1
ACC102-S1, 2015 Fall Semester
Final Exam, Chapters 15 – 17
Student:
Steven Henriques
Date:
12/19/2015
Total Points Possible: 150 points
Grade: =
Circle the correct answer – 2 points each (Total = 30 points)
1.
A company received dividends of $0.35 per share on 300 shares of stock it
holds as an investment. The journal entry to record this transaction would
be to debit Cash for $105 and credit Dividend Revenue for $105.
True
False
2.
Hamasaki Company owns 30% of CDW Corp. stock. Hamasaki received
$6,500 in cash dividends from its investment in CDW. The entry to record
receipt of these dividends includes a debit to Cash for $6,500 and a credit
to Long-Term Investments for $6,500.
True
False
3.
On May 1, Jorge Co. purchases 2,000 shares of Radiotech stock for
$25,000. This investment is considered to be an available-for-sale
investment. On July 31 (Jorge’s year-end), the stock had a market value of
$28,000. Jorge should record a credit to Unrealized Gain—Equity for
$3,000.
True
False
4.
On May 15, Tumbleweed, Inc. purchased 10,000 shares of Dansell Corp. for
$80,000. The securities are considered available-for-sale securities. On
September 30, the stock had a market value of $85,000. The $5,000
difference must be reported on Tumbleweed’s income statement as a
$5,000 gain.
True
False
5.
Kim Manufacturing purchased on credit £20,000 worth of parts from a
British company when the exchange rate was $1.66 per British pound. At
the year-end balance sheet date the exchange rate increased to $1.69. Kim
must record a gain of $600.
True
False
2
6.
Equipment costing $100,000 with accumulated depreciation of
$40,000 is sold at a loss of $10,000. This implies that $40,000 cash
was received from the sale.
True
False
7.
Conversion of preferred stock to common stock is disclosed in the
financing section of the statement of cash flows.
True
False
8.
A purchase of land in exchange for a long-term note payable is
reported in the investing section of the statement of cash flows.
True
False
9.
A company purchased equipment for $150,000 by paying $50,000
and signing a $100,000 note payable. The entire transaction is
disclosed to users in the financing section of the statement of cash
flows.
True
False
10.
A purchase of land in exchange for shares of stock is disclosed at the
bottom of the statement of cash flows or in a note to the statement.
True
False
11.
A company reports basic earnings per share of $3.50, cash dividends
per share of $0.75, and a market price per share of $64.75. The
company’s dividend yield equals 21.4%.
True
False
12.
Evaluation of company performance does not include analysis of (1)
past and current performance, (2) current financial position, and (3)
future performance and risk.
True
False
13.
A company’s board of directors analyzes financial statements to
assess future company prospects for making operating decisions.
True
False
14.
Market prospects are the ability to provide financial rewards
sufficient to attract and retain financing.
True
False
15.
The building blocks of financial statement analysis include (1)
liquidity, (2) salability, (3) solvency, and (4) profitability.
True
False
Circle the correct answer – 3 points each (Total = 45 points)
16. A company has an investment in 9% bonds with a par value of $100,000 that pay interest on October 1 and
April 1. The amount of interest accrued on December 31 (the company’s year-end) would be:
A. $750
B. $1,500
C. $2,250
D. $4,500
E. $9,000
17. Roe Corporation owns 2,000 shares of WRJ Corporation stock. WRJ Corporation has 25,000 shares of stock
outstanding. WRJ paid $4 per share in cash dividends to its stockholders. The entry to record the receipt of
these dividends is:
A. Debit Cash, $8,000; credit Long-Term Investments, $8,000
