Question Details

(Solved) Apply the accrual basis of accounting unless specifically instructed to do otherwise. Consider the following cash flow items: Pay amount owed to...


3. At the beginning of January 2013, Aeropostale had a balance of $10,000 in its Retained Earnings account. During the month of January 2013, the company engaged in the following transactions? What was the balance of the company’s Retained Earnings account at the end of January?

--Issued common stock for cash, $6,100.

--Provided services to customers on account, $5,500.

--Provided services to customers in exchange for cash, $3,900.

--Purchased equipment on January 31, paying cash of $5,100.

--Paid rent for January, $1,800.

--Sold equipment for $800 more than book value.

--Paid workers’ salaries for January, $2,500.

--Paid dividends to stockholders, $800.

a. $21,200 c. $14,300 e. $10,000

b. $15,100 d. $20,400

Note: Apply the accrual basis of accounting unless specifically
instructed to do otherwise.
1. Consider the following cash flow items:
Pay amount owed to bank for previous borrowing.
Pay utility costs.
Purchase equipment to be used in operations.
Purchase office supplies to be used the next month.
Purchase one year of rent in advance.
Pay workers salaries.
Pay for research and development costs.
Pay taxes to the IRS.
Sell common stock to investors.
How many of these cash flow items involve investing activities?
a.
b.
c.
d.
e. 2. None
One
Two
Three
Four Listed next are several transactions for Parton & Owens
Productions.
--Issued common stock in exchange for cash.
--Purchased equipment by signing a note payable.
--Paid rent for the current month.
--Purchased equipment for cash.
--Sold treasury stock.
--Purchased office supplies on credit.
--Paid insurance for the current month.
--Collected cash from customers on account.
How many of these transactions increased the company’s total
assets?
a.
b.
c. One
Two
Three d.
e. Four
Five 2 3. At the beginning of January 2013, Aeropostale had a balance of
$10,000 in its Retained Earnings account. During the month of
January 2013, the company engaged in the following
transactions? What was the balance of the company’s Retained
Earnings account at the end of January?
--Issued common stock for cash, $6,100.
--Provided services to customers on account, $5,500.
--Provided services to customers in exchange for cash, $3,900.
--Purchased equipment on January 31, paying cash of $5,100.
--Paid rent for January, $1,800.
--Sold equipment for $800 more than book value.
--Paid workers’ salaries for January, $2,500.
--Paid dividends to stockholders, $800.
a.
b. 4. $21,200
$15,100 c.
d. e. $10,000 Of the following accounts, how many have a normal debit
balance.
Cash
Service Revenue
Accounts Payable
Treasury Stock
Retained Earnings
a. Two
b. Three 5. $14,300
$20,400 c.
d. Salaries Expense
Utilities Expense
Warranty Expense
Dividends
Common Stock
Five
Six e. Four Consider the following transactions of Berling Inc.:
January
January
January
January
January
January 2:
4:
6:
8:
9:
10: Paid a cash dividend
Provided services to customers on account
Issued common stock in exchange for cash
Borrowed cash from the bank and signed a note
Wrote off an account receivable
Purchased office supplies on account 3 How many of these transactions resulted in a debit to an
expense account?
a.
One
c.
Four
b.
Two
d.
None
Facts for Questions 6-8: e. Three Goss & Caine, Inc., prepares monthly financial statements for
its bank. The company’s November 30 and December 31 (2013)
adjusted trial balances included the following amounts. Supplies
Prepaid Insurance
Salaries Payable
Unearned Revenue November 30
Debit
Credit
2,600
4,800
3,000
4,400 December 31
Debit
Credit
3,100
4,400
5,000
4,000 Other information:
--Purchases of supplies in December totaled $1,700.
--No insurance payments were made in December.
--During December, $3,000 of salaries for November were paid by
Goss & Caine.
--On November 1, a tenant paid Goss & Caine $4,800 in advance
rent for the period November 1, 2013, through October 31,
2014.
6. Goss & Caine’s adjusting entry for supplies used during the
month of December included a
a.
b.
c.
d.
e. 7. debit of $1,200 to Supplies Expense.
credit of $500 to Supplies.
credit of $2,200 to Supplies.
credit to Supplies Expense of $1,100.
None of the above. Goss & Caine’s December 31 adjusting entry for salaries
included a
a.
b.
c.
d.
e. debit of $5,000 to Salaries Expense.
credit of $5,000 to Salaries Payable.
credit of $3,000 to Salaries Payable.
debit of $5,000 to Salaries Payable.
both a & b 4 8. Goss & Caine’s December 31 adjusting entry related to unearned
revenue included a
a.
b.
c.
d.
e. 9. On November 28, 2013, Witcher & Mitchell received a $3,000
payment from a customer for services that were to be provided
over the following three months (December, January, and
February). The company credited the $3,000 receipt to Unearned
Revenue. If an equal amount of service was provided each
month, Witcher & Mitchell’s December 31 adjusting entry
included a
a.
b.
c.
d.
e. 10. debit to Rent Revenue of $800.
credit to Unearned Revenue of $400.
debit to Unearned Revenue of $800.
credit to Rent Revenue of $800.
debit to Unearned Revenue of $400. $1,000
$2,000
$1,000
$2,000
$1,000 debit to Service Revenue.
credit to Service Revenue.
debit to Unearned Revenue.
credit to Unearned Revenue.
credit to Unearned Revenue. “Purchased supplies on account during April. The supplies were
paid for and used in May.” What was the impact of this
transaction during April on the following three items:
Cash
Balance
a.
b.
c.
d.
e. No effect
Decrease
Decrease
No effect
No effect Cash-basis
Net Income
No effect
Decrease
Decrease
No effect
Decrease Accrual-basis
Net Income
Decrease
No Effect
Decrease
No effect
Decrease 5 11. Ellison & Evans’ general ledger showed a checking account
balance of $22,870 on June 30, 2013. The June cash receipts of
$1,585, included in the general ledger balance, were placed in
the night depository at the bank on June 30 and processed by
the bank on July 1. The bank statement dated June 30 showed
bank service fees of $95. The bank processed all checks
written by the company by June 30 and listed them on the bank
statement, except for one check totaling $1,210. The bank
statement showed a balance of $22,400 on June 30.
What was the adjusted balance of Ellison & Evans’ cash balance
on June 30, 2010?
a. $22,825
b. $24,185 12. c.
d. $22,870
$22,775 e. Some other amount At the beginning of 2013, Gonzales Acosta & Ngo (GAN) had
accounts receivable of $84,000. At the end of 2013, the
company had accounts receivable of $72,000. During 2013, GAN
had total sales of $1,100,000, all of which were credit sales.
What was this company’s average collection period for 2013?
a.
b.
c. 15.49 times
14.10 times
17.19 times d.
e. 23.6 days
25.9 days 6 13. On March 17, Fitzpatrick Lumber sold building materials to
Krumme Limited for $15,000 with terms of 3/10, net 20. What
amount did Fitzpatrick record as revenue on March 25 when
Krumme paid for the building materials?
a.
b. 14. $15,000
$14,550 c.
d. $10,500
Zero $15,450 On April 19, Bennett & Bohn installed plumbing in a new home
for $3,500 on account. However, on April 24, the plumbing work
did not pass inspection and Bennett & Bohn granted the customer
an allowance of $700 because of the problem. The customer made
full payment of the balance owed, excluding the allowance, on
April 30. The entry recorded on April 24 by Bennett & Bohn
included a. a debit to Sales Allowances.
b. a credit to Sales Allowances.
15. e. c. a debit to Service Revenue
d. a credit to Accounts Payable Coe Wang Bakeries had the following balances on December 31,
2013, before any adjusting entries: Accounts Receivable =
$93,800; Allowance for Uncollectible Accounts = $6,100 (debit).
Coe Wang estimates uncollectible account expense based on an
aging of accounts receivable as shown below:
Age Group
Not yet due
0-30 days past due
31-60 days past due
More than 60 days
past due Accts. Rec’ble Estimated Percent
Uncollectible $50,000
20,000
18,000 4%
8%
10% 5,800 50% 7 What amount of bad debt expense did Coe Wang Bakeries record in
its December 31, 2013, adjusting entry?
a.
b.
c. $10,200
$13,800
$14,400 d.
e. $4,100
some other amount Facts for Questions 16-19: During 2013, Shi & Li sold 800 buckets.
The selling price per bucket was $80. Shi & Li had the
following beginning inventory and purchase transactions during
2013. The company uses a periodic inventory system.
Inventory,
Purchase:
Purchase:
Purchase:
16. $16,000
$4,000
$8,500 d.
e. $21,750
Some other amount What was this company’s cost of goods sold for 2013 assuming
that it uses the LIFO method?
a.
b.
c. 18. January 1, 2013
April 24, 2013
July 31, 2013
December 7, 2013 Unit Cost
$20
30
35
50 What was this company’s ending inventory for 2013 assuming that
it uses the FIFO method?
a.
b.
c. 17. Units
300
350
250
100 $27,000
$24,800
$26,250 d.
e. $21,750
Some other amount What was this company’s cost of goods sold for 2013 assuming it
uses the average cost method?
a.
b.
c. $27,000
$24,200
$26,250 d.
e. $21,750
Some other amount 8 19. Under which inventory cost flow assumption would Shi & Li have
the highest cost of goods available for sale during 2013?
a.
b.
c.
d.
e. 20. LIFO
FIFO
Average cost
Either LIFO or FIFO
That figure would have been the same under all three
methods. Sorrels & Sutter reported the following amounts in its 2013
income statement.
Net sales
$440,000
Advertising expense
20,000
Interest expense
10,000
Salaries expense
60,000
Utilities expense
15,000
Income tax expense
20,000
Cost of goods sold
260,000
What was this company’s operating income for 2013?
a.
b.
c.
d.
e. $120,000
$85,000
$110,000
$95,000
Some other amount 9 21. Patel & Price had the following inventory data at the end of
2013, prior to any adjusting entries.
Inventory Item
Neds
Nicks
Lohrs Quantity
300
700
200 Cost
$10
$11
$12 Market
$15
$10
$10 After applying the lower-of-cost-or-market method, the
accountant for Patel & Price prepared an adjusting entry.
entry . . .
a.
b.
c.
d.
e.
22. decreased the company’s
increased the company’s
increased the company’s
increased the company’s
none of the above That cost of goods sold.
inventory.
cost of goods sold.
stockholders’ equity. On April 30, 2014, Valles Company acquired all of the
outstanding common stock of Brumley Inc. for $150. The book
values and fair values of Brumley’s assets and liabilities are
shown next:
Book Value
Fair Value
Current assets
Property & equipment $42
66 $90
99 10 Current liabilities
Long-term liabilities 10
42 10
40 Calculate the amount paid for goodwill.
a.
b. $92
$51 c.
d. $94
$11 e. some other amount Facts for Questions 23-25: Petrocchi Corp. purchased a new
hydraulic press to use in the production of elrods. The
hydraulic press was purchased on January 1, 2009, and cost
$600,000. The company estimated that the machine would have a
residual value of $100,000 at the end of its useful life of
five years. The following schedule indicates the number of
elrods expected to be produced each year of the life of the
hydraulic press (assume that actual production in each year was
equal to the estimated production).
2009
2010
2011
23. 2012
2013 8,000 elrods
9,000 elrods Assuming that the company applied the double-declining balance
method, how much depreciation expense was recorded on the
hydraulic press in 2010?
a.
b.
c. 24. 10,000 elrods
6,000 elrods
7,000 elrods $200,000
$144,000
$120,000 d.
e. $240,000
None of these Assuming that the company applied the activity-based method,
what was the balance of the machine’s accumulated depreciation
account at the end of 2011 (after adjusting entries)? 11 a.
b.
c. 25. $200,000
$ 87,500
$287,500 d.
e. $92,500
None of these If the hydraulic press was sold at the end of 2010 (after the
2010 depreciation expense was recorded), what was the gain or
loss on disposal if the selling price was $425,000 and the
company used the straight-line depreciation method?
a.
b.
c. $25,000 Gain
$125,000 Gain
$25,000 Loss Facts for Questions 26-27:
for two companies. d.
e. $50,000
None of these Listed next are selected financial data
Davis, Inc. Current Assets:
Cash and cash equivalents
Current investments
Net account receivables
Inventory
Other current assets
Total Current Assets $ 3,400
4,100
3,600
5,200
1,100
$17,400 Douglas, Inc.
$ 2,600
3,200
1,900
4,700
1,600
$14,000 12 Current Liabilities:
Accounts payable
Short-term debt
Other current liabilities
Total Current Liabilities $ 1,700
3,500
4,100
$ 9,300 $ 3,000
2,400
1,400
$ 6,800 26. Which company has the more impressive acid-test ratio?
a.
b.
c. 27. Choose the correct answer:
a.
b.
c.
d. 28. Davis
Douglas
The two companies have identical acid-test ratios. Davis
ratio
Davis
ratio
Davis
ratio
Davis
ratio has more working
than Douglas
has less working
than Douglas
has more working
than Douglas
has less working
than Douglas capital but a lower current
capital and a lower current
capital and a higher current
capital but a higher current On October 1, 2013, Carlson’s Closets borrowed $50,000 from
Quinones National Bank. Carlson’s signed a nine-month, 6% note
payable. Interest was payable at maturity. Carlson’s year-end
is December 31. Carlson’s journal entry to record the payment
of this note will include a
a. debit to Interest Receivable of $750.
b. debit to Interest Expense of $1,500. 13 c. credit to Interest Expense of $750.
d. credit to Interest Payable of $1,500.
e. debit to Interest Expense of $2,250.
29. How many of the following items are current liabilities?
Accounts payable
Sales allowances
Customer advances
Purchase Returns
Unused line of credit
Commercial paper
a. One
b. Two
c. Three 30. Four
Five On January 1, 2014, Parker Company issued $500,000 of 8% bonds due in
10 years. The bonds sold for $467,480 when the market interest rate was
9%. What will be the “debit” to Interest Expense on June 30, 2014, the
first semi-annual interest payment date?
a. $20,000
b. $18,744 31. d.
e. c.
d. $21,037
$19,201 e. $22,500 On January 1, 2014, Esparza Company issued $600,000 of 8% bonds due
in 15 years. The market interest rate on the issue date was 7%. What will
be the “credit” to Cash on June 30, 2014, the first semi-annual interest
payment date?
a. $24,000
b. $21,000 c.
d. $48,000
$19,201 e. Some other amount 14 32. On January 1, 2013, Cochran & Collier issued $50 million of 8%
bonds, due in 10 years, with interest payable semi-annually on
June 30 and December 31 each year. What was the issue price of
these bonds if the market rate was 7% on the date they were
issued?
a. $51,244,600
b. $53,553,300 c.
d. $48,128,500
$46,602,578 e. $55,101,900 FACTS FOR QUESTIONS 33-35: Presented below are selected financial
data for three competing companies for a recent year.
Total assets
Total liabilities
Total stockholders’ equity
Sales
Interest expense
Income tax expense
Net income
33. Ashcraft
$17,000
9,500
7,500
18,000
900
1,000
1,900 Bowers
$15,300
9,700
5,600
17,400
800
1,200
2,200 Which company has the highest debt-to-equity ratio?
a. Ashcraft Cooper
$13,200
6,700
6,500
13,900
900
1,400
2,100 15 b. Bowers
c. Cooper
d. Cannot be determined given information provided.
34. Which company has the poorest or least impressive times
interest earned ratio?
a.
b.
c.
d. 35. Which company has the highest profit margin ratio?
a.
b.
c.
d. 36. Ashcraft
Bowers
Cooper
Cannot be determined given information provided. “Re-issued 1,000 shares of treasury stock. The stock had been
originally issued for $70 per share and reacquired for $60 per
share. The stock was re-issued at $55 per share.” The journal
entry for this transaction included a
a.
b.
c.
d.
e. 37. Ashcraft
Bowers
Cooper
Cannot be determined given information provided. debit to Treasury Stock.
credit to Retained Earnings.
debit to Loss on Sale of Treasury Stock.
debit to Additional Paid-in Capital.
None of the above Daly Avondet & D’Amato (DAD) reported net sales of $900,000 in
2013 and a net income of $150,000. The company’s average 16 common shares outstanding during 2013 was 100,000. The par
value of the company’s common stock was $10 per share and was
sold for an average price of $20 per share. At the end of
2013, the company’s stock price was $22.50.
What was DAD’s P/E ratio at the end of 2013?
a. 10.1
b. 14.0
c. 20.2
38. d. 15.0
e. cannot be determined given
information provided How many of the following transactions have no impact on a
company’s total assets?
Issued common stock
Purchase of treasury stock
Declare cash dividend
a. one
b. two
c. three 39. d.
e. Payment of a cash dividend
Sale of treasury stock
Payment of employee salaries four
five “Issued 800 shares of $20 par value common stock for $20 per
share.” The journal entry for this transaction included a
a.
b.
c.
d.
e. debit to Treasury Stock.
credit to Retained Earnings.
credit to Additional Paid-in Capital.
debit to Common Stock.
None of the above 17 40. Which of the following is reported in the statement of cash
flows if the direct method is being used?
a. Depreciation expense
b. Loss on sale of an asset
c. Gain on sale of an asset 41. 42. How many of the following items would be reported in the
operating activities section of a statement of cash flows that
was prepared using the indirect method?
Purchase of a patent
Depreciation expense
Decrease in accounts receivable Increase in inventory
Exchange of long-term assets
Payment of dividends a. Two
b. Three e. c.
d. Four
Five Six Isaac Inc., reported net income of $122,000 for 2013. That net
income figure included a loss on the sale of land of $20,000.
A comparison of Isaac’s 2013 and 2012 balance sheets revealed
that the company’s receivables decreased by $30,000 in 2013,
while its inventory increased $20,000, and its accounts payable
decreased by $16,000. What was Isaac’s net cash flows from
operating activities during 2013?
a. $136,000
b. $108,000 43. d. Cash paid to suppliers
e. Amortization expense c.
d. $128,000
$96,000 e. some other amount Pitt Bell, Inc. reported net income of $161,000 for 2013. That
net income figure included a gain on the sale of a building of
$40,000. A comparison of the company’s 2013 and 2012 balance
sheets revealed that the company’s receivables decreased by
$34,000 in 2013, while its inventory decreased $18,000, and its
accounts payable increased by $18,000. During 2013, the 18 company recorded $20,000 of depreciation expense. What was
Pitt Bell’s net cash flows from operating activities in 2013?
a. $175,000
b. $171,000 44. c. $251,000
d. $211,000 Treasury stock
a. has a normal debit balance.
b. can be considered a current asset.
c. decreases stockholders’ equity. 45. 47. d. is recorded as an
investment.
e. both a and c Which of the following is a positive sign that a company can
quickly turn its receivables into cash?
a.
b.
c.
d. 46. e. Some other amount A low receivables turnover ratio.
A high receivables turnover ratio.
A low average collection period.
Both a high receivables turnover ratio and a low average
collection period. Assume that Porter Company has a current ratio of 1.13. If
Porter purchases inventory on account, the company’s current
ratio will go down.
a. True
b. False
c. Cannot be determined given information provided
When using “vertical analysis,” every item in the balance sheet
is expressed as a percentage of total stockholders’ equity. 19 a. True b. False FACTS FOR QUESTIONS 48-49: Forsyth Amil & McCormick (FAM), Inc.
reported total sales of $20 million in 2013 and $18 million in 2012
(all sales on credit). In 2013, the company had total cost of goods
sold of $12.4 million compared to $13.4 million the previous year.
The company’s net income for 2013 was $4.2 million compared to $3.0
million the previous year. The following table presents balance
sheet data for FAM for both years. All amounts are expressed in
thousands of dollars—so, for example, the company had $500,000 of
cash in 2012.
2013
Current assets:
Cash
Accounts receivable
Inventory
Long-term assets
Total Assets
Current liabilities
Long-term liabilities
Common stock
Retained earnings
Total liabilities and equity
48. $ 900
2,100
4,700
18,800
$26,500 $ 500
3,800
4,300
15,200
$23,800 $ 7,200
5,800
3,000
10,500
$26,500 $ 6,100
7,000
3,000
7,700
$23,800 What was FAM’s gross profit ratio for 2013? a. 38%
b. 40%
49. 2012 c. 29.5%
d. 33% e. Cannot be determined given
information provided What was FAM’s receivables turnover ratio in 2013?
a. 53.7 days
b. 6.8 times c. 38.4 days
d. 9.5 times e. 55.6 days 20 50. Consider the following 2012 and 2013 inventory data for Bartok
Motors:
2013
2012
Beginning inventory
$ 80,000
$ 50,000
Ending inventory
120,000
80,000
Purchases
235,000
315,000
Purchases returns
25,000
15,000 What was Bartok’s average days in inventory for 2013?
a.
b. 214.7 days
237.2 days c.
d. 187.2 days
171.7 days e. 155.4 days 21 Name:______________________
Seat
#:______________________ ACCOUNTING 2113
SPRING 2014 FINAL EXAM 22 NOTE: Choose the BEST answer for each item

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 05, 2019

PRICE: $15

Solution~000200199605.zip (25.37 KB)

Buy this answer for only: $18

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free solution (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 05, 2019

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now