The board of directors of Bosco Company declared a cash dividend on November 15,
2014, to be paid on December 15, 2014, to stockholders owning the stock on November
30, 2014. Given these facts, the date of November 30, 2014, is referred to as the
a.declaration date.
b.record date.
c.payment date.
d.ex-dividend date.
On January 1, 2014, $2,000,000, 10-year, 10% bonds, were issued for $1,940,000.
Interest is paid annually on January 1. If the issuing corporation uses the straight-line
method to amortize discount on bonds payable, the monthly amortization amount is
a.$19,400.
b.$6,000.
c.$1,616.
d.$500.
Jack’s Copy Shop bought equipment for $150,000 on January 1, 2013. Jack estimated
the useful life to be 3 years with no salvage value, and the straight-line method of
depreciation will be used. On January 1, 2014, Jack decides that the business will use
the equipment for a total of 5 years. What is the revised depreciation expense for 2014?
a.$50,000.
b.$20,000.
c.$25,000.
d.$37,500.
The Cain Company has just completed a physical inventory count at year end,
December 31, 2014. Only the items on the shelves, in storage, and in the receiving area
were counted and costed on the FIFO basis. The inventory amounted to $80,000.
During the audit, the independent CPA discovered the following additional information:
(a)There were goods in transit on December 31, 2014, from a supplier with terms FOB
destination, costing $10,000. Because the goods had not arrived, they were excluded
from the physical inventory count.
(b)On December 27, 2014, a regular customer purchased goods for cash amounting to
$1,000 and had them shipped to a bonded warehouse for temporary storage on
December 28, 2014. The goods were shipped via common carrier with terms FOB
shipping point. The customer picked the goods up from the warehouse on January 4,
2015. Cain Company had paid $500 for the goods and, because they were in storage,
Cain included them in the physical inventory count.
(c)Cain Company, on the date of the inventory, received notice from a supplier that
goods ordered earlier, at a cost of $4,000, had been delivered to the transportation
company on December 28, 2014; the terms were FOB shipping point. Because the
shipment had not arrived on December 31, 2014, it was excluded from the physical
inventory.
(d)On December 31, 2014, there were goods in transit to customers, with terms FOB
shipping point, amounting to $800 (expected delivery on January 8, 2015). Because the
goods had been shipped, they were excluded from the physical inventory count.
(e)On December 31, 2014, Cain Company shipped $2,500 worth of goods to a
customer, FOB destination. The goods arrived on January 5, 2014. Because the goods
were not on hand, they were not included in the physical inventory count.
(f)Cain Company, as the consignee, had goods on consignment that cost $3,000.
Because these goods were on hand as of December 31, 2014, they were included in the
physical inventory count.
Instructions
Analyze the above information and calculate a corrected amount for the ending
inventory. Explain the basis for your treatment of each item.
This information relates to Sherper Co.
1>On April 5 purchased merchandise from Newport Company for $22,000, terms 2/10,
n/10
2>On April 6 paid freight costs of $900 on merchandise purchased from Newport.
3>On April 7 purchased equipment on account for $26,000.
4>On April 8 returned some of April 5 merchandise to Newport Company which cost
$2,000.
5>On April 15 paid the amount due to Newport Company in full.
Instructions
(a)Prepare the journal entries to record the transactions listed above on the books of
Sherper Co. Sherper Co. uses a perpetual inventory system.
(b)Assume that Sherper Co. paid the balance due to Newport Company on May 4
instead of April 15. Prepare the journal entry to record this payment.
Dole Industries had the following inventory transactions occur during 2014:
The company sold 204 units at $126 each and has a tax rate of 30%. Assuming that a
periodic inventory system is used, what is the company’s gross profit using FIFO?
(rounded to whole dollars)
a.$19,528
b.$18,920
c.$6,784
d.$6,176
The following totals for the month of April were taken from the payroll records of Noll
Company.
The entry to record the accrual of federal unemployment tax would include a
a.credit to Federal Unemployment Taxes Payable for $160.
b.debit to Federal Unemployment Taxes Expense for $160.
c.credit to Payroll Tax Expense for $160.
d.debit to Federal Unemployment Taxes Payable for $160.
Use the following data to determine the total dollar amount of assets to be classified as
current assets.
a.$195,000
b.$125,000
c.$285,000
d.$165,000
The interest on a $4,000, 9%, 90-day note receivable is
a.$90.
b.$360.
c.$30.
d.$60.
Randace Enterprises incurred several costs related to the acquisition of plant assets.
At what amount should the land be recorded in Randace€s accounting records?
a.$299,000
b.$277,000
c.$354,000
d.$282,000
The following amounts were taken from the financial statements of R.Dodd Company:
The times interest earned for 2014 is
a.4.0 times.
b.5.0 times.
c.4.5 times.
d.5.5 times.
Which of the following statements is not true regarding the Sarbanes-Oxley Act
(SOX)?
a.The Act calls for increased oversight responsibilities for boards of directors.
b.The Act has resulted in increased penalties for financial fraud by top management.
c.The Act calls for decreased independence of outside auditors reviewing corporate
financial statements.
d.The Act is meant to decrease the likelihood of unethical corporate behavior.
Which of the following is a disadvantage of the corporate form of business entity?
a.Unlimited liability of stockholders
b.Continuous life
c.Lack of government regulation
d.Double taxation
The following items were shown on the balance sheet of Martin Corporation on
December 31, 2014:
Instructions
Complete the following statements and show your computations.
(a)The number of shares of common stock issued was _______________.
(b)The number of shares of common stock outstanding was ____________.
(c)The total sales price of the common stock when issued was $____________.
(d)How much did the treasury stock cost per share? $_______________
(e)What was the average issue price of the common stock? $______________
At December 31, 2014 Keen Company had retained earnings of $1,292,000. During
2014 they issued stock for $49,000, and paid dividends of $17,000. Net income for
2014 was $201,000. The retained earnings balance at the beginning of 2014 was
a.$1,476,000.
b.$1,108,000.
c.$1,157,000.
d.$1,427,000.
The interest charged on a $70,000 note payable, at the rate of 6%, on a 60-day note
would be
a.$4,200.
b.$2,100.
c.$1,050.
d.$700.
Danford Trucking purchased a tractor trailer for $126,000. Danford 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 $18,000. If
the truck is driven 80,000 miles in its first year, how much depreciation expense should
Danford record?
a.$8,000.
b.$10,080.
c.$8,640.
d.$9,333.
Mitchell Corporation bought equipment on January 1, 2014. The equipment cost
$180,000 and had an expected salvage value of $30,000. The life of the equipment was
estimated to be 6 years. The depreciation expense using the straight-line method of
depreciation is
a.$35,000.
b.$36,000.
c.$25,000.
d.none of these answer choices are correct.