Description1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20When to use lower-of-cost-or-market.Lower-of-cost
Texas Pan American - ACCOUNTING - 3321
21.Which of the following is true about lower-of-cost-or-market?d. All of these.22.The primary basis of accounting for inventories is cost. A departure from the cost basisof pricing the inventory is required where there is evidence that when the good
Texas Pan American - ACCOUNTING - 3321
Texas Pan American - ACCOUNTING - 3321
21.The following is true of depreciation accounting.d. All of these.22.Which of the following principles best describes the conceptual rationale for the methodsof matching depreciation expense with revenues?b. Systematic and rational allocation23.
Texas Pan American - ACCOUNTING - 3321
21.The following is true of depreciation accounting.d. All of these.22.Which of the following principles best describes the conceptual rationale for the methodsof matching depreciation expense with revenues?b. Systematic and rational allocation23.
Texas Pan American - ACCOUNTING - 3321
Chapter 12Capital StructureMULTIPLE CHOICE1. The uncertainty caused by the variability of a firms cash flows is called . . .a. financial riskb. business riskc. financial leveraged. none of the aboveANS: BDIF: EREF: 12.2 The Modigliani & Miller Ca
Texas Pan American - ACCOUNTING - 3321
MULTIPLE CHOICEConceptual21.Which of the following transactions would require the use of the present value of anannuity due concept in order to calculate the present value of the asset obtained orliability owed at the date of incurrence?a. A capital
Texas Pan American - ACCOUNTING - 3321
MULTIPLE CHOICEConceptual21.Which of the following is not considered cash for financial reporting purposes?a. Petty cash funds and change fundsb. Money orders, certified checks, and personal checksc. Coin, currency, and available fundsd. Postdated c
Texas Pan American - ACCOUNTING - 3321
MULTIPLE CHOICEConceptual21.When using a perpetual inventory system,a. no Purchases account is used.b. a Cost of Goods Sold account is used.c. two entries are required to record a sale.d. all of these.22.Goods in transit which are shipped f.o.b. s
Texas Pan American - ACCOUNTING - 3321
MULTIPLE CHOICEConceptual21.Which of the following is true about lower-of-cost-or-market?a. It is inconsistent because losses are recognized but not gains.b. It usually understates assets.c. It can increase future income.d. All of these.22.The pri
Texas Pan American - ACCOUNTING - 3322
Chapter 18Financial PlanningMULTIPLE CHOICE1. A sales forecast that relies heavily on macroeconomic and industry forecasts is called aa. top-down forceastb. bottom-up forecastc. plug figured. none of the aboveANS: ADIF: EREF: 18.2 Planning for Gr
Texas Pan American - ACCOUNTING - 3322
1. A zero-interest-bearing note payable that is issued at a discount will not result in anyinterest expense being recognized. False2. Dividends in arrears on cumulative preferred stock should be recorded as a current liability.False3. Magazine subscri
Texas Pan American - ACCOUNTING - 3322
CHAPTER 13CURRENT LIABILITIES AND CONTINGENCIESTRUE-FALSEConceptualAnswerFFTTFFTFTFTFTFTTFFFTNo.Description1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.Zero-interest-bearing note payable.Dividends in ar
Texas Pan American - ACCOUNTING - 3322
1. Companies usually make bond interest payments semiannually, although the interest rateis generally expressed as an annual rate.True2. A mortgage bond is referred to as a debenture bond.False3. Bond issues that mature in installments are called seria
Texas Pan American - ACCOUNTING - 3322
CHAPTER 14LONG-TERM LIABILITIESTRUE-FALSEConceptualAnswerTFTFFTFFFTTFTTTTFFFFNo.Description1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.*19.*20.Bond interest payments.Debenture bonds.Definition of serial bon
Texas Pan American - ACCOUNTING - 3322
TRUE-FALSEConceptual1.A corporation is incorporated in only one state regardless of the number of states in whichit operates.True2,The preemptive right allows stockholders the right to vote for directors of the company.False3.Common stock is the r
Texas Pan American - ACCOUNTING - 3322
CHAPTER 15STOCKHOLDERS EQUITYTRUE-FALSEConceptualAnswerTFTFTFTFFTFTTFFTTFFTNo.Description1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.State a corporation incorporates in.Definition of preemptive right.
Texas Pan American - ACCOUNTING - 3322
16 DILUTIVE CHAPTER SECURITIES AND EARNINGS PER SHARE IFRS questions areavailable at the end of this chapter. TRUE-FALSE-Dilutive Securities-Conceptual Answer T FT F F T F T F T F F T F T F T. F. T F No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15
Texas Pan American - FINANCE - 3383
Chapter 9Cash Flow and Capital BudgetingMULTIPLE CHOICE1. Gamma Electronics is considering the purchase of testing equipment that will cost $500,000. Theequipment has a 5-year lifetime with no salvage value. Assume the new machine will generate afterta
GA Southern - CHEM - 3441
The Properties ofReal GasesDr. Allison J. Long17.1Ideal Gas Laws: Real gases at low pressure and hightemperature.Boyles LawConstant T, n Variable P, VPV1 = P2V21V1 V2=T1 T2Charless LawConstant P, n Variable T, VAmontons LawConstant V, n V
GA Southern - CHEM - 3441
Chapters8and9OpticalAtomicSpectrometryTopics:1.Atomicspectrometryandexcitedstates SpinOrbitCouplingandelectronicstateenergies Sourcesoflinebroadeninginatomicspectroscopy2.Sampleintroductionmethodsforatomicspectrometry Nebulizersforliquidsamples I
GA Southern - CHEM - 3441
Chemistry3441HW1DueFriAug2FundamentalsChapterF3.3(b)LiketheexampleproblemdoneinclassThursdayF3.7(b)LiketheexampleproblemdoneinclassThursdayF5.3(a)LookitupF5.3(b)LookitupF5.5(b)UsethetextbookindexforthecorrectformulaChapter1Gases1.6Liketheexample
GA Southern - CHEM - 3441
Chapter 21 Chemical Kinetics I. The Basic IdeasChapter 21Chapter 22Laws, Experiments, and Measurements what we do in the labTheory and Mechanism how we explain what was measuredSUGGESTION: grab a general chem. textbook and read the kinetics chapterT
GA Southern - CHEM - 3441
Transition State Theory (TST)Activated Complex Theory (ACT)Recall from general chemistry Go = Ho T So Go = - R T ln(Kc) Go = Gibbsfree energy Ho = Enthalpy So = EntropyKc = Equilibrium ConstantThere is a very strong connection here between free e
GA Southern - CHEM - 5541
1 | Foundations of BiochemistryClick to edit Master subtitle style 2009 W. H. Freeman and CompanyCell: The Universal Building BlockLiving organisms are made of cellsSimplest living organisms are singe-celledLarger organisms consists many cells with
GA Southern - CHEM - 5541
Lecture Connections2 | Water and Aqueous SolutionsClick to edit Master subtitle style 2009 W. H. Freeman and CompanyWater is the Medium for LifeLife evolved in water (UV protection)Organisms typically contain 70-90% waterChemical reactions occur in
GA Southern - CHEM - 5541
Practice ProblemLabel the titration curve at the points that correspond to the followingconcentrations:A) high [H3PO4]B) [H3PO4] = [H2PO4-]C) high [H2PO4-]D) [H2PO4-] = [HPO4-2]E) high [HPO4-2]F) [HPO4-2] = [PO4-3]G) high [PO4-3]9/28/11Practice
GA Southern - CHEM - 5541
Lecture Connections3 | Amino Acids, Peptides, ProteinsClick to edit Master subtitle style 2009 W. H. Freeman and CompanyBasic Structure of an Amino AcidsIonization of Amino AcidsAt acidic pH, the carboxyl group is protonated andthe amino acid is in
GA Southern - CHEM - 5541
Lecture Connections4 | 3D Structure of ProteinsClick to edit Master subtitle style 2009 W. H. Freeman and CompanyStructure of ProteinsUnlike most organic polymers, protein moleculesadopt a specific 3-dimensional conformation in theaqueous solution.
GA Southern - CHEM - 5541
Lecture Connections8|Nucleotides and Nucleic AcidsClick to edit Master subtitle style 2009 W. H. Freeman and CompanyWhat do they do?Making Proteinsthe messengerBlei and Odian, General, Organic, and Biochemistry: Connecting Chemistryto your Life,
GA Southern - CHEM - 5541
Lecture Connections9|DNA TechnologiesSection 1: DNA Cloning, the BasicsClick to edit Master subtitle style 2009 W. H. Freeman and CompanyRecombinant DNAArtificially created DNA that combines sequencesthat do not occur together in the natureBasis
GA Southern - CHEM - 4241
Welcome to CHEM 4241Instrumental AnalysisInstructor: Dr. David Kreller1Why do you have to take a course inthe basics of instrumental analysis? The majority of chemistry measurements made today areperformed with instruments. You need to know someth
GA Southern - CHEM - 4241
CHEM 4241Thursday, September 8th 2011Plan for TodayAnnouncements/business1.Comments about lab etiquetteHelp each other!TextingClean up after yourselves2.Comments about lab reportsChapter 62.Quick review of electromagnetic radiation properties
GA Southern - CHEM - 4241
Chapters 8 and 9Optical Atomic SpectrometryTopics:1. Atomic spectrometry and excited states Spin-Orbit Coupling and electronic state energies Sources of line broadening in atomic spectroscopy2. Sample introduction methods for atomic spectrometry Ne
GA Southern - CHEM - 4241
Chapter 5Signals and NoiseConcept Map of Chapter1. Define Signal3. Define S/Nratio2. Define Noise5. S/N ratiomaximization4. Sources ofNoise4a.ChemicalNoise4b.InstrumentalNoise5a.InstrumentalApproaches5b.SoftwareApproachesDefinitions
GA Southern - CHEM - 4241
CHEM 4241Tuesday, September 20th 2011Plan for TodayAnnouncements/business1. Optional make-up multiple choice test Thursday30 minutes at the start of Thursdays classYou need scantron card2. Last reports will be returned Thursday3. Next lab reports
GA Southern - CHEM - 4241
RESTRICTION MAPPINGLet us start simply:Example 1. The linear DNA fragment shown here has cleavage sites forBamHI and EcoRI. In the accompanying diagram of an electrophoresis gel,indicate the positions at which bands would be found after digestion with
GA Southern - CHEM - 4241
API Lab, practical 1A&P 1 Checklist for Practical 1Integument (Model)EpidermisDermisDermal papillaReticular layerStratum basaleStratum spinosumStratum granulosumStratum corneumHypodermisArrector pili muscleMeissners corpuscleBone Histology (
GA Southern - CHEM - 5441
A&P 1 Checklist for Practical 3Sensory organsThe EyeCorneaScleraChoroidCiliary body (ciliary muscle)IrisPupilRetinaOra serrataOptic discLensMacula luteaFovea centralisOptic tractOptic chiasmaThe EarAuricleExternal auditory canalTympani
GA Southern - CHEM - 5441
A&P 1 Checklist for Practical 2Appendicular SkeletonUpper Extremity = brachium (arm) + antebrachium (forearm)HumerusHeadGreater tubercleLesser tubercleIntertubercular groove (sulcus)Deltoid tuberosityLateral epicondyleMedial epicondyleCapitulum
Washington - ESS - 101
Compositionally Zoning the planets:-Heat and increasing temperature has to do with the planetary composition and zoning.-Planetesimals= fragments/pieces of planets or dust.-Planets gained mass, increased pressure, heating due to kinetic energy.-Planet
Washington - ESS - 101
ESS 101 Notes: Lecture 1-Composition of the matter used to make up the universe is mostly hydrogen.-Planets are made up on stardust.-The matter is very dense, i ron , nickel, silicon. These dense materials make up thep lanets.-Need supernova to creat
Washington - NUTR - 300
NUTR 300 Reading List:Class ScheduleDateDayTopicReadingSignificance of Nutrition9/289/30WFIntroductory LectureNutrition and Health10/3MDesigning a Healthful Diet10/510/7WFFood SafetyGlobal Nutritionp 3 -14p 14-21p 39-45, 47-53, 64-
Washington - SOC - 292
Soc Exam ReviewNo Child Left BehindNo Child Left Behind (NCLB) Facts NCLB is a standards-based educational reform focused on accountability on holding teachers,schools and students accountable for student learningNCLB is measures student learning thr
Washington - BIOL - 118
BIO 118Capillaries:-site of exchange for oxygen and carbon dioxide.-Small diameter, very small. Single layer of cells.-Capillaries are permeable; there are fenestrations (pores). Page 433-Fluid and materials are squeezed out of the fenestrations.-Fo
Multimedia University, Cyberjaya - ENGINEERIN - 101
EngineeringGraphics&CADD(BMFR1122) Explainthebasicgraphicprinciples. Generatefreesketching. ConstructengineeringdrawinginCADsoftware.[1] DixRiley,DiscoveringAutoCAD2009,PrenticeHall,2009.[2]Giesecke,Mitchell,Spencer,Hill,Dygdon,Novak,TechnicalDr
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - CS - 15-110
Carnegie Mellon - ENGLISH - 79101
A Healthy Constitutionhttp:/www.thenation.com/print/article/healthy-constitutionPublished on The Nation (http:/www.thenation.com)A Healthy ConstitutionAlice Waters | September 2, 2009I was moved by the way Morgan Spurlock framed a narrow long-distanc
Carnegie Mellon - ENGLISH - 79101
Salon.com Meat is gross, but it tastes goodhttp:/www.salon.com/print.html?URL=/travel/food/feature/200.http:/www.salon.com/travel/food/feature/2000/05/18/meatTHURSDAY, MAY 18, 2000 12:00 ETMeat is gross, but it tastes goodDesperate to find that my hu
Carnegie Mellon - ENGLISH - 79101