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midterm2 - NAME 1141 EMI‘TL‘ fl m'l'fiRM...

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Unformatted text preview: NAME: 1141+ EMI‘TL‘ fl: m'l'fiRM EXAMINATION #1 . - it. EACH QUESTIONEIS WORTH 4 POINTS 1x _\ I i. A deposit in transit err a-benk reconciliation should be A. memmmmm. H. athtreetetifiete tiredcpositet's beekeesh balance. LC} addedtethebenkseunnembetmme. D. mhtmeted here the bank statement balance. 2. Wren using the allowance methdd for aeeeunting fer bed'dehte, accounts reeeitrable is-reperted en the balance sheet at the expected net realimhle value. When a particular receivable from aetisiemer ultimately is detertttined in be mieelleefible. Ihe recording efthis event will — A: decreeselhenetreelrmhievaltuefflreeeeetmlsmeeiwhie ‘E/ beveenetreettbatisnntdetmninebienumtheieferrnetiengiree. ISL increase the net realizable value efthe eeeettnts receivable 7L . have rte effect on the net titalizeble 1relue of tbe aeeeutits receivable. 3- The cash teeerde and the bank statement of M01113 Guinean}: showed the fellewing at the end '0me 19A: Outstanding ebeeks at the end efJenuary IRA. Sfllflflfl; cheeks written by Lights Cmpem'during February 19k Sillflflfl: and eheeiteeleered by the bend: during Febtuatjr 195.. $54.00!]. 11inch: the omndingeheeksatflieendel'liehmy lfiketneumed In it. Elli-DI}. “'0 when. - LOW-a- E2. tent-e. D. seem. " -’ ’ 4. Metehmfiiee mmldmteteditferi3,m,temtslrlfl.n5fl.11redujrtemrd flieeashmlieefien simuldintludea JR. debit Cash, new, and Hedi! Ami; Receivebie Slflflfl. if collected within The discount pmiod. ef debit Cash, {sleet}. end credit Accidents Reeeivabie£2,9?fl,dnd Sales ' Discount $36 ifeelieeted within the di'eedunt period. 12‘: debit Cash, $3. Bill], and credit Aeeeuitts Reeeitrebie. $2 9?!) and Sales __ Dieeetmt, 331'}, if Wllectetl after the discount period. D._ debit Cash, 53 Wand credit Ammte Receivable. 53.0119. if ' calm afln‘ the disentml wind. 5L . During 19A, Thomas Company recorded bad debt expense ofilfitflflfl and wrote ufl'an unenlieetihle amount receivable amounting to 5595!}. Assuming a January 1.1%, balance in Ihefillnmnee l‘nr Duuhtfill Aenetmts ei'SIflJilflfl. the December 3], iga‘bflm httltcalluwanee amount would be .e- r. r; f, A $15,000. 7- se- t; sienna. 3.31” in) s 3.0m. . RetaflCnnnnnyrcpmtudlhefnllnwhlgmnnnmsmitsWBinmmemmem: Purchases, Him Beginning I93 inventory. $15,060; and Cost ul'gwds snide $53M- Thu-affirm the 193 ending inventory was , Hair"- 5': ~‘.-.-_‘_-.'-.I- Cs) Imam - . .2 ~— seen a. mess .t -. +533: "' m 4—- C- Hfillm “Hf—ding}; _ '43er n. semen W J, ' . A Elitlflfl'nvetstntement of the [93 ending invmmnf wesdisenvered after the finnneini statements for 193 were prepared. The effeet of the inventory errur en the 1513 finaneial statements was In surrent assets were overstated and net instants was understated. eun-ent assets were understated and net ineeme was understated. 2f . mm assets wen numtated and net in'mntu was nverstdluti. 15. smut assets were tmderstated and net ineente was flVEfiimfid. . When gends are sold an credil. rusenue usually shsuid he recugnized at the date ed A. runeiplnffi'lufilcsurdu' /B./ metfieenmeeseuemsmhuga. c . reeeiptefdtegoudsbythehuger. (/1), mfmnfdrgoods if.) canteefluetiunufthesnleswiee 9. Altheendefwfimfljflfl Wmmh flumefflm IQAmdingim-eutmyasreflecmdin dupepdmfinmflm'yreeonis. Wear: the WA effiaclseffire $2.505 Emma-afar: eerreetirm)? Assets {inventory} were understated by $1.50!} and pretax incense tees understated by $1,596. I 13,? Assets {hit-tertiary] were understated by $2.51)!) and pretax ineeme was. ' overstated by uses. C. Cestefgoodsseldwasunderststedbyflfiflflmdmfineemems unmarried by $2.5m. D. Cunnfgmdgmflmmemsredbyfljflflmdpmimwas 111de by 32.500. 113. When prices are rising, the method ofitwenmry valuation that results in the highest relative net cash inflow is: fig FIFE}. /-B." LIFD. E. Weighted Average e. specific Identification. llJNhieherlhefeflewingsrstemeetsiseeneet? 4%. FIFO reperts lower incense ameuats than L1H?!I when prices are rising. B. LlFflrepertss highs-rm: smemtthan FIFO wheeprieessre rising. (6;) LIFE] reports shigherineeme smeunt than FIFO 1written prices are " decreasing. D. LIFO reports lhc senile amount efirieeme as FIFD when prints are l3. WilhumComFanyrcpaned dxfisflnudngdntaatm-md: Swilflflflflfl; Begiming' memory. 53am Endinginvcmm1$fi.WD;Cnflofgoodssold, $66.00!]; “Hemmer-teens. Wmflrsmmmtefmehanfiise pmthascsfiertheyear? I. m)“ s m - .. - $53,WG. ' _. * - ,-:_.4 _ J. _ {3. 545.1330. [It 11 Home. ‘12.“ ._£ .fl 2 )r- ”-343; -' .1: I ' i a»; f ‘ "_ 6', r J' = L I 13. The following infermatinn'was taken from the 193 income statement cf Milhurn Company: Prem incense, $-12.ilfli3'fi Tntal cperating expenses (net including income taxes}, Emmflg Sales revenue-e S'IEflflflfiz Begfitning inventnry, $3,9Gfi: and Purchases, $9flflflfi. Ccmpute the amount ”cf the ending inventory _ (A3 maus- t'irit’j’ii a, $1 acne. ’3' '-’_-‘HE:5- c. a agent}. :- ”VP-'1' a. stance. _ sax 1355.2: - and 14.011 March L Chapine Ccrnpany purchased a new stamping machine far Eighth- flhapine paid cash the the machine. {lithe-r casts asseciated with the machine _ were: transportation cnstst $§fiihsales tax paid m; and installation ccsL w. The cast recctded fer the machine Was in? -. $5.5m. ‘- 35"; I. $5,6t1tl 3:. :L C. $.5.ilt}D-. _. -'=' I*‘ED. $551111). ;:; ”1*- {var-Ll? .. fig“ IS: Bethanyr Cyan-mars}:r plans. tn depreciate a new building using declining-balance ' depreciation with gill-D percepagceierafiun rate. The building .ccst $4flfi=flflfl The estimated residual 1tratlue nfthc' building is $-5U,iiflfl girl it hasan expected useful life ci' 2: 393.5. Assuming the first'year's depre'eiatien expense 1was recorded properly. what wculd he the amount of depreciatjan espense 111:. the second year? r. mt}; lit} a. stsssa. {all s 1 aces. b1 142/ $29,440. I). sashes. 16. Which methud efdepreciaticn results in periodic depreciatian expense that fluctuates from cne periad tn the next, net necessarily in a steadilyr upward er dcmward direction? a. Sh‘aLight—lihe. _ Units-cf—prndueticn. Ci Declining balance. D, Amenizatiun. E. Uepletica. a! 1?.Bmgorwmifimmhamdawfmmfimaaiml19A.Thaaarhadan estimated uaetitl life afflfl amt milcaaad an :3de residual vatua [pH-10W. In the 'saaand yea: afamrahip [193}. the car was driven 25,0300 milaa- The amount at' depreciation axpcnat. far 1'33 was ,L-arrliflf? r-f" 1-, f — ‘3) sim- .. ., J - B. Sufigfifi- IN}? /_,r___. c. 54.50:]. :4 3-H") D. 55.000. E. 52590:. 13. Helm Corporation purchasad a madlina- With an initial cost 9f Sflflflflm a residual valua ufSSflJfl, and an estimated mafitl life uflfl years. At the beginning ul'tht: fiflh jar, Helm spent 51am fm‘an mutu'am'diuary rcpair. Foiluwing tht: rapnir. Hatmwfimamddtmdtemchiaahadammainiaguflfulfifcaffiyamaadthat the residual value.- was whauged. Calctflata dapraciatiaa exp-ma: on ma machine 't'ar the fifth war.- aaauming that Helm uses the straight- -liaa mathad. .6... ® a” _ 302 fflr‘ v“ *" 55*615. "J‘f’hrr’ $125!] Pu 3m? Slim. - teats. -‘ ”I r at: 19. Kiwanis Company purchaaad a computer that cast 3 ] (LEW. It had an asthttatad useful life at five years and residual vain: afSfl The computat waa depraaiatad h} the att'aighalinc mathad and was said at the and hf the than]: year at" as: far Ferment Katmai: should record 1 m- A; againafSlwflDD i B. aloasufSiflEfl]. C. naitharagainmralufl- thammpumwasaaldatitabmkvalue D. naitharagaianhralaaa-thagainthataaaunadiathiaaasamuldmt ha recognized. 20 BdmntCorpomfionmadaabaskctpamhasaoflardahm Miggandmt. pavingatatalafilgflflfllfl. Markdaalmafardaaasmmanatataflahlahm mwmmmmmmmemmmmmmaingm Sfiflflfiflflfarequipmcm. “Mama-mum banana-dad in the Land. Building, and Equipment mm mpacfivaly? A. D. aaaahaa manna $aaa.aaa aaaahua Emma $100,000 manna mam mama 2L Warner 1I'3o1np1111113ir burrowed $25 {1W cash on: November 1.19.151. and signed t1_ six: month, 12% interest— bearing note payable with. Interest payable at maturity. The amontfi' ofaeomed interest payable that altouldbe shown on the Decal-abet 31 19A balm sheetis ,. 3-; It: .1ch }' 1:“.36 1L 5 25!}. r; "‘ B. S 3110. lb) 3 51:111. D. i 'i'Sfl. E. 51250. ELAWtEalfimneliabflityansingfiomanevemthatbaaflmdyMppa-HL Immiiyiacaiied an annotated liability. /B.;/7 a contingent liability. _ a deferred 11311111111. )‘L f‘fi“ an estimated 11111111111. 11.6111121de Company bot-towed 5190.931}! cash on Septinnber 11 193. and signed a one—year 12%. latex-estnbeanng note payable. The required adjusting entry at the end at" the. accounting period. December 31T 193. would be ® B. Interest expense. ............................ 4.96:3 interest payable ......................... 4,1llflfl interest expense... .. llflfll} Interest payable -.. llflfll} Notee payable ................................. miflfl Dill] Intemst expenaem. ...................12,ilfl:l] 24. Amhamrafioofldbefmepafiagofl‘a lmgecment liability nitheasaFotlowingdnspaymeaLtbennmnraflowiflbe 1111112111114. grown-than 2.4 orleae than 2.4denending upon the dollar amount imrolwd. 25. {fir-:35 Company is involved in a InwmiL Foatmutc disclosure of the muting-at liability which could arise does NOT have In hu'prfieuwd il'lhe probability of Cmnwingmuneynsamdlufmc lawfitis Wyn-(mime andflmamnumcauuulbemasunabiy. @ Fobnbkanddwnmmmlmmbcmmhlyeflimm /mnfltandlhnmtmhermhtycflhmknl 74 I). reasonably possible and the amount can be manually mimm BONUS QUESTION - “1 NEWS! Krismflsgmndnmiherpmmisutngiwhctadflkfmiljflflthrectimcamatme endnfymr'lmntthcendnfyw4andnnccntfl1¢auinfymi Hnwmuchislhn mnncy that 1will mandala by thc cud organ: five 3411th tuday. warning Kristen could Pres-urn Value 91‘ $1 Pram Value ufan Annuity of $1 Per-Ends Dianna: Rina nffifi’n Fez-Ends [fiscaunt Rate of 6% 1 {1.9434 1 {It-.9434 2 0334313 2 1.3334 .. -' 3: {1.3333 1?- ?“ 3 2.33313 ' '4’ 4 6392] i " 5 4 3.4651 "' ’4‘ 35 43.3433 '53. , 5- 41-3134 Future Value nf 51 Future Vain: nfan Annuity of?! Puriuds Disenunt R1111: offiV- Periods Dimmi Ran: nffi’n [l um 1 L06 1 LED 2 [-1236 2 2.116 3 I .I 911] 3 3.13315 4 llfili 4 4.33mi 5 L333? 5 5.63?! we r-._ .—__‘ _._-- :‘._7-‘ : .15: mm_S%—¢L 1.3?!» 3:;J 3. ‘ 4-3:: Ir‘- ‘-_ .-— _ ,_ I, 1.3“!” #1:? ”‘4 S’s-OWL ] it V w”: : _-t(§ 'I'Z-‘r 4* .5 1'31}!- . / It; If I .. ' + ‘5}: ‘— -|r- ___ "'.I I- ‘- 13.14 mm: :43 x- ”[9123 "l’J- ”Rig 3 7.5-?" A: J"; '1 fi' NAME: flvfl'l' Swank 5L MID-TERM EXAMWA-‘I‘tfll‘i #2 ._ .. a. EACHQ‘UESTIGNS- IS wenme PUMS t-..- l a. l- Adepueitinlmnsitenabmfltreeencfliatinnslmtddbe A. added It} the depmitm's book trash balm B. mmmmmvsmmhelm. LC) added tethebank statementbalanee D. subtracted fret-n the bank etatemertt baltmee. 2- When using the nilewanee methed fDT accounting fer bad debt; neeeunts. meeivable is reported on the balance sheet at the expected net realizable value. Mmapeitieular reeeivablefrmnaeustemenfltimatelyisdetemtimdtebe uncalleetfiile. the meaning efthis event will — A. ‘. decrease tin net realizable value efthe aeentmte receivable. ‘3: have an effect that is net detenninablefrnm the information given. 6'. _ increase the-net realizable value ef' the aeeeunta receivable. /B./ have an effect en the net renIiaeble value ef'the aeeeunet receivable. 3- The cash records and file: bank statement. Dill-#101115 (:ttun'tptm}1r showed the 53110ng at the end if Feta-am)! 19A: 01113131:de checks at the end et‘JanutIry 19A. same; cheeks written by Main: Company during Felmmry 19A. SSH-lull]: andchcdtsflcaflti bythebenlt diningFelmmy [matinee Waxed-tr ennui-Ming ebeeka at the end efFebmarv 19A. amounted to I. gt. $2.0m}. ' .6: ”'1 54.50:}. J.- 0 9 er .. e. seem. . . D. $8.1m. ' 4. Merdtantfisewassnldmcmdit forSlflflfl. tame ”111.1150.mede theeaeheuflectimelmflldincludea A. debit Cash. $3,flflfl. and etedit Amounts Receivable, same. if eelleeted within the di'eeennt period. Ev. tieb'it Caeb,.$3,flflfl_. anti eredil Attenutits Reeeivable.$2.9'?fl.and Sales. *' Dieeeunt. $31}, ifeelieeted within the dieeeunt peried. .6: debit Cad}. $3.0M, and credit Anaemia Receivable. 52.91“]. and Sales __ Disemml. 33%}. if'eellefled afiel- the dimeunt paid. I). debit Cash. 3.0mm aedit mulls Reeeivable. same. if ' collected after the diseuunt period. ...
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