1) on october 31, a fire destroyed ph inc.’s entire retail inventory. the inventory on hand
as of january 1 totaled $1,360,000. from january 1 through the time of the fire, the
company made purchases of $330,000 and had sales of $720,000. assuming the rate of
gross profit to selling price is 40%, what is the approximate value of the inventory that
was destroyed?
a.$1,360,000
b.$1,346,000
c.$970,000
d.$1,258,000
2) balcom corporation acquires a coal mine at a cost of $1,500,000. intangible
development costs total $360,000. after extraction has occurred, balcom must restore
the property (estimated fair value of the obligation is $180,000), after which it can be
sold for $510,000. balcom estimates that 5,000 tons of coal can be extracted. if 900 tons
are extracted the first year, which of the following would be included in the journal
entry to record depletion?
a.debit to accumulated depletion for $275,400
b.debit to inventory for $275,400
c.credit to inventory for $270,000
d.credit to accumulated depletion for $459,000
3) under ifrs, inventories are classified as
a.noncurrent assets
b.current assets
c.stockholders’ equity
d.current liabilities
4) the following data concerning the retail inventory method are taken from the
financial records of welch company.
the ending inventory at retail should be
a.$148,000
b.$120,000
c.$128,000
d.$84,000
5) arlington company is constructing a building. construction began on january 1 and
was completed on december 31. expenditures were $4,000,000 on march 1, $3,300,000
on june 1, and $5,000,000 on december 31. arlington company borrowed $2,000,000 on
january 1 on a 5-year, 12% note to help finance construction of the building. in
addition, the company had outstanding all year a 10%, 3-year, $4,000,000 note payable
and an 11%, 4-year, $7,500,000 note payable.
what are the weighted-average accumulated expenditures?
a.$7,300,000
b.$5,258,333
c.$12,300,000
d.$6,150,000
6) the occurrence which most likely would have no effect on 2012 net income
(assuming that all amounts involved are material) is the
a.sale in 2012 of an office building contributed by a stockholder in 1983
b.collection in 2012 of a receivable from a customer whose account was written off in
2011 by a charge to the allowance account
c.settlement based on litigation in 2012 of previously unrecognized damages from a
serious accident which occurred in 2010
d.worthlessness determined in 2012 of stock purchased on a speculative basis in 2008
7) a machine cost $360,000, has annual depreciation of $60,000, and has accumulated
depreciation of $270,000 on december 31, 2012. on april 1, 2013, when the machine
has a fair value of $82,500, it is exchanged for a machine with a fair value of $405,000
and the proper amount of cash is paid. the exchange lacked commercial substance.
the gain to be recorded on the exchange is
a.$0
b.$7,500 loss
c.$15,000 gain
d.$45,000 gain
8)
what will be the balance on september 1, 2018 in a fund which is accumulated by
making $10,000 annual deposits each september 1 beginning in 2011, with the last
deposit being made on september 1, 2018? the fund pays interest at 8% compounded
annually.
a.$106,366
b.$89,229
c.$75,600
d.$57,466
9) all the following are differences between financial and managerial accounting in how
accounting information is used except to
a.plan and control company’s operations
b.decide whether to invest in the company
c.evaluate borrowing capacity to determine the extent of a loan to grant
d.all the above
10) with respect to the computation of earnings per share, which of the following would
be most indicative of a simple capital structure?
a.common stock, preferred stock, and convertible securities outstanding in lots of even
thousands
b.earnings derived from one primary line of business
c.ownership interest consisting solely of common stock
d.none of these
11) the primary ifrs related to reporting and recognition of liabilities is found in
a.ias 10 and ias 39
b.ias 17 and ias 23
c.ias 1 and ias 37
d.ias 27 and ias 32