acc362-final exam-1

acc362-final exam-1 - Final Exam: Financial Accounting I...

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Final Exam: Student Name: ____________________ Financial Accounting I Instructor: Steven McAlister _________ 5th Edition Section # BSBH0WFTA6 Date 04-18-2011 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: Bono Company recently incurred the following costs: (1) Purchase price of land and dilapidated building $350,000 (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 Bono's books at a. $880,000. b. $924,000. c. $963,000. d. $1,192,000. ____ 2. Land should be recorded on Bono's books at a. $350,000. b. $364,000. c. $403,000. d. $433,000. ____ 3. Carson Supply bought equipment at a cost of $72,000 on January 2, 2005. It originally had an estimated life of ten years and a salvage value of $12,000. Carson uses the straight-line depreciation method. On December 31, 2008, Carson decided the useful life likely would end on December 31, 2012, with a salvage value of $6,000. The depreciation expense recorded on December 31, 2008, should be a. $6,000. b. $6,600. c. $9,600. d. $13,200. ____ 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. 1
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Final Exam: Student Name: ____________________ Financial Accounting I Instructor: Steven McAlister _________ 5th Edition Section # BSBH0WFTA6 Date 04-18-2011 ____ 5. Riodan Company sold old equipment for $35,000. The equipment had a cost of $70,000 and accumulated depreciation of $42,000. The entry to record the sale of the equipment would include a a. loss on disposal of $35,000. b. gain on disposal of $35,000. c. loss on disposal of $7,000. d. gain on disposal of $7,000. ____ 6. The cost of intangible assets should be a. amortized over the assets' estimated useful life, or legal life, 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.
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This note was uploaded on 04/15/2011 for the course ECO 362 taught by Professor Mcalister during the Spring '11 term at University of Phoenix.

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acc362-final exam-1 - Final Exam: Financial Accounting I...

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