Marco Company acquired land and buildings for
$1,000,000. The land is appraised at $450,000 and
the buildings are appraised at $800,000. The debits
to the Land and Buildings accounts will be:
A) Land $360,000; Building $640,000.
B) Land $500,00
A company purchased medical equipment for
$100,000 on January 1, 2009. The company
determined that the yearly depreciation expense is
$10,000. What will be the ending balance in the
Accumulated Depreciation Medical Equipment at
December 31, 201
Acquisitions of treasury stock are reported on a
Statement of Cash Flows as:
A) financing activities.
B) investing activities.
C) operating activities.
D) either investing activities or operating activities.
A company sold an unused
The continuity (going-concern) assumption of
A) enables accountants to ignore the effect of
inflation in the accounting records.
B) holds that the entity will remain in operation
long enough to use its existing assets.
The most important internal control over cash from
accounts receivable payment is to:
A) have all customers pay by check.
B) separate cash-handling duties from cashaccounting duties.
C) separate cash-handling from the mailroom.
D) do none of th
The part of the bond that obligates the issuing
company to pay the par value of the bond at a
specific future time is called the:
A) issue date.
B) due date.
C) maturity date.
D) payment date.
Monthly sales were $150,000. Warranty co
Trudy Corporation has $10 par value Common Stock
with 1,000,000 shares authorized, and a value of
$7,000,000 before purchasing 3,000 shares of common
stock. The resulting number of common shares issued
and outstanding is:
A) 750,000 shares issu
Herbert Company deposited $25,000 in its bank on
the same day as - but after - the bank prepared
Herbert Companys bank statement. The deposit
should appear on the bank reconciliation as a(n)
_ and is called a(n) _.
A) addition to the bank balan
Consider the following transactions:
I. Owners invested $8,000 cash to begin the
II. Provided services for cash, $6,000
III. Provided services on account, $4,000
IV. Paid cash for expenses, $7,500
How much net income did the business e
The balance in the Unrealized Gains and Losses on
Available-for-sale Securities account appear in
which financial statement?
A) The balance sheet as a contra asset account.
B) The income statement under Other Expenses and
C) The balance
Five procedures that an auditor should perform in determining whether to accept a client are:
A. Communicate with the previous auditor(s) with the clients permission
B. Evaluate the clients potential risks by discussing with the client
The primary consideration when determining materiality is the expected users of the financial
statements and their needs. Because financial information is prepared for multiple users for
different purposes, different materiality bases must be conside
Case 5.6 Sarbox Scooter, Inc.
1A. When considering the significance of an account, an auditor must evaluate both quantitative
and qualitative characteristics of an account. An account that represents a large amount
comparative to sales or income si
1. The audit of cash is typically a routine part of the audit, but it is also important for other
reasons. The majority of a companys transactions go through the cash account, and this
high volume of transactions puts the account at high risk for errors a
1. I dont think aggressive accounting or financial statement fraud is necessarily common in practice,
but situations like the one presented in the case probably occur frequently and go unnoticed.
2. Management violated the occurrence financial st
1. Auditing Standards Section 329 (AU 329) Substantive Analytical Procedures states that
analytical procedures are used as a substantive test to obtain evidential matter about
particular assertions related to account balances or classes of transa
Journal Entries for Budgeted Activties
To record purchase of RM for 99 units (69C & 30F)
record labor accumulated in WIP-C
Class Problem 1 - Solution
Finished goods inventory, 2/26/2009 = $50,000
Work-in-process inventory, 2/26/2009 = $28,000
Direct materials inventory, 2/26/2009 = $62,000
These answers are obtained by working from the known figures to the unknowns i
Class Problem 19 Standard Costing - Solution
a. Price variance per pound = Dollar Price Variance / Pounds purchased = $4,950 / 165,000 = $0.03 (f)
b. Actual price per pound = $729,300 / 165,000 = $4.42
Standard Price per pound = $4.42 + $0.03 = $4.45
Class Problem 11 Cost Allocation - Solution
a. 1. Determine the full cost of Producing Department A, using the Direct Method
20/45 x 7,800 = 3,467
15/55 x 31,100 = 8,482
30/40 x 16,400 = 12,300
Class Problem 22 - Solution
a. Compute the total Actual fixed overhead cost.
Standard Fixed OH Cost per labor hour = Budgeted Fixed OH / Budgeted Production in labor hours
$4.10 = BFOH / 97,000
BFOH = $4.10 x 97,000
BFOH = $397,700
Actual total Fixed OH =
Class Problem 3 SOLUTION
a. The company should use direct labor because it is a labor-intensive firm, with many
skilled craftspeople on the payroll. More than likely, a majority of overhead is driven by
people rather than machine operation.
b. $300,000 /
The Nature of Real
Estate and Real
Real Estate is Property
Two types of property:
physical assets that can be owned
Can be real or personal property
Non-physical assets such as stocks, bonds,
New operating loss
Net business loss
Reduced by non business income excess of nonbusiness deductions
Increased by a deductible causalty or theft loss
The NOL is not increased by the exemption deduction
Gross business income
Cash operating expense
ERP Simulation Game
A Serious Game
Powered by ERPsim
Compatible with SAP ERP ECC. 6.0 & 6.4
Last Modified : April 5th 2016
1. Chapter 12 discusses the basic conceptual and reporting issues related to intangible
Characteristics of Intangibles
2. (L.O. 1) The characteristics of intangible assets are: (1) they lack physical existence, and
(2) they are not