1) given below are the future value factors for 1 at 8% for one to five periods. each of
the items 65 to 68 is based on 8% interest compounded annually.
what amount will be in a bank account three years from now if $6,000 is invested each
year for four years with the first investment to be made today?
a.($6,000 1.260) + ($6,000 1.166) + ($6,000 1.080) + $6,000
b.$6,000 1.360 4
c.($6,000 1.080) + ($6,000 1.166) + ($6,000 1.260) + ($6,000 1.360)
d.$6,000 1.080 4
2) on january 1, 2013, shaw co. sold land that cost $420,000 for $560,000, receiving a
note bearing interest at 10%. the note will be paid in three annual installments of
$225,190 starting on december 31, 2013. because collection of the note is very
uncertain, shaw will use the cost-recovery method. how much revenue from this sale
should shaw recognize in 2013?
a.$0
b.$42,000
c.$56,000
d.$140,000
3) an entry is not made on the
a.date of declaration
b.date of record
c.date of payment
d.an entry is made on all of these dates
4) drake corporation had the following amounts, all at retail:
what is drakes ending inventory at retail?
a.$74,400
b.$76,000
c.$77,600
d.$78,400
5) which type of account is always debited during the closing process?
a.dividends
b.expense
c.revenue
d.retained earnings
6) al darby wants to withdraw $20,000 (including principal) from an investment fund at
the end of each year for five years. how should he compute his required initial
investment at the beginning of the first year if the fund earns 10% compounded
annually?
a.$20,000 times the future value of a 5-year, 10% ordinary annuity of 1
b.$20,000 divided by the future value of a 5-year, 10% ordinary annuity of 1
c.$20,000 times the present value of a 5-year, 10% ordinary annuity of 1
d.$20,000 divided by the present value of a 5-year, 10% ordinary annuity of 1
7) it is an objective of the statement of cash flows to
a.disclose changes during the period in all asset and all equity accounts
b.disclose the change in working capital during the period
c.provide information about the operating, investing, and financing activities of an
entity during a period
d.none of these
8) calcount pays a weekly payroll of $170,000 that includes federal taxes withheld of
$25,400, fica taxes withheld of $15,780, and 401(k) withholdings of $18,000. what is
the effect of assets and liabilities from this transaction?
a.assets decrease $170,000 and liabilities do not change
b.assets decrease $128,820 and liabilities increase $41,180
c.assets decrease $128,820 and liabilities decrease $41,180
d.assets decrease $110,820 and liabilities increase $59,180
9) shangra-la company incurred $2,000,000 ($500,000 in 2011 and $1,500,000 in 2012)
to develop a computer software product. $600,000 of this amount was expended before
technological feasibility was established in early 2012. the product will earn future
revenues of $4,000,000 over its 5-year life, as follows: 2012 $1,000,000; 2013
$1,000,000; 2014 $800,000; 2015 $800,000; and 2016 $400,000. what portion of the
$2,000,000 computer software costs should be expensed in 2012?
a.$350,000
b.$400,000
c.$450,000
d.$1,500,000
10) opera corp. uses dollar-value lifo method of computing its inventory cost. data for
the past four years is as follows:
what is the 2012 inventory balance using dollar-value lifo?
a.$252,000
b.$257,000
c.$245,500
d.$251,500
11) at december 31, 2012, hancock company had 500,000 shares of common stock
issued and outstanding, 400,000 of which had been issued and outstanding throughout
the year and 100,000 of which were issued on october 1, 2012. net income for the year
ended december 31, 2012, was $1,530,000. what should be hancock’s 2012 earnings per
common share, rounded to the nearest penny?
a.$3.03
b.$3.82
c.$3.60
d.$3.40
12) ag inc. made a $15,000 sale on account with the following terms: 1/15, n/30. if the
company uses the net method to record sales made on credit, how much should be
recorded as revenue?
a.$14,700
b.$14,850
c.$15,000
d.$15,150
13) all of the following are problems associated with the valuation of accounts
receivable except for
a.uncollectible accounts
b.returns
c.cash discounts under the net method
d.allowances granted
14) on october 1, 2012 bartley corporation issued 5%, 10-year bonds with a face value
of $3,000,000 at 104. interest is paid on october 1 and april 1, with any premiums or
discounts amortized on a straight-line basis.
the entry to record the issuance of the bonds would include a
a.credit of $75,000 to interest payable
b.credit of $120,000 to premium on bonds payable
c.credit of $2,880,000 to bonds payable
d.debit of $120,000 to discount on bonds payable
15) why might inventory be reported at sales prices (net realizable value or market
price) rather than cost?
a.when there is a controlled market with a quoted price applicable to all quantities and
when there are no significant costs of disposal
b.when there are no significant costs of disposal
c.when a non-cancellable contract exists to sell the inventory
d.when there is a controlled market with a quoted price applicable to all quantities
16) the stockholders’ equity section of gunkel corporation as of december 31, 2012, was
as follows:
on march 1, 2013, the board of directors declared a 15% stock dividend, and
accordingly 1,500 additional shares were issued. on march 1, 2011, the fair value of the
stock was $6 per share. for the two months ended february 28, 2013, gunkel sustained a
net loss of $10,000.
what amount should gunkel report as retained earnings as of march 1, 2013?
a.$76,000
b.$82,000
c.$86,000
d.$92,000
17) tresh, inc. had the following bank reconciliation at march 31, 2012:
all reconciling items at march 31, 2012 cleared the bank in april. outstanding checks at
april 30, 2012 totaled $6,000. there were no deposits in transit at april 30, 2012. what is
the cash balance per books at april 30, 2012?
a.$25,200
b.$28,900
c.$31,200
d.$35,500
18) during 2013, orton company earned net income of $434,000 which included
deprecia-tion expense of $78,000. in addition, the company experienced the following
changes in the account balances listed below:
based upon this information what amount will be shown for net cash provided by
operating activities for 2013?
a.$542,000
b.$515,000
c. $335,000
d.$317,000