Exam 2 - Fall 2009

Exam 2 Fall 2009 - (Version Name Row ACCT 2103 Exam#2 Fall is provided 0 2009 n the last page of the exam 1 On July 1 2010 Larkin Co purchased a

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Unformatted text preview: (Version # Name ._.. Row ACCT 2103 Exam #2 Fall is provided 0 , 2009 n the last page of the exam) 1. On July 1, 2010, Larkin Co. purchased a $400,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2010 as follows: Demolition of existing building on site $75,000 Legal and other fees to close escrow 12,000 Proceeds from sale of demolition scrap 10,000 What would be the balance in the land account as of December 31, 2010? A. $477,000. * B. $400,000. C. $475,000. D. $487,000. Z'egg\ one? '; {4, :2 :3 33‘ 2. Tyler Toys has beginning inventory for the year of $18,000. During the “year, Tyler purchases inventory for $230,000 and has cost of goods sold equal to $233,000. Tyler‘s ending inventory equals: C? $15,000 v I - $19,000 Local-g: i w C. $21,000. ,1“ J ,5. m. , ‘ ., . , D. $18,000. 2 4;» G ,1). ha. . ‘c _r O 3. Crimson Inc. recorded credit sales of $750,000, of which $600,000 is not yet due, $100,000 is past due for up to 180 days, and $50,000 is past due for more than 180 days. Under the aging of receivables approach, Crimson Inc. expects it will not collect 1% of the amount not yet due, 10% of the amount past due for up to 5180 days, and 20% of the amount past due for more than 180 days. The allowance account had a debit balance ofmbefore adjustment. After adjusting for bad debt expense, what is the ending balance of theuamildwiance'accwnt? N A; $26,000 , A ._ . . $28,000 x . e L; 1 C. $29,000 $00 \ fl {j} :- . D. $27,000 UL." :’ r 1/ g1; 4. A building was purchased for $60,000. The asset has an expected useful life of 6 years and depreciation exp$ense each year is $9,000 using the straight—line method. What is the residual value of the building? A. 0 B. $15,000 C. $10,000 @. $6,000 5. Good, Inc. sold inventory for $1,200 that was purchased for $700. Which is the correct journal entry when Good sells the inventory using a periodv'W system? A. Debit costs of good sold $700; Credit inventory $700. B. Debit costs of good sold $1,200; Credit inventory $1,200 C. Debit inventory $700; Credit costs of good sold $700 D“ No entry is required for cost of goods sold and inventory. 6. When customers purchase products on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of a: A. Sales allowances. B. Sales return. ales discount. ‘ . Bad debt. 7. Bricker Enterprises purchased a machine for $200,000 on October 1, 2010. The estimated service life is ten years with a $20,000 residual value. Bricker records partial—year depreciation based on the number of months in service. Depreciation expense for 2010, using is: A. $15,000. W B. $13,500. - R ‘ .R is) 8. Given the informatioribfilgsy, what is the gross profit? Sales. ,_ 13200000} ' Accounts Receivable ‘“2‘5:000 Cost of Goods Sold ~"'I"1’5’0,0003 Beginning Inventory \‘IUKIO Ending Inventory 15,000 ® $50,000 a B. $55,000 /fi_ C. $75,000 3 7?" 24%;..“2; D. $45,000 fa“; 9. In a period when inventory costs are rising, the inventory method that most likely results in the highest ending y/inxgntory is: iji'AgFIFO. B. LIFO. C. Average cost. D. Lower-of-cost—or-market method. counts receivable and allowance for 010, Coolwear Inc. had balances in its ac f $48,400 and $940 (credit), respectively. determined that there should be an allowance 011,.would be: .;i During 2011, Coolwear wrote off $820 in for uncollectible accounts of $15140 at W: 10. On December 31, 2 uncollectible accounts 0 accounts receivable and December 31, 2011. Bad debt expense for 2 A. $820. B. $1,140. C. $320. gfi§::$1,020. 3w ir‘” ;;m. ;;4,-- ._-,-,__ d accepts a $1,000 note receivable that offers 12% Middelton Corp. issues cash an t revenue will Middleton Corp report during 2010? 11. On February 1, 2010, How much interes al interest and is due in six months. annu A. $100. 3- $240- \, 52:>:a a: , g i; ‘;* ii? . 60. ;*;a . $120. “ based on the percentage of accounts receivable. What effect will stimates uncollectible accounts the accounting equation? ' e of uncollectible accounts have on Decrease assets and decrease owners' equity ‘1 Decrease assets and decrease liabilities ets and decrease owners' equity decrease owners‘ equity 12. Shupe Inc. e C. Increase ass D. Increase liabilities and 13. The return on assets is equal to the: A. profit margin plus asset turnover. Mfgéprofit margirfififié‘é‘ sset turnover. *‘C. profit marginrhlnds asset turnover. D. profit margin divided by asset turnover. that cost $8,000. It had an estimated useful life of 4 years and no 14. Alloy Company purchased a computer d by the straight-line method and was sold at the end of the third year residual value. The computer was depreciate of use for $1,000 cash. Alloy should record: A. ne1ther a gain nor a loss - the gain that occurred in this case would not be recognized. a loss of $1,000. C. a gain of $1,000. D. ne1ther a gain nor a loss — the computer was sold at its book value. 15. The allowance for uncollectible accounts is: A. A contra revenue account. B. A liability account. C. An expense. ‘ v . \contra asset account. 16. Anthony Corporation reported the following amounts for the year: Net sales $296,000 Cost of goods sold 138,000 Average inventory 50,000 Anthony's inventory turnover ratio is: A. 2.14. K ,, B. 3.21. "9:91.23 :7; .76. r x): . 1 ' / : I,» if}: L “ :7:ng “Z, > . 2.42. - ~ ‘ .m - 1 r .v 4 z 1 f.-. 17. The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as: A. Expense in the period incurred ifffapitalized as part of the office building Goodwill D. Patent 18. Scrubs Company purchased five new dishwashers by paying cash of $6,000. Thefiishwashers'wfair‘marketw V‘Wthemrehmfimk The company incurred $400 in transportation, $300 installation fees, and paid a EGQWgarparkmnghilemad-ishwashersavere being delivered. For what amount will Scrubs record the dishwashers? A. $7,300 TB. $6,700 C. $6,600 D. $6,900 19. Inventory records for Dunbar Incorporated revealed the follow Number Unit Date Transaction of Units Cost Apr. 1 Beginning inventory 500 $2.40 400 2.50 Apr. 20 Purchase Dunbar sold 700 units of inventory during the month. Ending inventory assuming FIFO would be: A. $490. B. $470. ’62: $500. D. $480. BA Inc. drovetlrei‘rti‘uek‘ifiifim and'yfrgfiles, respectively, to deliver supplies * v ' - 2010 for $175,000 and the truck has nally purchased the truck at the be d 320,000 miles with an estimated residual value of $15,000, what amount of record inl 2011:11sing the activity method? 20. Dung£010and 2011, C to tlfir customers. If they origi an estimated life of 10 years an deprecation expense should CBA A. $16,000 @1311000 175.00 O “ ’chw c. $7,500 D. $18,500 1kg 0 , mo ,3: , hich one of the following regarding the book value of an asset is correct? reflects the original cost of the asset less accumulated depreciation. It is the fair value of the asset if the asset is sold to the market. C. The book value at the end of the year is the historical cost of the asse asset during the year. D. It is the historical cost at whi t minus the depreciation expense for that ch the asset was purchased. 0 c g! correct amount owed. A Cash 2,200 Notes Receivable 2,200 B. ~ ,1} a Cash 2,000 Interest Revenue 2 00 Notes Receivable 2,200 @ f: 000 \K K y éfl Cash 2,100 Interest Revenue L 100 Notes Receivable 2,000 D. Cash 2,100 Notes Receivable 2,100 23. Consider the year—end information for Phelps Corporation Net sales $340,000 Cost of goods sold 225,000 Administrative expense What amount will Phelps report for operating income? _, A. $65,000 B. $115,000 1 A 7’ I» h if m a p I 1, $10,000 C" { U ft;:»ii;::« i m) {V i L w ~r j , ‘ i :7 . $7,000 “’ c, g. :1; ltDseccfegges i1, 30 reported accounts receivable of $238,000 and an allowance for uncollectible cre 1 . n analysis of accounts receivable su I ggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amOunt of the adjusting entry for uncollectible accounts would e: A (M. 5:“, ¢( .( w w. $07,140, A €322; s: ,. 2 C. $7,740. D. $7,800. 25. The primary reason for the A. Simplified recordkeeping. ‘ simpler method to apply D. Better matching of physica 1 flow and cost flow. 26. Beverage International r receivable at the beginning of What is Beverage International's eports net cred popularity of LIFO is that it gives: lower income tax obligation. any balance of accounts 30,000. 00. The comp it sales for the year of $240,0 the end of the year equals S; the year equaled $20,000 and the balance at receivables turnover ratio. A. 1.5. 0, A r a a} n 9.6. we 3 ’ -- fl , r if») c. 8.0. At»; ‘ "' “' ’“ D. 12.0. 27. Inventory records for Dunbar Incorporated revealed the following: Number Unit Date Transaction of Units Cost Apr. 1 Beginning inventory 500 $2.40 Apr. 20 Purchase 400 2.50 Dunbar sold 700 units of inventory during the month. Cost of goods sold assuming LIFO would be: A. $1,700. @$1,720. c. $1,710. D. $1,730. 28. J CP Incorporated sold some offi the sale would include which of the value of $15,000 and a useful life of 10 years ber 31, 2010. The journal entry to record ce equipment for $58,000 on Decem following if the original cost of the equipment was $80,000 with a residual y 1, 2007 and ? Assume the machine was purchased on J anuar depreciated using the straight-line method. A. Gain of $2,000 ® Gain of $4,000 C. Gain of $24,000 D. Loss of $6,000 C): O ‘3! CC? C) Water District #45 on April 12 of the of $46,000 to Southeast 10, assuming the customer made the provides services 1d Oswego make on June 29. Oswego Clay Pipe Company 0. What entry wou current year with terms 1/15, n/6 correct payment on that date? fl“: QL/Caih 46,000 1 Accounts Receivable 46,000 B. Cash 46,460 Accounts Receivable 46,000 Interest Revenue 460 C. Cash 46,000 Accounts Receivable 45,540 Discounts 460 Receivable D. Cash 46,000 Accounts Receivable 45,540 Interest Revenue 460 ices to a customer for $8,000 with credit terms ear, Flores Mills provides serv 17. How would Flores record the collection of 30. On November 10 of the current y November 2/10, 11/30. The customer made the correct payment on cash on November 17‘? (7)0 if A. L H s. ,7 1w" '- 4 ' ' 4! w we Sales Discounts ' Accounts +Receivable 8,000 B. 7 Cash 7,840 Sales 160 Accounts Receivable 8,000 C. Cash 7,840 Accounts Receivable 7,840 D. Cash j 8,000 Accounts Receivable 8,000 31. Inventory records for Dunbar Incorporated revealed the following: Number Unit Date Transaction of Units Cost Apr. 1 Beginning inventory 500 $2.40 Apr. 20 Purchase 400 2.50 Dunbar sold 700 units of inventory during the month. Ending inventory assumingilglfflxo would be: A. $470. 2-..». B. $500. C. $490. D. $480. 3 . Trojan, Inc. developer/{Ea new horse transport device ~' nd‘. incurred research-and developmentficosts of $ 25,0 . ather than (fonéinue withf e' own research, Trdj an decided togfiuréhase a patent similar design fr m irgil,‘1nc. for $300,000. What are he total assets and expenses forgthese developments“? A. A ets $526,000; axpen§es $0 ] j X “ sets $223,000; xpensges $3 0,000 f ,x 4‘ sets $300, 0 ,Expensgs $ 25,000 ‘- Ssets $0; Expenses $525: 0 33. Oswego Clay Pipe Company, sefi®of $46,000 to Southeast Water District #45 on of the current year with terms 1/15, n/60. What entry would Oswego make on April 12?”, .. A. Accounts 45,540 ; If... ‘ 5. Receivable ‘ _ Sales Discounts 460 V "- L Sales 46,000 (50/ L: n. 515,0 B. Accounts 45,540 Receivable Sales 45 ,540 C. Accounts 46,000 Receivable Sales 45,5 40 ' Sales Discounts 460 «w E? 5illiccounts 46,000 Receivable Sales 46,000 C Version 1 ...
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This note was uploaded on 01/08/2012 for the course ACCT 2103 taught by Professor Burnett during the Fall '08 term at Oklahoma State.

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Exam 2 Fall 2009 - (Version Name Row ACCT 2103 Exam#2 Fall is provided 0 2009 n the last page of the exam 1 On July 1 2010 Larkin Co purchased a

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