At December 31, 2012 Mower Company’s inventory records indicated a balance of $652,000. Upon further investigation

QUESTION

Question 11. At December 31, 2012 Mower Company’s inventory records indicated a balance of $652,000. Upon further investigation it was determined that this amount included the following:(1)$112,000 in inventory purchases made by Mower shipped from seller 12/27/12 terms FOB destination, but not due to be received until January 2nd. (2)$74,000 in goods sold by Mower with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th. (3) $6000 of goods received on consignment from Dolly Company. What is Mower’s correct inventory balance at December 31,2012?A.$540,000B.$646,000C.$460,000D.$534,0002 pointsQuestion 22.Alpha First Company just began business and made the following four inventory purchases in June:June1150 units$780June10200 units1,170June15200 units1,260June28150 units9903. A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 isA.$1,300B.$1,365C.$1,650D.$1,6202 pointsQuestion 34.Quark Inc. just began business and made the following four inventory purchases in June:June1150 units$825June10200 units1,120June15200 units1,140June28150 units8855. A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June isA.$1385B.$1425C.$1455D.$14752 pointsQuestion 46. Noise Makers Inc. has the following inventory data:July 1Beginning inventory20 units at $19$380July7Purchases70 units at $20$1,400July 22Purchases10 units at $22$2207. A physical count of merchandise inventory on July 30 reveals that there are 40 units on hand. Using the average cost method, the value of ending inventory is:A.$780B.$800C.$813D.$8202 pointsQuestion 58. Dole Industries had the following inventory transactions occur during 2012:Feb. 1, 2012Purchase54$90 = $4,860Mar. 14, 2012Purchase93$94 = $8,742May 1, 2012Purchase66$98 = $6,4689. The company sold 153 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the companys gross profit using LIFO?A.$14,646B.$14,190C.$5,088D.$4,6322 pointsQuestion 610.Nelson Corporation sells three different products. The following information is available on December 31: Product X 200 units at total cost $800 market $700; Product Y 400 units total cost $800 market $600 and Product Z 1,000 units total cost $3,000 market $4,000.11. When applying the lower of cost or market rule to each item, what will Nelson’s total ending inventory balance be?A.$4,600B.$4,300C.$5,300D.$4,4002 pointsQuestion 712.The following information was available for Bower Company at December 31, 2012: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Bower’s days in inventory in 2012 was:A.38.8 daysB.44.0 daysC.50.0 daysD.60.8 days2 pointsQuestion 813.Red Company had the following records: Ending inventories: 2012-$34,580, 2011-$27,650, 2010-$30,490. Cost of goods sold: 2012-$182,000, 2011-$178,000, 2010-$174,200. What is Red’s inventory turnover ratio for 2011? (rounded)A.6.1 timesB.5.7 timesC..2 timesD.6.4 times2 pointsQuestion 914. Butler Company reported ending inventory at December31, 2012 of $1,200,000 under LIFO. It also reported a LIFO reserve of $210,000 at January 1, 2012 and $300,000 at December 31, 2012. Cost of goods sold for 2012 was $4,100,000. If Butler Company had used FIFO during 2012, its cost of goods sold for 2012 would have been:A.$4,400,000B.$4,190,000C.$4,010,000D.$3,800,0002 pointsQuestion 1015. Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson Company:A.is minimizing funds tied up in inventoryB.is increasing the amount of inventory on hand relative to salesC.may be losing sales due to inventory shortagesD.has a cost of goods sold that is increasing relative to its average inventory2 pointsQuestion 1116. On January 1, 2011, the Accounts Receivable balance was $18,000 and the balance in the Allowance for Doubtful Accounts was $1,400. On January 15, 2011 a $400 uncollectible account was written off. The net realizable value of accounts receivable immediately after the write-off is:A.$17,600B.$16,200C.$16,600D.$17,0002 pointsQuestion 1217. The year-end adjusting entry to recognized estimated uncollectible accounts willA.increase assets and decrease equityB.decrease assets and decrease equityC.increase liabilities an increase equityD.decrease liabilities and increase equity2 pointsQuestion 1318. Valdez Company uses the percent of receivables method to estimate uncollectible accounts expense. Valdez began 2012 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $38,250 and $2,900, respectively. During the year, the company wrote of $2,320 in uncollectible accounts. In preparation for the company’s 2012 estimate, Valdez prepared the following aging schedule: Not yet due $26,000–1% uncollectible, $11,250–5% uncollectible, $2,480–10% uncollectible, $1,100–25% uncollectible, $950–50% uncollectible. What will Valdez record as Bad Debt Expense for 2012?A.$1,243B.$1,823C.$2,320D.$3,5632 pointsQuestion 1419. The practice of reporting the net realizable value of receivable in the financial statements is commonly called:A.the cash flow method of accounting for uncollectible accountsB.the direct write-off method of accounting for uncollectible accountsC.the allowance method of accounting for uncollectible accountsD.Both a and b are correct2 pointsQuestion 1520. Which one of the following is NOT an accurate description of the Allowance for Doubtful Accounts?A.The account is an income statement accountB.The account is a contra accountC.The amount of the Allowance for Doubtful Accounts decreases the net realizable value of a company’s receivablesD.2 pointsQuestion 1621.Which of the following is NOT a significant difference between the allowance method and the direct write-off method of accounting for uncollectible accounts?A.One method requires the estimation of uncollectible accounts and the other does notB.One method conforms to GAAP and the other does notC.On method reports net realizable value on the balance sheet and the other does notD.One method requires writing off of uncollectible accounts and the other does not2 pointsQuestion 1722. The party that issues a promissory note is known as theA.lenderB.makerC.borrowerD.both B and C2 pointsQuestion 1823. What does the accounts receivable turnover ratio measure?A.Average balance of accounts receivableB.How quickly the accounts receivable balance increasesC.How quickly accounts receivable turn into cashD.How quickly inventory turns into accounts receivable2 pointsQuestion 1924. Ralston Company reports the following information for the2011 fiscal year: Sales on account $355,000, Accounts Receivable $90,000, Allowance for Doubtful Accounts $3,500. Determine the average number of days it takes Ralston to collect its accounts receivable.A.80B.85C.89D.982 pointsQuestion 2025. A 90-day note dated April 30, 2012 would mature on:A.July 30, 2012B.July 29, 2012C.July 31,2012D.August 1, 20122 pointsQuestion 2126. Which of the following assets would NOT be depreciated?A.a factory buildingB.parking lot constructed for employeesC.land that was purchased for a future building siteD.equipment used to produce products2 pointsQuestion 2227. Lincoln Company recorded $40,000 of depreciation as of December 31,2013 on assets acquired that were purchase on January 1, 2013. The assets cost $200,000 and had an estimated useful life of 10 years. The method Lincoln used for depreciating the assets was:A.the straight-line methodB.an improper methodC.a method permitted only for tax purposesD.an accelerated method2 pointsQuestion 2328. How is the depreciation process consistent with the matching principle?A.the accumulated depreciation account is matched with the plant asset account on the balance sheetB.the cost of consuming plant assets is match with the periods that benefit from using the assetsC.the book value of the asst is matched with the current market value of the assetD.the depreciation method used is matched with the expected productivity of the asset2 pointsQuestion 2429. Quick Freight owned a truck which cost $30,000 when it was purchased on January 1, 2012. It had accumulate depreciation of $18,000 at December 31,2013. The company originally estimated the truck would have a residual value after using it for four years of $3,000. It sold the truck for $22,500 cash on January 1, 2014. The amount of gain (loss) on the sale of the truck wasA.$4,500 gainB.$19,500 gainC.$1,500 lossD.$10,500 gain2 pointsQuestion 2530. Equipment with a cost of $256,000 has an estimated salvage value of $24,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?A.$64,000B.$70,000C.$66,000D.$58,0002 pointsQuestion 2631. A plant asset was purchased on January 1 for $60,000 with an estimated salvage value of $12,000 at the end of its useful life. The current year’s Depreciation Expense is $4,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $20,000. The remaining useful life of the plant asset isA.15 yearsB.12 yearsC.5 yearsD.7 years2 pointsQuestion 2732. Stine Company purchased machinery with a list price of $32,000. They were given a 10% discount by the manufacturer. They paid $200 for shipping and sales tax of $1,500. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $10,000. If Stine uses straight-line depreciation, annual depreciation will beA.$2,050B.$2,036C.$3,050D.$1,8802 pointsQuestion 2833. Jack’s Copy Shop bought equipment for $90,000 on January 1, 2011. Jack estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2012, Jack decides that the business will use the equipment for a total of 5 years. What is revised depreciation expense for 2012?A.$30,000B.$12,000C.$15,000D.$22,5002 pointsQuestion 2934. On May 1, 2012, Irwin Company purchased a copyright to Quick Computer Tutorials for $75,000. It is estimated that the copyright will have a useful life of 5 years. The amount of Amortization Expense recognized for the year 2012 would be.A.$15,000B.$10,000C.$7,500D.$8,0002 pointsQuestion 3035. On October 1, 2012, Hess Company places a new asset into service. The cost of the asset is $60,000 with an estimated 5-year useful life and $15,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2012, balance sheet assuming that Hess Company used the double-declining balance method of depreciation?A.$39,000B.$45,000C.$54,000D.$57,0002 pointsQuestion 3136. On January 1, 2012, Beta Company issued 5-year bonds having a face value of $100,000. The bonds pay 7% interest annually and were sold for $94,706 to yield 8.34% interest. Beta’s 2012 income statement should report what amount for interest expense on these bonds?A.$6,630B.$7,000C.$7,898D.$8,3402 pointsQuestion 3237. Under what conditions must a contingency be reported as a liability?A.it probably will result in a loss and the amount of the loss can be reasonably estimated.B.it possibly will result in a loss and the amount of the loss can be reasonable estimated.C.it is remotely possible it will result in a loss and the amount of the loss can be reasonably estimated.D.it probably will result in a loss, whether or not the amount of the loss can e reasonably estimate.2 pointsQuestion 3338. If a company enters into a capital lease agreement, it will recordA.an asset onlyB.a liability onlyC.an asset and a liabilityD.an expense only2 pointsQuestion 3439. Renoir Enterprises called 400 of its $1,000 face value bonds that had been outstanding for 7 years of the scheduled 30-year life. The bonds had a carrying value, when called, of $400,000 and had a market value of $417,500. The company paid $1,020 for each called bond. What amount of gain or loss should the company report from this transaction?A.$18,500 lossB.$8,000 lossC.$17,500 lossD.$9,500 gain2 pointsQuestion 3540. At the date of a bond issue, the effective rate of interest is significantly above the stated rate of interest. If the bond has a $1,000 face value, the proceeds from the issue would bA.more than $1,000B.less than $1,000C.$1,000D.$02 pointsQuestion 3641. A retail store credited the Sales account for the sales price and the amount of the sales tax on sales. If the sales tax rate is 5% and the balance in the Sales account amounted to $189,000, what is the amount of the sales taxes owed to the taxing agency?A.$180,000B.$189,000C.$9,450D.$9,0002 pointsQuestion 3742. On January 1, 2012, Ermler Company, a calendar-year company, issued $800,000 of notes payable, of which $200,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2012 isA.Current Liability, $800,000B.Long-term Debt, $800,000C.Current Liabilities, $400,000; Long-term Debt $400,000D.Current Liabilities, $200,000; Long-term Debt $600,0002 pointsQuestion 3843. Two sisters operate a bed and breakfast on the coast of Maine. As customers make reservations they are required to pay cash in advance equal to one-half of the rate for their stay. How should the sisters account for the cash received as reservations are made?A.Cash is debited and Unearned Revenue is creditedB.Cash is debited and Earned Revenue is creditedC.Unearned Revenue is debited an Earned Revenue is creditedD.Cash is debited and Sales is credited2 pointsQuestion 3944. In a recent year Hart Corporation had net income of $140,000, interest expense of $30,000, and tax expense of $40,000. What was Hart Corporation times interest earned ratio for the year?A.7.00B.4.66C.5.67D.6.002 pointsQuestion 4045. Downs Company issued $800,000 of 8%, 5-year bonds at 106, which pays interest annually. Assuming straight-line amortization, what is the total interest cost of the bonds?A.$368,000B.$272,000C.$224,000D.$320,0002 pointsQuestion 4146. Winters Company has announced that it twill distribute a 15% common stock dividend on its $10 par value common stock that is currently selling for $75 per share. Upon receiving the new shares, a common stockholder will have increased his/her ownership value byA.zeroB.15% of the par value of shares owned before the stock dividendC.15% of the market value of the shares owned before the stock dividendD.15% of the difference between par value and market value of the shares owned before the stock dividend2 pointsQuestion 4247. Net income during 2012 totaled $30,000 and the board of directors wishes to distribute a total of $15,000 in cash dividends. The common stockholders will receive what amount per share?A.$15B.$11C.$3D.$02 pointsQuestion 4348. Dividends on common stock areA.recorded as expense when paidB.recorded as expense when declaredC.recorded as expense at year endD.recorded as a reduction of retained earnings2 pointsQuestion 4449. The issuance of a common stock dividendA.reduces a company’s retained earnings balanceB.brings new owners into a corporationC.decreases the number of shares of outstanding stockD.increases a company retained earnings balance2 pointsQuestion 4550. Tomlinson Packing Corporation began business in 2010 by issuing 20,000 shares of $5 par common stock for $8 per share and 5,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2012 balance sheet, Tomlinson Packing would reportA.Common Stock of $200,000B.Common Stock of $100,000C.Common Stock of $160,000D.Paid-in Capital of $150,0002 pointsQuestion 4651. Leary Manufacturing Corporation purchased 4,000 shares of its own previously issued $10 par common stock for $92,000. As a result of this eventA.Leary’s Common Stock account decreased $40,000B.Leary’s total stockholders’ equity decreased $92,000C.Leary’s Paid-in Capital in Excess of Par Value account decreased $52,000D.All of the above2 pointsQuestion 4752. The number of shares of issued stock equalsA.unissued shares minus authorized sharesB.outstanding shares plus treasury sharesC.authorized shares minus treasury sharesD.outstanding shares plus authorized shares2 pointsQuestion 4853. A corporation records a dividend-related liabilityA.On the record dateB.on the payment dateC.when dividends are in arrearsD.on the declaration date2 pointsQuestion 4954. Which of the following statements is NOT true about a 2-for-1 split?A.Par value per share is reduced to half of what it was before the split.B.Total contributed capital increasesC.The market price probably will decreaseD.A stockholder with ten shares before the split owns twenty shares after the split2 pointsQuestion 5055. Ferman Corporation had net income of $200,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2012. Ferman Corporation’s common stockholders’ equity at the beginning and end of 2012 was $870,000 and $1,130,000, respectively. Ferman Corporation’s payout ratio for 2012 wasA.$5 per shareB.35%C.25%D.10%

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