1) factors that shape an accounting information system include the
a.nature of the business
b.size of the firm
c.volume of data to be handled
d.all of these
2) oslo corporation has two products in its ending inventory, each accounted for at the
lower of cost or market. a profit margin of 30% on selling price is considered normal
for each product. specific data with respect to each product follows:
in pricing its ending inventory using the lower-of-cost-or-market, what unit values
should oslo use for products #1 and #2, respectively?
a.$20.00 and $32.50
b.$23.00 and $32.50
c.$23.00 and $30.00
d.$22.50 and $27.00
3) coaster manufactures and sells logging equipment. due to the nature of its business,
coaster is unable to reliably predict bad debts. during 2012, coaster sold equipment
costing $3,600,000 for $5,400,000. the terms of the sale were 20% down, with equal
payments due quarterly over the next 3 years. all payments for 2012 were made on
schedule. round answers to two places.
assuming that coaster uses the installment method of accounting for its installment
sales, what amount of realized gross profit will coaster report in its income statement
for the year ended december 31, 2012?
a.$2,520,000
b.$1,680,000
c.$ 840,000
d.$ 554,400
4) which of the following is a primary characteristic of useful accounting information?
a.conservatism
b.comparability
c.faithful representation
d.consistency
5) a company is legally obligated for the costs associated with the retirement of a
long-lived asset
a.only when it hires another party to perform the retirement activities
b.only if it performs the activities with its own workforce and equipment
c.whether it hires another party to perform the retirement activities or performs the
activities itself
d.when it is probable the asset will be retired
6) during the course of your examination of the financial statements of doppler
corporation for the year ended december 31, 2013, you found a new account,
“investments.” your examination revealed that during 2013, doppler began a program of
investments, and all investment-related transactions were entered in this account. your
analysis of this account for 2013 follows:
doppler corporation
analysis of investments
for the year ended december 31, 2013
additional information:
1>the fair value for each security as of the 2013 date of each transaction follow:
2>all of the investments of doppler are nominal in respect to percentage of ownership
(5% or less).
3>each investment is considered by dopplers management to be available-for-sale.
instructions
(1)prepare any necessary correcting journal entries related to investments (a) and (b).
(2)prepare the entry, if necessary, to record the proper valuation of the available-for-sale
equity security portfolio as of december 31, 2013.
7) which of the following items would be reported net of tax on the face of the income
statement?
a.prior period adjustment
b.unusual gain
c.cumulative effect of a change in an accounting principle
d.discontinued operations
8) miles company, a wholesaler, budgeted the following sales for the indicated months:
all merchandise is marked up to sell at its invoice cost plus 20%. merchandise
inventories at the beginning of each month are at 30% of that month’s projected cost of
goods sold.
merchandise purchases for july are anticipated to be
a.$2,448,000
b.$3,114,000
c.$2,550,000
d.$2,595,000
9) the following costs are incurred during the research and development phases of a
laser bone scanner
identify which of these are development phase items and will be immediately expensed
under
u.s. gaap and ifrs.
u.s. gaap ifrs
1. $1,000,000 $1,000,000
2. 2,200,000 1,200,000
3. 2,200,000 3,200,000
d. 3,200,000 3,200,000
10) in 2012, eklund, inc., issued for $103 per share, 80,000 shares of $100 par value
convertible preferred stock. one share of preferred stock can be converted into three
shares of eklund’s $25 par value common stock at the option of the preferred
stockholder. in august 2013, all of the preferred stock was converted into common
stock. the market value of the common stock at the date of the conversion was $30 per
share. what total amount should be credited to additional paid-in capital from common
stock as a result of the conversion of the preferred stock into common stock?
a.$1,360,000
b.$1,040,000
c.$2,000,000
d.$2,240,000
11) the information provided by financial reporting pertains to
a.individual business enterprises, rather than to industries or an economy as a whole or
to members of society as consumers
b.business industries, rather than to individual enterprises or an economy as a whole or
to members of society as consumers
c.individual business enterprises, industries, and an economy as a whole, rather than to
members of society as consumers
d.an economy as a whole and to members of society as consumers, rather than to
individual enterprises or industries
12) walsh retailers purchased merchandise with a list price of $75,000, subject to trade
discounts of 20% and 10%, with no cash discounts allowable. walsh should record the
cost of this merchandise as
a.$52,500
b.$54,000
c.$58,500
d.$75,000
13) during 2012, bass corporation constructed assets costing $2,000,000. the
weighted-average accumulated expenditures on these assets during 2012 was $600,000.
to help pay for construction, $880,000 was borrowed at 10% on january 1, 2012, and
funds not needed for construction were temporarily invested in short-term securities,
yielding $18,000 in interest revenue. other than the construction funds borrowed, the
only other debt outstanding during the year was a $1,200,000, 10-year, 9% note payable
dated january 1, 2006. what is the amount of interest that should be capitalized by bass
during 2012?
a.$120,000
b.$60,000
c.$116,800
d.$188,800
14) on january 1, 2012, dodd, inc., declared a 15% stock dividend on its common stock
when the fair value of the common stock was $20 per share. stockholders’ equity before
the stock dividend was declared consisted of:
what was the effect on dodds retained earnings as a result of the above transaction?
a.$180,000 decrease
b.$360,000 decrease
c.$600,000 decrease
d.$300,000 decrease
15) spencer corporation will invest $15,000 every december 31st for the next six years
(2012 2017). if spencer will earn 12% on the investment, what amount will be in the
investment fund on december 31, 2017?
a.$61,671
b.$69,072
c.$121,728
d.$136,335