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ACC 421 Final Exam
1. Transactions for Mehta Company for the month of May are presented below. Prepare journal entries for each of these transactions.
2. On July 1, 2012, Crowe Co. pays $19,628 to Zubin Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Crowe Co. journalize the entry on July 1 and the adjusting entry on December 31.
3. Dresser Company's weekly payroll, paid on Fridays, totals $6,600. Employees work a 5-day week. Prepare Dresser's adjusting entry on Wednesday, December 31, and the journal entry to record the $6,600 cash payment on Friday, January 2.
4. Side Kicks has year-end account balances of Sales $890,660; Interest Revenue $16,870; Cost of Goods Sold $557,320; Operating Expenses $207,440; Income Tax Expense $36,370; and Dividends $20,744. Prepare the year-end closing entries.
5. Financial information exhibits the characteristic of consistency when
6. What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?
7. Starr Co. had sales revenue of $632,600 in 2012. Other items recorded during the year were: Prepare a single-step income statement for Allen for 2012. Allen has 100,000 shares of stock outstanding.
8. Portman Corporation has retained earnings of $752,650 at January 1, 2012. Net income during 2012 was $1,751,960, and cash dividends declared and paid during 2012 totaled $78,100. Prepare a retained earnings statement for the year ended December 31, 2012. Assume an error was discovered: land costing $87,490 (net of tax) was charged to repairs expense in 2009.
9. On January 1, 2012, Richards Inc. had cash and common stock of $63,790. At that date the company had no other asset, liability or equity balances. On January 2, 2012, it purchased for cash $24,120 of equity securities that it classified as available-for-sale. It received cash dividends of $4,560 net of tax during the year on these securities.
10. Armstrong Corporation reported the following for 2012: net sales $1,227,100; cost of goods sold $762,000; selling and administrative expenses $324,800; and an unrealized holding gain on available-for-sale securities $23,800.
11. Guillen, Inc. began work on a $7,160,800 contract in 2012 to construct an office building. Guillen uses the completed-contract method. At December 31, 2012, the balances in certain accounts were construction in process $1,751,500; accounts receivable $245,100;
12. Lazaro, Inc. sells goods on the installment basis and uses the installment-sales method. Due to a customer default, Lazaro repossessed merchandise that was originally sold for $980, resulting in a gross profit rate of 40%.
13. Harding Corporation has the following accounts included in its December 31, 2012, trial balance:
14. Patrick Corporation's adjusted trial balance contained the following asset accounts at December 31, 2012:
15. Hawthorn Corporation's adjusted trial balance contained the following accounts at December 31, 2012: Retained Earnings $126,560; Common Stock $707,140; Bonds Payable $101,750; Additional Paid-in Capital $203,770; Goodwill $58,010
16. Keyser Beverage Company reported the following items in the most recent year.
17. Linden Corporation is preparing its December 31, 2012, financial statements. Two events that occurred between December 31, 2012, and March 10, 2013, when the statements were issued, are described below.
18. Roder Corporation has seven industry segments with total revenues as follows. Based only on the total revenues test, which industry segments are reportable? Enter 1 if the segment is reportable. Enter 0 if the segment is not reportable.
19. Operating profits and losses for the seven industry segments of Roder Corporation are: Based only on the operating profit (loss) test, which industry segments are reportable? Enter 1 if the segment is reportable. Enter 0 if the segment is not reportable.
21. Heartland Company's budgeted sales and budgeted cost of goods sold for the coming year are $143,870,000 and $31,464,000 respectively. Short-term interest rates are expected to average 10%.
23. Ames Company reported 2012 net income of $153,850. During 2012, accounts receivable increased by $13,740 and accounts payable increased by $9,970. Depreciation expense was $40,990. Prepare the cash flows from operating activities section of the statement of cash flows.
24. Martinez Corporation engaged in the following cash transactions during 2012. Compute the net cash provided (used) by investing activities.
25: Martinez Corporation engaged in the following cash transactions during 2012. Determine Martinez's free cash flow, assuming that it reported net cash provided by operating activities of $401,270.
26 (Preparation of a Statement of Cash Flows)
27. Chris Spear invested $11,798 today in a fund that earns 12% compounded annually. To what amount will the investment grow in 3 years? To what amount would the investment grow in 3 years if the fund earns 12% annual interest compounded semiannually?
28. Amy Monroe wants to create a fund today that will enable her to withdraw $25,780 per year for 8 years, with the first withdrawal to take place 5 years from today. If the fund earns 10% interest, how much must Amy invest today?
29. Zach Taylor is settling a $25,000 loan due today by making 6 equal annual payments of $5,909.41. What payments must Zach Taylor make to settle the loan at the interest rate of 11%, but with the 6 payments beginning on the day the loan is signed?
30. (Simple and Compound Interest Computations) Lyle O 'Keefe invests $25,900 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Lyle withdrew the accumulated amount of money.