SCI Company deposits $15,000 in a fund at the end of each year for 7 years. The fund
pays interest of 3% compounded annually. The balance in the fund at the end of 7 years
is computed by multiplying
a.$15,000 by the future value of 1 factor.
b.$75,000 by 1.07.
c.$75,000 by 1.70.
d.$15,000 by the future value of an annuity factor.
Accounts receivable arising from sales to customers amounted to $80,000 and $70,000
at the beginning and end of the year, respectively. Income reported on the income
statement for the year was $212,000. Exclusive of the effect of other adjustments, the
cash flows from operating activities to be reported on the statement of cash flows is
a.$212,000.
b.$202,000.
c.$222,000.
d.$292,000.
A company purchased factory equipment on April 1, 2014, for $96,000. It is estimated
that the equipment will have a $12,000 salvage value at the end of its 10-year useful
life. Using the straight-line method of depreciation, the amount to be recorded as
depreciation expense at December 31, 2014, is
a.$9,600.
b.$8,400.
c.$6,300.
d.$7,200.
Chang Company retired bonds with a face amount of 60,000,000 at 98 when the
carrying value of the bond was 59,780,000. The entry to record the retirement would
include a
a.gain on bond redemption of 980,000.
b.loss on bond redemption of 980,000.
c.loss on bond redemption of 1,200,000.
d.gain on bond redemption of 1,420,000.
A $100 petty cash fund has cash of $14 and receipts of $84. The journal entry to
replenish the account would include a
a.debit to Cash for $84.
b.credit to Petty Cash for $84.
c.credit to Cash Over and Short for $2.
d.credit to Cash for $86.
Green, Inc. had 200,000 shares of common stock outstanding before a stock split
occurred and 800,000 shares outstanding after the stock split. The stock split was
a.2-for-8.
b.8-for-1.
c.1-for-8.
d.4-for-1.
Bonkers Bananas has the following inventory data:
A physical count of merchandise inventory on July 30 reveals that there are 25 units on
hand. Using the LIFO inventory method, the amount allocated to ending inventory for
July is
a.$550
b.$505
c.$535
d.$500.
Equipment was purchased for $90,000. Freight charges amounted to $4,200 and there
was a cost of $12,000 for building a foundation and installing the equipment. It is
estimated that the equipment will have a $18,000 salvage value at the end of its 5-year
useful life. Depreciation expense each year using the straight-line method will be
a.$21,240.
b.$17,640.
c.$14,760.
d.$14,400.
The following partial amortization schedule is available for Courtney Company who
sold $500,000, five-year, 10% bonds on January 1, 2014 for $520,000 and uses annual
straight-line amortization.
Which of the following amounts should be shown in cell (ii)?
a.$54,000
b.$46,000
c.$52,000
d.$40,000
Which of the following amounts are deducted from employees€ paychecks?
a.FICA Taxes Payable and State Unemployment Taxes Payable
b.Federal Unemployment Taxes Payable and State Unemployment Taxes Payable
c.Federal Unemployment Taxes Payable and FICA Taxes Payable
d.Federal Income Taxes Payable and FICA Taxes Payable
Danner Corporation reported net sales of $600,000, $680,000, and $780,000 in the
years 2013, 2014, and 2015, respectively. If 2013 is the base year, what percentage do
2015 sales represent of the base?
a.115%
b.130%
c.77%
d.30%
At what point in time does a company recognize an expense when it uses the allowance
method of accounting for uncollectible accounts?
a.When a customer€s account is identified as being uncollectible
b.In the same period as the revenue is earned
c.At the time expenses related to the collection activities are incurred
d.At the time the account is written off
In a recent year Ley Corporation had net income of $150,000, interest expense of
$30,000, and a times interest earned ratio of 8. What was Ley Corporation’s income
before taxes for the year?
a.$270,000
b.$240,000
c.$210,000
d.None of these answer choices are correct.
Which of the following statements is true regarding profit margin?
a.Profit margin can be improved by decreasing the gross profit rate and/or controlling
operating expenses and other costs
b.Profit margin does not vary across industries.
c.Discount stores with high merchandise turnover generally have higher profit margins.
d.If the profit margin has a higher value, this suggests favorable return on each dollar of
sales.
Young Company lends Dobson industries $40,000 on January 1, 2014, accepting a
9-month, 12% interest note. If Dobson dishonors the note and does not pay it in full at
maturity but Young expects that it will eventually be able to collect the debt, which of
the following entries should most likely be made by Young Company?
During October, Guiding Light Company experiences the following transactions in
establishing a petty cash fund.
Instructions
Journalize the entries in October that pertain to the petty cash fund.
On September 1, 2014, Watkins Company establishes a petty cash fund by issuing a
check for $250 to Mike Martz, the custodian of the petty cash fund. On September 30,
2014, Mike Martz submitted the following paid petty cash vouchers for replenishment
of the petty cash fund when there is $35 cash in the fund:
Instructions
Prepare the journal entries required to establish the petty cash fund on September 1 and
the
replenishment of the fund on September 30.
The adjusted trial balance of Warbocks Corporation at December 31, 2014 includes the
following accounts: Retained Earnings $12,600; Dividends $5,000; Service Revenue
$30,000; Salaries and Wages Expense $15,000; Insurance Expense $2,000; Rent
Expense $4,500; Supplies Expense $500; and Depreciation Expense $1,000. Prepare a
retained earnings statement for the year.
Foyle Company needs to make adjusting entries for each of the following reconciling
items. Identify the account to be debited and the account to be credited in each case.
Selected information from the comparative financial statements of Barcelona Company
for the year ended December 31 appears below:
Instructions
Answer the following questions relating to the year ended December 31, 2014. Show
computations.
1)The inventory turnover for 2014 is __________.
2)The number of times interest earned in 2014 is __________.
3)The accounts receivable turnover for 2014 is __________.
4)The return on assets for 2014 is __________.
5)The current cash debt coverage for 2014 is __________.
West County Bank agrees to lend Drake Builders Company $200,000 on January 1.
Drake Builders Company signs a $200,000, 6%, 6-month note. What entry will Drake
Builders Company make to pay off the note and interest at maturity assuming that
interest has been accrued to June 30?