financial accounting solutions quiz 2.pdf

financial accounting solutions quiz 2.pdf - ADMN 502 Second...

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Unformatted text preview: ADMN 502 Second Quiz SPRING 2018 Kkaf Student Name: Class time: (Circle one) Knowles MWF 12:10 TR 8:10 Read each question very carefully and place your answers on the scantron sheet. Turn in both the scantron sheet and the exam making sure your name is on both. lMPORTANT: Carefully fit] out the scantron sheet using a #2 pencil according to the following directions. All bubbles must be completely filled in and all changes must be completely erased. No extra time will be given to tilt out the scantron form. 1. TEST VERSION: You wiil find this on the second page of the exam in the top left corner. Please fill in the cones ondino bubble on the to of the scantron sheet ONLY after on are instructed to 0 en the exam. 2. NAME: Your first and last name, class & section time (for example MWF 8:10 or TR 9:40) 3. STUDENT ID NUNIBER: Write your complete _9_ digit UNI-I Student ID in the NINE BOXES and FILL in all of the correct bubbles 4. TEST ID #: Please write the appropriate two digit number for the instructor you have: 01- Berube; 02- Knowles Do not fill in the answer section after question number 30. DO NOT TURN IN YOUR SCANTRON WITHOUT ALL THE ABOVE BEING FILLED OUT AND ALL OF THE CORRECT BUBBLES FILLED OUT. EXPECT TO LOSE 10% ON YOUR EXAM GRADE IF YOU DO NOT FOLLOW DIRECTIONS! .6 WM eaeaaaeee seasaeaaaat E @@@@@@@[email protected] @[email protected]@@®@[email protected] @@@@@@@[email protected] @[email protected]@[email protected]®@@ @@@@@[email protected]@ [email protected]@@@@®[email protected] @§@@@@@[email protected] @[email protected]@@@@[email protected] Version: A Ratios: Receivables Turnover = Net Sales Average Net Accounts Receivable* Days Sales Outstanding = 3651‘Receivable Turnover Gross Profit Percentage = Gross Profit Net Sales Inventory Turnover 2 COGS Average Inventory* *Average = Beginning Balance + Ending Balance MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A company reported the following information for its most recent year of operation: purchases, $100,000; beginning inventory, $20,000; and cost of goods sold, $110,000. How much was the company's ending inventory? 3% .1, P apron .. Q 1'; L0 / A)$30,000. B) $20,000. C)$15,[email protected],000. “MW rifierU @ Ito/(.700 2) The CHS Company has provided the following information: - Accounts receivable written-off as uncollectible during the year amounted to $11,500. 0 The accounts receivable balance at the beginning of the year was $150,000. - The accounts receivable balance at the end of the year was $210,000. ° The allowance for doubtful accounts balance at the beginning of the year was $14,000. - The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $12,900. - Credit sales during the year totaled $900,000. How much cash was received from collections of accounts receivable? A) $701,500. 13) $828,500. C) $888,500. D) $690,000. 3) Maxim Corp. has provided the following information about one of its products: (‘3 6 D Date Transaction 1/1 6/5 1 1/10 Purchase - ' ' ‘ I v During the year, Maxnn sold 400 units. ”2-7—51- 3< U0 0 What is cost of goods sold using the average cost method? - 0 (/0 A) $50,000. B) $43,000. C) $62,000. @64,000. é (K 4 4) Oakwoocl Company had accounts receivable of-$750,000 and an allowance for doubtful accounts of $21,500 just pliOI‘ to writing off as worthless a customer’ 3 $5, 000 account leceivable. The net lealizable value of C) ——- $750,000 $745,000 D) -— $728,500 . $723,500 5) Lauer C01poration uses the periodic inventory system and has provided the following information about one of its laptop computers: During the year, Lauer soEd 750 laptop computers. What was cost goods sold using the FIFO cost flow assumption? A) $735,000. B 725,000. C) $740,000. D) $720,000. 6) Carr Corporation has provided the following information for its most recent month of operation: sales $8, 000; beginning inventory $1, 000; ending inventory $2,000 and gross profit $5,000. How much were Carr’s inventory purchases during the period? A) $5, 000 .,$4 000. C) $6, 000 D) $9,000. 9 a 08/ 5‘0 W “(6 w€I=dc/ I 55; f1: «2500.; r" 43.000 Which of the following jouinal entries correctly records bad debt expense? B'd debt expense -- Allowance for doubtful accounts -- 13) Allowance for doubtfiil accounts - Accounts receivable - C) Allowance for doubtful accounts - Bad debt expense -- D) —-- 8) A company sells a product FOB destination. The product is shipped on December 29, 2015 and the customer receives the shipment on January 3, 2016. Which of the following is true? A) The sale will be recorded when the shipment is shipped. The sale will be recorded when the shipment is received by the customer. C) The sale will be recorded when it is known there will be no returns or allowances. D) The sale will be recorded when the customer's credit card information is received. 9) Flyer Company has provided the following information prior to any year-end bad debt adjustment: - Cash sales, $150,000 (7 - Credit sales, $450,000 - - Selling and administrative expenses, $110,000 - Sales retums and allowances, $30,000 - Gr - ntsr iv 1e.$11000 Xcor‘: S‘,&“00 0 Sales discounts, $14,000 - Allowance for doubtfill accounts credit balance, $1,200 ~ Fiyer prepares an aging of accounts receivable and the result shows that 5% of accounts receivable 's estimated 6 uncollectible. How my bad debt expense? l I (l 0 0 0 K V 0 i e; :i i V 0 A) 4,300. B) $4,240. $5,500. D) $6,700. 10 Which of the following statements is false? he journal entry to write off an uncollectible account receivable decreases operating income. B) The journal entry to write off an uncollectible account receivable does not affect current assets. C) The journal entry to record bad debt expense decreases retained earnings. D) The journal entry to record bad debt expense decreases current assets. Q 11) Which of the following correctly describes the effect of a sales discount? @Net income decreases. B) Net sales increases. C) Gross profit increases. D) Current assets remain the same. 12) Which of the following statements is con‘ect? @LIFO reports a higher net income amount than FIFO when unit costs are decreasing. B) FIFO reports lower net income amounts than LIFO when unit costs are increasing. C) LIFO reports the same amount of net income as FIFO when unit costs are increasing. D) LIFO reports a higher net income amount than FIFO when unit costs are increasing. 13) The Ward Company has provided the following information: [q - Net sales totaled $750,000. 73” O - Beginning net accounts receivable was $65,000. 7 S" - Ending net accounts receivable was $85,000. What was Ward's receivables turnover ratio? @100 B) 8.8 C) 5.0 D) 11.5 14) Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: During the year, Lauer sold 750 laptop computers. iat was ending inventory using the FIFO cost flow assumption? A 55,000. B) $40,000. C) $45,000. D) $60,000. 15) Which of the following costs is not included as inventory on the balance sheet? A) Finished goods. B) Raw materials to be used in the manufacturing process. C) Work in process. Q Freight-out costs for finished goods sent to retailers. 16) Coleman Company has provided the following information: beginning inventory, $100,000; cost of goods sold, $450,000; and ending inventory, $80,000. How much were Coleman's inventory purchases? ®$430,000. B) $410,000. C) $450,000. D) $420,000. 1 0 “to 00 ‘l‘ -" got/o W :: -u,g"0,u V0 490,000 17) Superior Company has provided you with the following information before any year-end adjustments: Net credit sales are $120,000. fl Historical percentage of credit losses is 2%. 0,6,, 0 {/0 Allowance for doubtful accounts has a credit balance of $300. X‘ 0-1, Accounts receivables ending balance is $47,000. 9.. tr 0 0 What is the est' nated bad debt expense using the percentage of credit sales method? A) $940. (5):. 2,400. C) $2,700. D) $2,100. 18) Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptOp computers: E00 During the year, Lauer sold 750 laptop computers. What was ending inventory using the LIFO cost flow assumption? @$40,000. B) $55,000. C) $60,000. D) $45,000. 19 Which of the following statements is correct when inventory unit costs are increasing? IFO will result in higher net income and a higher inventory valuation than will LIFO. B) LIFO will result in lower net income and a higher inventory valuation than will FIFO. C) FIFO will result in lower net income and a lower inventory valuation than will LIFO. D) LIFO will result in higher net income and lower inventory valuation than will FIFO. 20) The Ward Company has provided the following information: ' Net sales totaled $750,000. 7; O 0 Beginning net accounts receivable was $65,000. .____,.._——-—-— - Ending net accounts receivable was $85,000. 7( What was Ward's average collection period? @365 days. B) 31.6 days. C) 73.0 days. D) 41.8 days. 21) A company provided the following data: sales, $500,000; beginning inventory, $40,000; ending inventory, $45,000; and gross profit, $150 000. What was the amount of inventory purchased during the year? .__ __ C 0/ a 5‘0 - 1: t- Purén 4-? A) $385,000. B) $145,000©$355,000. D) $345,000. ., 430er stxjoW-Hfifl 33‘0“” ‘2. c? "' 22) One of Trent Company‘s customers returned products that hadgeen sold on account for $800. Which of the following correctly describes the effect on the financial statements of the return? @Accounts receivable decrease $800. D f 5-41,,“ 0229+ £0 6 £0 B) A contra—revenue account decreases $800. ~C / I“ I (l a C. 0 C) Sales returns and allowances decrease $800. D) Net sales increase $800. 23) Which of the following is not a component of the gross profit calculation? A) Sales returns and allowances. B Credit card discounts. C) Cost of sales. ) llowance for doubtful accounts. 24) A company had the following partial list of account balances at year-end: How much is net sales revenue? A) $88,600. B) $90,700. C) $89,[email protected]$91,900. 25) Which of the following statements is correct? A) The choice of an inventory costing method is dependent upon the actual physical flow of the goods in inventory. B) FIFO should be used during a period of decreasing unit costs when the objective is to maximize the gross profit reported on the balance sheet. C) LIFO should be used during a period of increasing unit costs when the objective is to maximize the ending i ventory value on the balance sheet. The average cost method will result in an ending inventory balance which is somewhere between MPG and FIFO when inventory unit costs are changing. 26) Newark Company has provided the following information: - Cash sales, $450,000 + - Credit sales, $1,350,000 4' 0 Selling and administrative expenses, $330,000 - Sales returns and allowances, $90,000 --- . Gross profit, $1,360,000 - Increase in accounts receivable, $55,000 . Bad debt expense, $33,000 . Sales discounts, $43,000 ""' :— I‘ g G 7, 000 - Net income, $1,030,000 How much are Newark's net sales? . . A) $1,634,000. B) $1,800,000. C) $1,745,000. .$1,667,000. 27) Dillon Company uses the allowance method to account for bad debts. The entry to write off a bad account (one that wilt never be collected) should be: 33) _ _ _ C) Bad debt expense Allowance for doubtful accounts — Allowance for doubtful accounts Accounts receivable 28) Which of the following transactions does not affect gross profit? A customer returning merchandise that was sold for a profit. @‘ he journal entry to record bad debt expense. C) The collection of cash on an account receivable, which was paid for by the customer within the discount period. D) Accepting a credit card for a sale and paying a service fee to the credit card company. 29) Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works prepared and aging of accounts receivable and estimated that $5,000 of the $98,000 accounts receivable balance would be uncollectible. The allowance for doubtfui accounts had a $400 debit balance at year-encieprIBor to adjustment. What is the amount of bad deb xpense? L3 ’ “$1M A) $4.600. B) $400. (2:05.400. D) $100-. 1—1 020 WW 0 . . I " $300 0 30) A $25,000 overstatement of the 2015 ending inventory was discovered after the financial statements for 205 were prepared. Which of the following describes the effect of the invent01y error on the 2016 financial statements? ‘ Y (L ( X17, 7/ Net income and stockholders' equity are both understated. 2 I 9.? 10 00 0/! Ofrébf’ et income is understated and stockholders' equity is correct. I C) Net income and stockholdersr equity are both unaffected. 69f 6/3 0 C D) Net income and stockholders' equity are both overstated. 6 M 0 K H {gr ...
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