Midterm Form D - |. Which of the following manufacturers...

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Unformatted text preview: |. Which of the following manufacturers would most likely usejob-order costing'? A. Beverage manufacturers. H B. Oil refiners. (“1 C. Microchip processors. 0. Custom | lome Builder E. Fertilizer manufacturers. 2. Huxtable ehargcs manufacturing overhead to products by using a prcdcterinincd application ratc, computed on the basis of machine hours. The following data pertain to the current year: Budgeted Direct Labor 33 75.000 Annual Direct labor 53 00.000 Budgeted Direct Materials 53 00.000 .Ftetua] Dir-oer Materials 5250.000 Budgeted I'vtanulecturingI Lh-erhead Si Ulltttlti Actual Manufacturing lI2L.'11.'crlie:it:l $400,000 Budgeted Machine Hours 10.000 Actual Machine Hours 7.000 PGHR 5.50 Based on the above information, which of the following statements are true? Hustable's current period manufacturing costs totaled $1.1“?5.tiflfl Hustable's cost of goods manufactured equals $ | £00,000 Huxtable overapplied manufacturing overhead by S | 00.000 lluittable will make the following entry to write off the DVEI'fUIl'ClEI' applied overhead for the year: 3305?”? Duh it Credit Manufacturing Overhead 50.000 Cost o t'fiio-ruis Sold 50.000 E. liusta‘ole will make the following entry to write otfthe overfunder applied overhead for the year: Debit Credit (“est ei'tinods Sold fitttltlti Manutiieluring Overhead SELEJEJU 3. Which ofthe following inventories would a discount retailer such as Wal—Mart report as an asset'? A. Raw materials. B. 1Work in process. C. Finished goods. 1'}. Merchandise inventory. E. All of the above. 4. Judy has recently hired a nanny for her 3 month old son. She secretly installs a hidden video camera. Assuming the nanny does not know about the camera. what type of control procedure is the security camera?I A. Preventative a. Detective C. Corrective D. Detective and preventative. E. Corrective and preventative. 5. The total production cost charged to ajob is composed of: A. direct material and direct labor. B. direct material. direct labor. manufacturing overhead. and outlays for selling costs. C. direct material. direct labor. manufacturing overhead. and outlays for both selling and administrative costs. D. direct material. direct labor, and applied manufacturing overhead. Ii, direct material. direct labor. and actual manufacturing overhead. is. Which of the following statements is true'? A. Risks are designed in response to company objectives B. Control procedures should be designed and implemented for every risk identified as potentially threatening key company objectives. C. A company must first identify risks before deciding on it‘s overall objectives. D. Implementation ol'intcrnal control procedures should be seriously considered to mitigate risks identified as having a "high materiality risk" bttt only if the cost of the control procedure outweighs tlte benefit. E. None of the above are true TI". 0. 10. For the yeal'just ended, {Tole Corporation's manufacturing costs {raw materials used, direct labor, and manufacturing overhead] totaled 5 l ,500,000. Beginning and ending work—in—proeess inventories were $00,000 and $00,000, respectively. Cole's balance sheet also revealed respective beginning and ending finished-goods inventories of $250,000 and $130,000. [in the basis of this information, how much would the company report as cost of goods manufactured {COM} and cost of goods sold {CL—i5]? 1"... COM, $1,600,000; CGS. $1,530,000. H. (Kim, $1,430,000; (TIES, $1,540,000. C. CUM, $1,530,000; CUE, $1,400,000. D. CUM, $1,510,000; (‘63, $1,540,000. H. CUM, 51,530,000: CUE, $l £00,000. An employee accidentally ovelstated the year's advettising expense by $50,000. Which of" the following correctly depicts the effect of this error? A. Both Net Income and cost of goods sold will be overstated by $50,000. B. Cost ofgoods sold will be overstated by 550,000. C. Net income will be understated by $50,000. D. Cost of goods manufactured will be overstated by $50,000. E. None of the above. Utilities incurred in a particular period: A. Will always be recorded with a debit to utilities expense. B. Could be a product cost or a period cost depending on the use of the asset and the type ofbusiness. C. 1s always considered a period cost. I}. Could initially be recorded on the balance sheet and then subsequently moved to the income statement. E. B and D The recognition ot‘a liability could be accompanied by which of the following? a dec rease iit expense a decrease in assets an increase in revenue , an increase in espeuse E. None of the above cows Franklin Consulting Company maintains its records on a cash basis. During 200-0 the Following cash—flows were recorded: Cash received from customers $500,000 and cash paid for salaries, utilities, and advertising, $200,000, 550,000 and 550,000 respectively. You determine that customers owed the company $50,000 and $25,000 at the beginning of the year and end—of year respectively. The company owed salaries totaling 550,000 at the end of the year and did not owe any salaries at the beginning of the year. Determine the accrual net ineonte for the year. A. $200 .000 B. 522 5,000 C. 1; 12 5,000 D. $2 7' 5,000 E. None of the above IE. On September 20. zoos. Precision Electric lCompany purchased $2fl,flflfl of stereo equipment For resale on credit. subject to the terms l.-'l :‘i, ni’3tl. The company records all purchases using the gross method. 1|tltr'hich ofthe following entries would he made to record the payment, assuming that the compain paid for these goods on October 26th? A. nchi: Credit 1Here-laantlisa: lnye'ntury' Eilflflfl Cash Eflflflfl 13. Debit Credit Accounts Payable 2t].tlt'.ltl Cash Elflltlll C. Debit Credit Accounts Payable EUflEIU Herehatntlise InL'Lm1ury 31flflfl ("ash llflflfl D. Debit Credit Accounts Payable ltl.tltltl Merchandise Inyciitoiy ELID Cash I‘ll.tttltl E. Debit Credit {‘aslt lEijillli Sales Discounts 211! Sales Revenue EUJJUU l3. Him.r would the oyertime wages paid to a factory equipment operator he classii‘ied‘lJ A. Product cust- manufacturing oye rliead ls. Period cost- indirect labor C. Period Cost- Operating Expense I]. Product ICost— direct labor E. Period |Cost- indirect cost of operations l4. 1|Which of the following items is typically n_ot reflected in the final recorded value of merchandise iiiyeiitory‘?I A. The final invoice price. It. Purchase discounts taken. C. Sales taxes D. Freight {first paid by the seller, goods shipped FOB-Destination E. All of the above are typically included. I5. In May efZUUb. Raymond Financial Services became involved in a tax dispute with the IRS. At December 31. EDDIE. the tax attorney for Raymund indicated that an unfavorable eutceme tn the dispute was prnbable. The additional taxes were estimated tn be ETTUHUU but ctiuld be as high as $1.1?flflflfl. After the year-end. but hetere the Eflfld financial statements were issued. Raymond accepted an IRS settlement uffer ufiigi'fiflll'l}. Raymund slluuld have repurted an accrued liability tin its December 3 I. sues, balance sheet of: A. .‘E arenas. E. $9flfl,flflfl. C. SQTGfl-flfl. 1'}. lil ,ITU,UUU. Id. Adam‘s Apples epened business an January 1. Eddie. and paid for two insurance policies effective that date. The liability pulicyr was 3 | 511th} fur a single year ufcciyerage. and the crup damage pulicy was Enliflflfl fer a three—year term. 1|i'r'liat dnlIar amnunt nf insurance expense 3a pre-paid insurance will Adam's reptirt nn its ll-“312flflti financial statements“? A. $30flflfl efinsuranee expense— balance sheet 3 | 5.131313 prepaid insuranee- ineeme statement B. $|5,t]t]t.l ef insurance espense- income statement $3fl.flflfl prepaid insurance- balance sheet C. $3fl.flflfl efinsrirancc cspcnse- ineeme statement $3flflflfl nf prepaid insurance an the balance sheet D. $tiflflflfl of insurance expense— balance sheet 330.0% centia revenue— inenme statement E. $3flflflfl {if insurance expense— balance sheet HUANG ef prepaid insurance en the ineeme statement IT. Marie werks in the accounts payable department. She recently prepared a check request tn pay a 1render's inyeice after matching the invoice against the related purchase erder and receiving repert. 1|illi’bich nf the fnllnwing statements is must truc‘?I A. Marie's acliuns demnnstrate a strung internal euntrul user the payment prueess. I}. Marie's aetinns weakened the internal central for the vendor. C. Marie's aetiens weakened the internal control fer her ceimpan y. I]. The bank shnuld nnt hnnnr Marie's check. E. By perterming this eentparisen Marie has eliminated the risk of fraudulent financial reperting [as it relates tn the purchasing and disbursement cycle]. IS. l9. 20. 2|. Chill started 200E: 1with 3100.000 of merchandise on hand and the inventory account . During 2006. 3500.000 in merchandise was purchased on account with credit terms of?! I0 nit-45 and shipping terms of f_o_b. destination. The 1uendor pre—paid the freight charges of 3] 0,000. CNH did not retum arty of the order and the invoice was paid such that the purchase discount was taken. [‘NH rcponed cost of goods sold totaling $200,000. What is the dollar amount of beginning inventory reported at 1if I.-"2.00T‘? A. S l 90 .000 B. $300 ,000 C. $390 .000 D. $400 1000 15. $4 l 0,000 The following accounts were taken front Splendid Corporation's accrual basis adjusted trial balance for the year ended I13 1.52008. Please assume that all aeeounts have normal balance-s. Please use this information to answer questions 10 through 27". Depreciation Expense-Building 25.000 Aeeounls Reeeis'able 100e000 Unearned Rent lneorne 25.000 e‘teeuinulated Depreciation-Bldg 50.000 Sales Revenue 200.000 Building 100.000 Salaries Payable 1.500 ICash 2.5.000 Salaries Expense 7.5.000 Cost of Goods Sold 50.000 Aeenunts Payable 73.5 00 Finished Goods 25.000 What is the dollar amount of the net income that Splendid rcponed for the year ended |2.-'31f2003’.’ A. $25,000 El. $50000 {3. $T5,000 D. 3 l00 .000 E. $125.000 What is the dollar amount of gross profit reported by Splendid for the year ended l2f3 133008? A. $50 ,000 E. ii I 00,000 C. $ | 50.000 1}. $200 .000 E. $225,000 Please assume that Splendid started the year with no finished goods. manufactured for the year ended DBL-"2003'? What was the cost-oilgoods A. $25,000 is. $50,000 C. srsnoo o. steaooo E. The answer cannot be determined from the information provided. 5 22. On which financial statement would the cost of‘ goods Inanu’r‘actured be reported“? A. Balance Sheet B. Income Statement C. Statement of Retained Earnings 1'}. Footnote disclosure only E. It would not be reported on any ol'the lbur basic financial statements. 23. Please assume that Splendid started the year with a $5D,flflfl balance in Accounts Receivable. What was the amount of cash collected on customer accounts during 2008'? A. $5fl1flflfl E. $ | St] ,tltlt] C . Elli] .tltlt] I]. l; 2 5t! ,UUU E. 90313133131] 24. [n the facts provided. til "salaries expense“ has a 12.:‘3li’2tltlti balance of STSJJIUU and [ii] salaries payable has a S I .SCICI balance. 1|t‘t’hich ot'thc tbllowing below choices respectively identifies the effect of closing entries on the above two accounts in” = increase 8.: "—” = decrease}. A. ti] -S?5._t2lt)t) {ii} —t,5tltl B. {1'} —S?5,f}f}f} {ii} NoChange C. {i} |$T5,UUU {ii} +1.5[ll] D. {i} Nochange {a} -1.snn E. Stockholders equity will decrease by $T3.Sflfl as a result of the closing entries made to these particular accounts. 25. Please assume that in addition te the intiannatien already preyidedt Splendid reperted the following aeeeunt balances in its Statement el'Steekhelders Equity: 1 ] flflflfi ] 1"} | ."21'H'J'H Retained Earnings ZSICIE'JICI TSIIII'H'II Fapital Steele Eiflflfl lit-Fm What was the ame unt at" dividends declared during the year [if any}? A. $2 5 ,t'lt'ltl E. ii 5t} Hill] C . $ T S .1300 1}. $ I 2 Edi-1U E. Ne dividends were deelared during EDDIE. 26. [n the faets of the problem yen were teld that Splendid awed ii | .5434?! ef salaries as of December 313d. Please assume that the empiuyees of Splendid werk thday thrtrugh Fridayr and are paid every ether Friday. Un payday, Splendid paid sasaa of wages fer the two 1week pay peried ending an that day. Given Splendid's year-end accrual of $ | ,Stltl, en what day of the week did Deeernher 3 | st fall? A. Man day B. Tuesday C . 1|Nedn esday D. Thursday E. Fri da y 2?. What entry would Splendid reeerd an payday (he. in January] to record the payrell'ir A. Debit Credit Salaries Expense- 2.50:] Cash. 2.5m] B. Debit Credit Salary Expense 2.5m Salary Payable 1.5m] Cash IJCIElU C. Dam Credit Salary Expenau lflflfl Salary Payable LSEJH Cash area D. Debit Credit Salary Ex pens: I.Sflfl Salary Payable |,I.'lI:'.II:l Cal-ah 2.5flfl E. The salaries. 1were aeerued al Dee. 3151 as such no entry weuld be needed in January. ...
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This note was uploaded on 02/14/2011 for the course ACCY 202 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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Midterm Form D - |. Which of the following manufacturers...

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