Machinery was purchased for $170,000. Freight charges amounted to $7,000 and there
was a cost of $20,000 for building a foundation and installing the machinery. It is
estimated that the machinery will have a $30,000 salvage value at the end of its 5-year
useful life. Depreciation expense each year using the straight-line method will be
a.$39,400.
b.$33,400.
c.$28,600.
d.$28,000.
Which of the following represent the three classifications of receivables?
a.Accounts receivable, notes receivable, and other receivables
b.Accounts to be collected, accounts estimated that will not be collected, accounts that
were not collected
c.Receivables that are recognized, receivables that are valued, receivables that are
accelerated
d.Interest-related receivables, receivables from customers, receivables from
employees/officers
Carryable CDs has the following inventory data:
A physical count of merchandise inventory on November 30 reveals that there are 100
units on hand. Cost of goods sold under LIFO is
a.$438
b.$846
c.$421
d.$863
Westwind Corporation shows income tax expense of $180,000. There has been a
$20,000 decrease in federal income taxes payable and a $28,000 increase in state
income taxes payable during the year. Using the direct method of reporting cash flows
from operating activities, what was Westwind ‘s cash payment for income taxes?
a.$180,000.
b.$172,000.
c.$132,000.
d.$228,000.
A $200 petty cash fund has cash of $26 and receipts of $170. The journal entry to
replenish the account would include
a.debit to Cash for $170.
b.credit to Petty Cash for $170.
c.debit to Petty Cash for $174.
d.credit to Cash for $174.
Akers Company is considering purchasing a machine. The machine will produce the
following cash flows:
Akers requires a minimum rate of return of 10%. What is the maximum price Akers
should pay for this machine?
a.$64,462.95
b.$27,272.70
c.$75,000.00
d.$37,500.00
Equipment was purchased for $68,000 on January 1, 2013. Freight charges amounted to
$2,800 and there was a cost of $8,000 for building a foundation and installing the
equipment. It is estimated that the equipment will have a $12,000 salvage value at the
end of its 5-year useful life. What is the amount of accumulated depreciation at
December 31, 2014, if the straight-line method of depreciation is used?
a.$26,720.
b.$13,360.
c.$11,440.
d.$22,880.
Which of the following is not an operating activity?
a.Cash paid for interest on loans
b.Cash received from customers on account
c.Cash paid to suppliers for purchases made during prior months
d.Cash paid for dividends
Which measure(s) is(are) an evaluation of a company€s ability to pay current
liabilities?
1)Current cash debt coverage ratio.
2)Current ratio.
a.1 only.
b.2 only.
c.Both 1 and 2.
d.Neither 1 nor 2.
Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows.
Indicate where, if at all, accounts receivable collected would be classified on the
statement of cash flows.
a.Operating activities section.
b.Investing activities section.
c.Financing activities section.
d.Does not represent a cash flow.
Raxon Company borrowed $40,000 from the bank signing a 6%, 3-month note on
September 1. Principal and interest are payable to the bank on December 1. If the
company prepares monthly financial statements, the adjusting entry that the company
should make for interest on September 30, would be:
a.debit Interest Expense, $2,400; credit Interest Payable, $2,400.
b.debit Interest Expense, $200; credit Interest Payable, $200.
c.debit Note Payable, $2,400; credit Cash, $2,400.
d.debit Cash, $600; credit Interest Payable, $600.
On October 1, 2014, Mann Company places a new asset into service. The cost of the
asset is $80,000 with an estimated 5-year life and $20,000 salvage value at the end of
its useful life. What is the depreciation expense for 2014 if Mann Company uses the
straight-line method of depreciation?
a.$3,000.
b.$16,000.
c.$4,000.
d.$8,000.
Assume that the E-Zip Corporation uses the indirect method to depict cash flows.
Indicate where, if at all, land purchased for cash would be classified on the statement of
cash flows.
a.Operating activities section.
b.Investing activities section.
c.Financing activities section.
d.Does not represent a cash flow.