1) a plant asset cost $96,000 and is estimated to have a $12,000 salvage value at the end
of its 8-year useful life. the annual depreciation expense recorded for the third year
using the double-declining-balance method would be
a.$8,040
b.$13,500
c.$11,812
d.$9,190
2) which of the following would not be true of a privately held corporation?
a.it is sometimes called a closely held corporation
b.its shares are regularly traded on the new york stock exchange
c.it does not offer its shares for sale to the general public
d.it is usually smaller than a publicly held company
3) the statement “bond prices vary inversely with changes in the market rate of interest”
means that if the
a.market rate of interest increases, the contractual interest rate will decrease
b.contractual interest rate increases, then bond prices will go down
c.market rate of interest decreases, then bond prices will go up
d.contractual interest rate increases, the market rate of interest will decrease
4) snug-as-a-bug blankets has the following inventory data:
assuming that a perpetual inventory system is used, what is the cost of goods sold on a
lifo basis for july?
a.$8,703
b.$8,658
c.$8,694
d.$8,874
5) failure to prepare an adjusting entry at the end of the period to record an accrued
expense would cause:
a.net income to be understated
b.an overstatement of assets and an overstatement of liabilities
c.an understatement of expenses and an understatement of liabilities
d.an overstatement of expenses and an overstatement of liabilities
6) which of the following is an asset?
a.service revenue
b.notes payable
c.supplies expense
d.prepaid rent
7) joan crawford borrowed $130,000 on june 1, 2011. this amount plus accrued interest
at 8% compounded annually is to be repaid on june 1, 2024. joan has obtained the
following values related to the time value of money to help her with her financing
process and compounded interest decisions.
to the closest dollar, how much will joan have to repay on june 1, 2024?
a.$265,200
b.$621,414
c.$232,750
d.$353,550
8) all of the following are advantages for choosing a proprietorship for a business
except:
a.a proprietorship is a simple form of business to set up
b.a proprietorship gives the owner control of the business
c.proprietorship receive more favorable tax treatment
d.transfer of ownership is easily achieved through stock sales
9) a company has the following assets:
the total amount reported under property, plant, and equipment would be
a.$54,400,000
b.$42,000,000
c.$52,000,000
d.$44,400,000
10) karcan, inc. purchased supplies costing 2,500 on january 1, 2011 and recorded the
transaction by increasing assets. at the end of the year 1,300 of the supplies are still on
hand. if karcan, inc. does not make the appropriate adjusting entry, what is the impact
on its statement of financial position at december 31, 2011?
a.assets overstated by 1,200
b.equity understated by 1,200
c.equity overstated by 1,300
d.assets overstated by 1,300
11) all of the following activities occur at the time of a cash disbursement from petty
cash except
a.the petty cash custodian signs the voucher
b.available supporting documents are attached to the voucher
c.a journal entry is made for each cash distribution
d.the individual receiving payment signs the voucher
12) jensen company purchased a new machine on september 1, 2012, at a cost of
$128,000. the company estimated that the machine has a salvage value of $8,000. the
machine is expected to be used for 80,000 working hours during its 8-year life.
instructions
compute depreciation using the following methods in the year indicated.
(a)straight-line for 2012 and 2013, assuming a december 31 year-end.
(b)declining-balance using double the straight-line rate for 2012 and 2013
(c)units-of-activity for 2012, assuming machine usage was 2,900 hours. (round
depreciation per unit to the nearest cent.)
13) the purchase of a company that is in the same industry but involved in a different
activity is called a
a.controlling acquisition
b.horizontal acquisition
c.parent acquisition
d.vertical acquisition
14) interline trucking purchased a tractor trailer for $98,000. interline uses the
units-of-activity method for depreciating its trucks and expects to drive the truck
1,000,000 miles over its 12-year useful life. salvage value is estimated to be $14,000. if
the truck is driven 80,000 miles in its first year, how much depreciation expense should
interline record?
a.$6,222
b.$7,840
c.$6,720
d.$7,259
15) henson company began the year with retained earnings of $350,000. during the
year, the company recorded revenues of $500,000, expenses of $380,000, and paid
dividends of $40,000. what was hensons retained earnings at the end of the year?
a.$510,000
b.$430,000
c.$810,000
d.$470,000