1) vannoy corporation will invest $30,000 every january 1st for the next six years (2012
2017). if wagner will earn 12% on the investment, what amount will be in the
investment fund on december 31, 2017?
a.$123,342
b.$138,144
c.$243,456
d.$272,670
2) mitchell corporation prepared the following reconciliation for its first year of
operations:
the temporary difference will reverse evenly over the next two years at an enacted tax
rate of 40%. the enacted tax rate for 2013 is 35%.
in mitchells 2013 income statement, what amount should be reported for total income
tax expense?
a.$325,000
b.$315,000
c.$295,000
d.$245,000
3) uncertain tax positions
i.are positions for which the tax authorities may disallow a deduction in whole or
in part.
ii.include instances in which the tax law is clear and in which the company believes
an audit is likely.
iii.give rise to tax expense by increasing payables or increasing a deferred
tax liability.
a.i, ii, and iii
b.i and iii only
c.ii only
d.i only
4) on april 1, mooney corporation purchased for $1,710,000 a tract of land on which
was located a warehouse and office building. the following data were collected
concerning the property:
what are the appropriate amounts that mooney should record for the land, warehouse,
and office building, respectively?
a.land, $560,000; warehouse, $360,000; office building, $680,000
b.land, $600,000; warehouse, $400,000; office building, $800,000
c.land, $598,500; warehouse, $384,750; office building, $363,375
d.land, $570,000; warehouse, $380,000; office building, $760,000
5) putnam, inc.
comparative balance sheets
additional information:
a.accounts receivable and accounts payable relate to merchandise held for sale in the
normal course of business. the allowance for bad debts was the same at the end of 2013
and 2012, and no receivables were charged against the allowance. accounts payable are
recorded net of any discount and are always paid within the discount period.
b.the proceeds from the note payable were used to finance the acquisition of property,
plant, and equipment. capital stock was sold to provide additional working capital.
what amount of cash was paid on accounts payable to suppliers during 2013?
a.$4,605,000
b.$4,425,000
c.$4,095,000
d.$3,735,000
6) turner corporation had the following information in its financial statements for the
year ended 2012 and 2013:
what is the payout ratio for turner corporation for the year ended 2013?
a.9.7%
b.12.0%
c.19.4%
d.29.0%
7) sonata corporation will receive $20,000 today (january 1, 2012), and also on each
january 1st for the next five years (2013 2017). what is the present value of the six
$40,000 receipts, assuming a 12% interest rate?
a.$164,456
b.$184,191
c.$324,608
d.$363,560
8) according to the fasb, redeemable preferred stock should be
a.included with common stock
b.included as a liability
c.excluded from the stockholders equity heading
d.included as a contra item in stockholders’ equity
9) corporations issue convertible debt for two main reasons. one is the desire to raise
equity capital that, assuming conversion, will arise when the original debt is converted.
the other is
a.the ease with which convertible debt is sold even if the company has a poor credit
rating
b.the fact that equity capital has issue costs that convertible debt does not
c.that many corporations can obtain financing at lower rates
d.that convertible bonds will always sell at a premium
10) the pre-emptive right enables a stockholder to
a.share proportionately in any new issues of stock of the same class
b.receive cash dividends before other classes of stock without the pre-emptive right
c.sell capital stock back to the corporation at the option of the stockholder
d.receive the same amount of dividends on a percentage basis as the preferred
stockholders
11) icon industries, a company who uses ifrs reporting standards, is installing a new
plant. the company has incurred the following costs
which of these costs can tram capitalize in accordance with ifrs?
a.1, 2, 3, & 4
b.4 only
c.1 & 4
d.1, 3, & 4
12) during 2012, eaton co. introduced a new product carrying a two-year warranty
against defects. the estimated warranty costs related to dollar sales are 2% within 12
months following sale and 3% in the second 12 months following sale. sales and actual
warranty expenditures for the years ended december 31, 2012 and 2013 are as follows:
at december 31, 2013, eaton should report an estimated warranty liability of
a.$0
b.$15,000
c.$35,000
d.$43,000
13) ziggy is considering purchasing a new car. the cash purchase price for the car is
$33,600. what is the annual interest rate if ziggy is required to make annual payments of
$7,800 at the end of the next five years?
a.4%
b.5%
c.6%
d.7%
14) jeremy leasing purchases and then leases small aircraft to interested parties. the
company is currently determining the required rental for a small aircraft that cost them
$600,000. if the lease is for twenty years and annual lease payments are required to be
made at the end of each year, what will be the annual rental if jeremy wants to earn a
return of 10%?
a.$64,070
b.$70,476
c.$10,476
d.$30,314
15) the pricing of issues from inventory must be deferred until the end of the accounting
period under the following method of inventory valuation:
a.moving average
b.weighted-average
c.lifo perpetual
d.fifo
16) a series of equal receipts at equal intervals of time when each receipt is received at
the beginning of each time period is called an
a.ordinary annuity
b.annuity in arrears
c.annuity due
d.unearned receipt
17) on july 1, 2012, ellison company granted sam wine, an employee, an option to buy
600 shares of ellison co. stock for $30 per share, the option exercisable for 5 years from
date of grant. using a fair value option pricing model, total compensation expense is
determined to be $2,700. wine exercised his option on october 1, 2012 and sold his 600
shares on december 1, 2012. quoted market prices of ellison co. stock in 2012 were:
the service period is for three years beginning january 1, 2012. as a result of the option
granted to wine, using the fair value method, ellison should recognize compensation
expense on its books in the amount of
a.$2,700
b.$900
c.$675
d.$0