final_exam - Final Exam: Chapters 1-15 Financial...

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Final Exam: Chapters 1-15 Name ___________________________ Financial Accounting, Fifth Edition Instructor ________________________ Section # _________ Date __________ Part I II III IV V VI VII VIII Total Points 90 25 14 15 12 15 14 15 200 Score PART I — MULTIPLE CHOICE (90 points) Instructions Designate the best answer for each of the following questions. Questions 1 and 2 are based on the following information: Cain Company recently incurred the following costs: (1) Purchase price of land and dilapidated building $250,000 (2) Real estate broker's commission 14,000 (3) Net demolition costs of dilapidated building 39,000 (4) Excavation costs for new building 44,000 (5) Architect's fees and building permits 30,000 (6) Costs associated with new building construction 950,000 (7) Costs associated with new furniture and equipment 250,000 (8) Actual interest costs during building construction 168,000 (9) Actual interest cost after completion of building construction 120,000 (10) Costs of walks, driveways, and parking lot 55,000 ____ 1. The building should be recorded on Cain's books at a. $980,000. b. $1,024,000. c. $1,063,000. d. $1,192,000. ____ 2. Land should be recorded on Cain's books at a. $250,000. b. $264,000. c. $303,000. d. $333,000.
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Test Bank for Financial Accounting: Tools for Business Decision Making, Fifth Edition ____ 3. Benson Supply bought equipment at a cost of $24,000 on January 2, 2000. It originally had an estimated life of ten years and a salvage value of $4,000. Benson uses the straight-line depreciation method. On December 31, 2003, Benson decided the useful life likely would end on December 31, 2007, with a salvage value of $2,000. The depreciation expense recorded on December 31, 2003, should be a. $2,000. b. $2,200. c. $3,200. d. $4,400. ____ 4. In order to be relevant, accounting information must a. be neutral. b. be verifiable. c. help predict future events. d. be a faithful representation. ____ 5. Riodan Company sold old equipment for $25,000. The equipment had a cost of $50,000 and accumulated depreciation of $30,000. The entry to record the sale of the equipment would include a a. loss on disposal of $25,000. b. gain on disposal of $25,000. c. loss on disposal of $5,000. d. gain on disposal of $5,000. ____ 6. The cost of intangible assets should be a. amortized over the assets' estimated useful life, or 20 years, whichever is shorter. b. amortized over a period not exceeding 5 years. c. amortized over the assets' estimated useful life. d. charged to an expense account at acquisition. ____ 7. In a period of rising prices, the inventory method that results in the lowest income tax payment is a. LIFO. b. FIFO. c. average cost. d. specific identification. ____ 8. On November 30, Thatcher Company issued a $8,000, 6%, 4-month note to the National Bank. The entry on Thatcher's books to record the payment of the note at maturity will include a credit to Cash for a. $8,000. b. $8,480. c. $8,160. d. $8,320. ____ 9. The inventory methods that result in the most current costs in the income statement and balance sheet are Income Statement Balance Sheet a. FIFO FIFO b. LIFO FIFO c. LIFO LIFO d. FIFO LIFO ____ 10. The following information is available for Lighten Company: FE-2
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Final Exam Sales $130,000 Freight-in $10,000 Ending Merchandise Inventory 12,000 Purchase Returns and Allowances 5,000 Purchases 90,000 Beginning Merchandise Inventory 15,000 Lighten’s cost of goods sold is a. $115,000.
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final_exam - Final Exam: Chapters 1-15 Financial...

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