1) wilkinson corporation factored, with recourse, $400,000 of accounts receivable with
huskie financing. the finance charge is 3%, and 5% was retained to cover sales
discounts, sales returns, and sales allowances. wilkinson estimates the recourse
obligation at $9,600. what amount should wilkinson report as a loss on sale of
receivables?
a.$ -0-
b.$12,000
c.$21,600
d.$41,600
2) in its 2012 income statement, cohen corp. reported depreciation of $1,480,000 and
interest revenue on municipal obligations of $280,000. cohen reported depreciation of
$2,200,000 on its 2012 income tax return. the difference in depreciation is the only
temporary difference, and it will reverse equally over the next three years. cohen’s
enacted income tax rates are 35% for 2012, 30% for 2013, and 25% for 2014 and 2015.
what amount should be included in the deferred income tax liability in hertz’s december
31, 2012 balance sheet?
a.$192,000
b.$248,000
c.$300,000
d.$350,000
3) what is the cost of the ending inventory at december 31, 2014 under dollar-value
lifo?
a.$512,480
b.$509,600
c.$500,000
d.$526,800
4) kennison company has cash in bank of $15,000, restricted cash in a separate account
of $3,000, and a bank overdraft in an account at another bank of $1,000. kennison
should report cash of
a.$14,000
b.$15,000
c.$17,000
d.$18,000
5) colt football co. had a player contract with watts that is recorded in its books at
$4,800,000 on july 1, 2012. day football co. had a player contract with kurtz that is
recorded in its books at $6,000,000 on july 1, 2012. on this date, colt traded watts to
day for kurtz and paid a cash difference of $600,000. the fair value of the kurtz contract
was $7,200,000 on the exchange date. the exchange had no commercial substance. after
the exchange, the kurtz contract should be recorded in colt’s books at
a.$5,400,000
b.$6,000,000
c.$6,600,000
d.$7,200,000
6) everhart company issues $15,000,000, 6%, 5-year bonds dated january 1, 2012 on
january 1, 2012. the bonds pays interest semiannually on june 30 and december 31. the
bonds are issued to yield 5%. what are the proceeds from the bond issue?
a.$15,000,000
b.$15,649,482
c.$15,656,427
d.$15,651,924
7) under ifrs compliance requirements the revaluation surplus is
a. only utilized to record the changes in depreciable items plant and equipment
b. considered as revenue when utilizing the u.s. gaap formatted income statement
c. utilized to record the changes in property, plant, and equipment
d. reported as contributed capital
8) for mortenson company, the following information is available:
cost of goods sold$120,000
dividend revenue5,000
income tax expense12,000
operating expenses46,000
sales revenue200,000
in mortensons single-step income statement, gross profit
a.should not be reported
b.should be reported at $27,000
c.should be reported at $80,000
d.should be reported at $85,000
9) lindsay corporation had net income for 2013 of $2,000,000. additional information is
as follows:
lindsay’s net cash provided by operating activities for 2013 was
a.$3,560,000
b.$3,440,000
c.$3,320,000
d.$1,680,000
10) which of the following events will appear in the cash flows from financing
activities section of the statement of cash flows?
a.cash purchases of equipment
b.cash purchases of bonds issued by another company
c.cash received as repayment for funds loaned
d.cash purchase of treasury stock
11) how do you determine the acid-test ratio?
a.the sum of cash and short-term investments divided by short-term debt
b.current assets divided by current liabilities
c.current assets divided by short-term debt
d.the sum of cash, short-term investments and net receivables divided by current
liabilities
12) the following information is available for october for norton company.
a fire destroyed nortons october 31 inventory, leaving undamaged inventory with a cost
of $12,000. using the gross profit method, the estimated ending inventory destroyed by
fire is
a.$68,000
b.$308,000
c.$320,000
d.$400,000
13) the stockholders’ equity of howell company at july 31, 2012 is presented below:
on august 1, 2012, the board of directors of howell declared a 10% stock dividend on
common stock, to be distributed on september 15th. the market price of howell’s
common stock was $35 on august 1, 2012, and $38 on september 15, 2012. what is the
amount of the debit to retained earnings as a result of the declaration and distribution of
this stock dividend?
a.$320,000
b.$560,000
c.$608,000
d.$400,000
14) assume the weighted-average accumulated expenditures for the construction project
are $870,000. the amount of interest cost to be capitalized during 2012 is
a.$130,500
b.$138,000
c.$150,000
d.$168,000
15) what would you pay for an investment that pays you $20,000 at the end of each
year for the next ten years and then returns a maturity value of $300,000 after ten years?
assume that the relevant interest rate for this type of investment is 8%.
a.$138,958
b.$134,202
c.$144,936
d.$273,158