1) gorman construction co. began operations in 2013. construction activity for 2013 is
shown below. gorman uses the completed-contract method.
which of the following should be shown on the balance sheet at december 31, 2013
related to contract 3?
a.inventory, $200,000
b.inventory, $350,000
c.inventory, $2,100,000
d.inventory, $2,250,000
2) which of the following is true about intraperiod tax allocation?
a.it arises because certain revenue and expense items appear in the income statement
either before or after they are included in the tax return
b.it is required for extraordinary items and cumulative effect of accounting changes but
not for prior period adjustments
c.its purpose is to allocate income tax expense evenly over a number of accounting
periods
d.its purpose is to relate the income tax expense to the items which affect the amount of
tax
3) on january 2, 2012, for past services, rosen corp. granted nenn pine, its president,
20,000 stock appreciation rights that are exercisable immediately and expire on
january 2, 2013. on exercise, nenn is entitled to receive cash for the excess of the
market price of the stock on the exercise date over the market price on the grant date.
nenn did not exercise any of the rights during 2012. the market price of rosen’s stock
was $30 on january 2, 2012, and $45 on december 31, 2012. as a result of the stock
appreciation rights, rosen should recognize compensation expense for 2012 of
a.$0
b.$120,000
c.$300,000
d.$600,000
4) when an item of revenue is collected and recorded in advance, it is normally called
a(n) ___________ revenue.
a.accrued
b.prepaid
c.unearned
d.cash
5) one criticism not normally aimed at a balance sheet prepared using current
accounting and reporting standards is
a.failure to reflect current value information
b.the extensive use of separate classifications
c.an extensive use of estimates
d.failure to include items of financial value that cannot be recorded objectively
6) a plant asset with a five-year estimated useful life and no residual value is sold at the
end of the second year of its useful life. how would using the sum-of-the-years’-digits
method of depreciation instead of the double-declining balance method of depreciation
affect a gain or loss on the sale of the plant asset?
7) beaty inc. purchased dunbar co. and agreed to give stockholders of dunbar co. 10,000
additional shares in 2014 if dunbar co.s net income in 2013 is $500,000; in 2012 dunbar
co.s net income is $520,000. beaty inc. has net income for 2012 of $300,000 and has an
average number of common shares outstanding for 2012 of 100,000 shares. what should
beaty report as diluted earnings per share for 2012?
a.$3.33
b.$3.00
c.$2.73
d.$2.51
8) an inventory pricing procedure in which the oldest costs incurred rarely have an
effect on the ending inventory valuation is
a.fifo
b.lifo
c.base stock
d.weighted-average
9) according to the fasb conceptual framework, the elementsassets, liabilities, and
equitydescribe amounts of resources and claims to resources at/during a
moment in timeperiod of time
a.yesno
b.yesyes
c.noyes
d.nono
10) layne corporation had the following information in its financial statements for the
years ended 2012 and 2013:
what is the payout ratio for layne corporation for the year ended 2013?
a.27.7%
b.18.1%
c.11.8%
d.9.6%
11) which table would you use to determine how much you would need to have
deposited three years ago at 10% compounded annually in order to have $1,000 today?
a.future value of 1 or present value of 1
b.future value of an annuity due of 1
c.future value of an ordinary annuity of 1
d.present value of an ordinary annuity of 1