1) ebert inc. owns the following assets:
what is the composite depreciation rate of ebert’s assets?
a.14.0%
b.10.3%
c.12.9%
d.11.1%
2) on march 1, 2012, newton company purchased land for an office site by paying
$900,000 cash. newton began construction on the office building on march 1. the
following expenditures were incurred for construction:
the office was completed and ready for occupancy on july 1. to help pay for
construction, $1,200,000 was borrowed on march 1, 2012 on a 9%, 3-year note payable.
other than the construction note, the only debt outstanding during 2012 was a $500,000,
12%, 6-year note payable dated january 1, 2012.
the weighted-average accumulated expenditures on the construction project during 2012
were
a.$640,000
b.$4,890,000
c.$520,000
d.$1,160,000
3) vernon corporation offered detachable 5-year warrants to buy one share of common
stock (par value $5) at $20 (at a time when the stock was selling for $32). the price paid
for 4,000, $1,000 bonds with the warrants attached was $410,000. the market price of
the vernon bonds without the warrants was $360,000, and the market price of the
warrants without the bonds was $40,000. what amount should be allocated to the
warrants?
a.$40,000
b.$41,000
c.$48,000
d.$50,000
4) the method most commonly used to report defaults and repossessions is
a.provide no basis for the repossessed asset thereby recognizing a loss
b.record the repossessed merchandise at fair value, recording a gain or loss if
appropriate
c.record the repossessed merchandise at book value, recording no gain or loss
d.none of these
5) alex company prepares its statement of cash flows using the direct method for
operating activities. for the year ended december 31, 2013, alex company reports the
following activity:
what is the amount of cash collections from customers reported by alex company for
the year ended december 31, 2013?
a.$1,940,000
b.$1,810,000
c.$2,550,000
d.$1,330,000
6) a journal entry to record a receipt of rent revenue in advance will include a
a.debit to rent revenue
b.credit to rent revenue
c.credit to cash
d.credit to unearned rent
7) a company issues $15,000,000, 7.8%, 20-year bonds to yield 8% on january 1, 2012.
interest is paid on june 30 and december 31. the proceeds from the bonds are
$14,703,109. using effective-interest amortization, how much interest expense will be
recognized in 2012?
a.$585,000
b.$1,170,000
c.$1,176,374
d.$1,176,249
8) which of the following would be classified as a financing activity on a statement of
cash flows?
a.declaration and distribution of a stock dividend
b.deposit to a bond sinking fund
c.sale of a loan receivable
d.payment of interest to a creditor
9) in the recent year hill corporation had net income of $280,000, interest expense of
$60,000, and tax expense of $80,000. what was hill corporation’s times interest earned
ratio for the year?
a.7.0
b.5.0
c.4.7
d.3.7
10) which of the following is a contra account?
a.premium on bonds payable
b.unearned revenue
c.patents
d.accumulated depreciation
11) counterbalancing errors do not include
a.errors that correct themselves in two years
b.errors that correct themselves in three years
c.an understatement of purchases
d.an overstatement of unearned revenue
12) a concern with ifrs is that its less-stringent rules for establishing restructuring
liabilities could be used as
a.a more appropriate method than that employed under u.s. gaap
b.an appropriate method, but complex and difficult to explain to shareholders
c.a method readily employed to make the understanding of financial information more
comprehensible to shareholders
d.an earinings management tool
13) if bonds are initially sold at a discount and the straight-line method of amortization
is used, interest expense in the earlier years will
a.exceed what it would have been had the effective-interest method of amortization
been used
b.be less than what it would have been had the effective-interest method of amortization
been used
c.be the same as what it would have been had the effective-interest method of
amortiza-tion been used
d.be less than the stated (nominal) rate of interest
14) give:
(a)three distinct examples of investing activities.
(b)three distinct examples of financing activities.
(c)three distinct examples of significant noncash transactions.
(d)two examples of transactions not shown on a statement of cash flows.