Exam 2 - Spring 2011

Exam 2 - Spring 2011 - ACCT 2103 Spring 2011 Exam 2 Name: M...

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Unformatted text preview: ACCT 2103 Spring 2011 Exam 2 Name: M Monday/Wednesday seat: M/W Section (Left, Center, or Right) \Zi‘gfiw‘: M/W Row M/W Seat Friday Instructor (circle one): Jimmy Downes / Abbie Field / Brad King / Aria Ghajar Class Time (circle one): 8:30 / 2:30 You must turn in both your exam pages and your green scantron. Do not complete your green scantron until completely finished with the exam. Record your name, class time (8:30 or 2:30), and test version number on the scantron. The test version number is provided on the last page of the exam. Do n_ot open or turn over your exam until your instructor tells you to begin. It is a Violation of the ethical code of conduct to (1) provide any information regarding this exam to a student in a later exam section or receive information from a student in an earlier exam section and (2) use a programmable calculator with memory. A violation of this code of conduct may result in an F! for the course. Multiple Choice Questions Identifiv the letter of the choice that best completes the statement or answers the question. *I‘Q/l/slorthwest Fur Co. started the year with $94,000 of merchandise inventory on hand. During the year, $400,000 in .: merchandise was purchased onfiachggfwith credit terms of 1/15, n/45. Northwest paid freight-in charges of $7,500. _ t. / 9 Merchandise with an invoice'amoun 0 "$5,000 was returned for credit. The purchase discount was for $3,950 (1% of purchases after returns). Cost of goods sold for the year was $380,000. What is ending inventory? A. $112,490. {Vigor} .,. _ . __ I . B_ $120,300. RPS - \301 ‘l‘ QWCVY‘S 'l 4063 si ig’soo' -; 014,000». $0,000 4 7,900 -Spoo «mac—380,069 i/ZfDuring 2012, Bears Inc. recorded credit sales of $500,000. Before adjustments at year— ‘receivable of $300,000, of which $50,000 is past due, and the allowance account had a credit balance of $2,500. ' Using the aging of receivables approach, what would be the adjustment assuming Bears expects it will not to collect 5% of thegamount not yet past due and 20% of the amount past due? 4 Bad Debt Expense 22,500 end, Bears has accounts Allowance for Uncollectible Accounts 22,500 sew“ . L.) W B. Bad Debt Expense 25,000 Allowance for Uncollectible Accounts 25,000 l2,990 Bad Debt Expense 20,000 7; m 000 \ 7 , ce for Uncollectible Accounts . 20,000 jldUAllowance for Uncollectible Accounts 20,000 ‘ "2:509 Bad Debt Expense 20,000 zq/ooa 3. When $2,500 of accounts receivable are determined to be uncollectib company record to write off the accounts using the allowance method? A. A debit to Allowance for Uncollectible Accounts and a credit to Bad Debt Expense. B. A debit to Bad Debt Expense and a credit to Allowance for Uncollectible Accounts. C. A debit to Bad Debt Expense and a credit to Accounts Receivable. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable. 1e, which of the following should the , C. An asset account. D. A permanent equity account. 5 ershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the ’gj‘paint upon being off cred a 15% price reduction. Gershwin would record this reduction by crediting Accounts Receivable a o. n ' ' -, , A o l . B. Sales Discounts. C. Sales Revenue. D. Sales Returns. I gus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property { $5,000, and title insurance of $800. The $5,000 in property taxes includes $4,000 in back taxes paid by Real ' s on behalf of the seller and $1,000 due for the current year after the purchase date. For what amount should '78 gave 72000 4: LlISQO 3143‘: 300 .fiwfiw 5Q 00 9 3'9“ g 1 00 O) _,/-7./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 return. alesdiscount. _C.’Sales allowances. Bad debt. i terprises purchased equipment for $60,000 on January 1, 2012. The equipment is expected to have a residual value of $5,000 at the end of five years. Using the double—declining balance method, L 60,000 X“? ' B. $22,000. c.$20,000. " r>_.$19,000. . nterprises purchased equipment for $60,000 on January 1, 2012. The equipment is expected to have a ear’life, with a residual value of $5,000 at the end of five years. Using the straight—line method, depreciation C. $11,000 and $33,000. ' /)‘29f‘ 2,000 and $36,000. W : ‘ I C rporation reported the following amounts for the year: ’ Net sales $296,000 g ; . y, I Cost of goods sold 138,000 \g‘gOOG If 3/ Average inventory 50,000 J— G‘m‘q‘s I16; QQQ Knfllin’y’sgross profit ratio is: i " [’Anxhony Corporation reported the following amounts for the year: 4"“. Net sales $296,000 “ Cost of goods sold 138,000 W Average inventory 50,000 “‘1 3C _.- Anthony's average days in inventory is: m A. 114 days. 9—91 ZINE: £9531) ‘ C. l 1 days. D. 170 days. ‘ . Eric Company has the following information: x Total revenues $860,000 Sales returns and allowances 50,000 TO} Kev "' 50565 WWW/1‘1 MUMS Sales discounts 30,000 Ending inventory 100,000 What is the amount of net revenues for Eric Company? 1&0 mo '2’" «SQPO >32 $330,00. ' E$680,000. W K $230,000. Bad Brads BBQ purchased a piece of equipment by paying $5,000 cash. They also incurred a shipping cost of .cfi‘f$400 to get the equipment to its factory. The fair value of this equipment is $7,000. For what amount should Bad r/I/ 1" I Brads BBQ record the equipment? 93.2 C. $7,000. D. $7,400. 14. The distinction between operating and nonoperating income relates to: A. Consistency of income stream. B. Reliability of measurements. rag; gIEErinmpal actrvrtiesflof the’reporting entity. . 'nui y o incom . 15. Merchandise sold FOB destination indicates that: A. The merchandise will not be shipped until payment has been received. The seller transfers title to the buyer once the merchandise is shipped. 11 Ski ed. . . ‘ V :0 W‘MN»» The seller holds tit e u 1 t _e mercfifigme buyer's locatl (LET-Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45 on April 12 of the , urrent year with terms 1/ 10, n/60. What would Oswego record on April 30, assuming the customer made the correct payment on that date? A. Cash 46,000 Accounts Receivable 45,540 Discounts Receivable 460 B. Cash 46,000 Accounts Receivable 45,540 460 D. Cash 46,460 Accounts Receivable 46,000 Interest Revenue 460 17:6restview Estates purchased a tractor on January 1, 2012, for $65,000. The tractor's useful life is estimated to be 70,000 miles and has a residual value of $5,000. If Crestview used the tractor 5,000 miles in 2012 and 3,000 miles in ‘2013, what is the balance for accumulated depreciation at the end of 2013 using the activity method? A. $38,000. fi K 0051 " rv m6 000. D.$10,000. (A a miles x nudes v5 . . . . . EC; C ,3 ‘g The followmg information pertains to Julia & Company: E I Q 9 ‘55,; March 1 Beginning inventory 30 units @ $5 (v V3 431% 1;; March 3 Purchased 15 units @ $4 0 /’—— March 9 Sold 25 units @ $8 \\ 0 What is the cost of goods sold for Julia & Company assuming it uses LIFO? Z \s ‘ ' A H 4 Q _‘_19./On September 1, 2012, Middelton Corp. lends cash and accepts a $1 note receivable that offers 12% interest ,,}‘-“;and is due in twelve months. How would Middelton record the year-end adjustment to accrue interest in 2012? v '/ ” A. Interest Revenue 60 Interest Receivable 60 CV! 75 B. Interest Receivable 120 Interest Revenue 120 C. Interest Receivable 60 Interest Revenue 60 magagfi ‘6“ Interest Receivable 40 Interest Revenue 40 20. When using an aging method for estimating uncollectible accounts: A. Older accounts are considered more likely to be collected. B. The number of days the account is past due is not considered. 21. Oaneember 31, 2012, Mark Inc. esimes future bad debts to be $6,500. The Allowance for Uncollectible Accounts has a credit balance of $2,500 before any year—end adjustment. What adjustment should Mark Inc. record for the es ‘mated bad debts on ecember 312 2012? r I Bd et xense, $4 000; credit AllowanEETorUncollectible G ,300) ebit Allowance for Uncollectible Accounts, $9,000; credit - a Do Xpense, $6,500. m $500 C. Debit Bad Debt Expense, $6,500; credit Allowance for Uncollectible Accounts, $6,500. Gog Debit Bad Debt Expense, $9,000; credit Allowance for Uncollectible Accounts, $9,000. ’ / / The following information pertains to Julia & Company: 3% March 1 Beginning inventory 30 units @ $5 '“’ Q1: March 3 Purchased 15 units @ $4 fin March 9 Sold 25 units @ $8 is 3 What‘s the ending balance of inventory for Julia & Company assuming that it uses FIFO? / D. $1 10 M _ _ On January 1, 2010, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line deprecratlon {itinethod The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2012, 4 I Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 2012? A. Gain, 22,000. E Loss :18 000 pQ/OOQ 3‘3 f" ?‘ Emilie a 3' K 2 - a 7 ' / “I ' 1 .iéaa‘xni ,C.Ga' 00. g 35:0” "5 x; . Loss, $3,000. , poo ”‘ ’ X ”’“ a‘fl Sales revenue A. $380,000 B. $200,000 " 0000 3 210,000 Nonoperating expenses Operating expenses Income tax expense What amount will Spitzer report for operating income? insider the following year—end information for Spitzer Corporation: Cost of goods sold $420,000 a 800,0005 10,000 170,000 ’ 80,000 On July 8, Ray Inc. sold 100 printers to Office Rental Company at $600 each and offered a 2% discount for »~"payment within 10 days. On July 15, Office Rental Comp record on uly 15? , Cash Accounts Receivable B. Cash Accounts Receivable 2 Sales Discounts Accounts 7K Cash Sales Discounts Sales Revenue 26. The replacement of a major comp to 18 units per hour. The expenditur A. Repairs Expense. E. Maintenance Expense. 9241 Gain from Repairs. - al's receivables For the month of September, the com cost method (round the weighted-averag A. $116. as . D. $124. any paid the amount due in cash. What should Ray Inc. 60,000 60,000 58,800 58,800 [ U10 onent increased the productive capacity of equipment from 10 units per hour e for the replacement component should be debited to: '5‘ rage International reports net credit sales for the year of $240,000. The company's accounts receivable at the beginning of the year equaled $20,000 and the balance at the end of the year equaled $30,000. What is 06’: (WW 522065 turnover ratio? m , 285/Consider the following inventory transactions for September: ‘y Beginning inventory 15 units @ $3.00 Sept 12 Purchased 20 units @ $3.50 Sept 23 Purchased m 10 units @ $4.00 N $0,000/a [xx/g Mn 115 1 <3 70 M1” 33 _, "‘1 3 J Ho) pany sold 35 units. What is the cost of goods sold under the weighted-average e unit cost to four decimals if necessary)? 3159 “SW 2 Mix 350115 29. Which inventory method is better described as having a balance sheet focus and why is it considered as such? KELIFO; better approximates the value of ending inventory. a 4 IFO; better approximates i ento 7 cost neces a to generate revenue. [F' bt er approximates the value of ending inventory. ‘ I .’ 0; better a 3 men ory’c’os ecessary to generate revenue. / .jlfhe balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and _/(end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's profit margin? ‘ \ (I .- /‘\ 10% ago Ham v 1‘ / r - ., . / >330; loom Ruhr "lawn: " = ' >00 a: . i .--—--0575 ' 300/ hejr Mow D. 22% ' ' . __,/-a ‘ “a Sales 31. Which of the following is considered a "contra" account? A. Unearned Revenue B. Goodwill r r chcunfulatEH/fiepreciation. D D. osto 00 $801 . r ing financial information is from Cook Company: Accounts Payable $55,000 Land 90,000 1.— Inventory 10,500 Accounts Receivable 7,500 ~ Equipment 8,000 M r Unearned revenue 58,500 J Short-term Investments , 20,000 Notes Receivable (due in 8 months) 45,500 0-- Interest Payable 2000 Patents 75,000 "' What is the amount of long-term assets assuming the accounts above reflect normal activity? . $342 500. @s173,000> ‘ $273,500/ 98,000 Version #2 ...
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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 - Spring 2011 - ACCT 2103 Spring 2011 Exam 2 Name: M...

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