The following balance sheet information is provided for Apex Company for 2014:
What is the company’s working capital?
A.$20,300
B.$4,900
C.$22,900
D.$24,500
Which one of the following is not a prescribed event for the filing of Form 8-K?
A.bankruptcy or receivership.
B.changes in control of the registrant.
C.resignation of a middle manager.
D.changes in the registrant’s independent auditor.
E.acquisitions or dispositions of assets.
In a statement of financial affairs, assets are classified
A.according to whether they are pledged with particular creditors.
B.as current or noncurrent.
C.as monetary or nonmonetary.
D.as operating or non-operating.
E.as direct or indirect.
On a statement of financial affairs, a specific liability may be classified as
A.current or long-term.
B.secured or unsecured.
C.monetary or nonmonetary.
D.direct or indirect.
E.past due or not yet due.
Steuben Company produces dog houses. During 2013, Steuben Company incurred the
following costs:
Based on the above information, which of the following would not be treated as a
product cost:
A.office manager’s salary
B.rent expense incurred on manufacturing facility
C.depreciation on manufacturing equipment
D.salaries of factory machine operators
The partnership contract for Hanes and Jones LLP provides that Hanes is to receive a
bonus of 20% of net income (after the bonus) and that the remaining net income is to be
divided equally. If the partnership income before the bonus for the year is $57,600,
Hanes’ share of this pre-bonus income is:
A.$28,800.
B.$33,600.
C.$34,560.
D.$35,520.
E.$38,400.
Which one of the following forms is used in connection with registration of securities
of real estate companies?
A.S-8.
B.S-1.
C.S-4.
D.S-3.
E.S-11.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the
following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to
Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of
the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman,
respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of
$52,000 in the second year.
What was the balance in Eaton’s Capital account at the end of the first year?
A.$120,900.
B.$118,300.
C.$126,100.
D.$80,600.
E.$111,500.
Yi Company began operations on January 1, 2013. During 2013, the company engaged
in the following cash transactions:
1) issued stock for $40,000
2) borrowed $25,000 from its bank
3) provided consulting services for $38,000
4) paid back $15,000 of the bank loan
5) paid rent expense for $9,000
6) purchased equipment costing $12,000
7) paid $3,000 dividends to stockholders
8) paid employees’ salaries, $21,000
What is Yi’s net cash flow from investing activities?
A.Inflow of $40,000
B.Outflow of $37,000
C.Inflow of $28,000
D.Outflow of $12,000
Regarding the effects of end-of-period adjustments, state whether each of the following
statements is true or false.
_____ a) Recording the usage of supplies involves a decrease in assets and a decrease in
equity.
_____ b) The accrual of salaries is considered a claims exchange transaction.
_____ c) Recording services performed on a prepaid contract involves a decrease in
liabilities and an increase in assets.
_____ d) End of period adjustments never affect cash flows.
_____ e) Failure to record accrued salaries at the end of the year will cause reported
income to be higher than it should have been.
Shenandoah Springs Company is considering two investment opportunities whose cash
flows are provided below:
The company’s hurdle rate is 12%. What is the present value index of Investment B?
(Do not round your PV factors and intermediate calculations.)
A.1.01
B.1.16
C.0.86
D.None of these answers is correct.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the
following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to
Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of
the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman,
respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of
$52,000 in the second year.
What was Young’s total share of net income for the second year?
A.$17,160 income.
B.$4,160 income.
C.$19,760 income.
D.$17,290 income.
E. $28,080 income.
Houston Company began business operations and experienced the following
transactions during 2013:
1) Issued common stock for $20,000 cash.
2) Provided services to customers for $50,000 on account.
3) Purchased $1,000 of supplies on account.
4) Paid $12,000 cash to rent office space for a 12-month period beginning July 1.
5) Collected $46,000 cash from customers.
6) Paid cash for $36,000 of operating expenses.
7) Adjusted the accounting records to reflect that there was $300 of supplies remaining
on hand at year-end.
8) Recorded an end-of-year adjustment to recognize rent expense.
Required:
a) Record the above transactions on a horizontal statements model, reflecting their
effect on the different financial statements.
b) Prepare Houston Company’s income statement, balance sheet and statement of cash
flows for the year ended December 31, 2013.
Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments
of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed
to (1) interest of 10% of the beginning capital balance each year, (2) annual
compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss
in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was
$150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use
every month during 2012 and 2013.
What was Cleary’s capital balance at the end of 2012?
A.$100,000.
B.$117,000.
C.$119,000.
D.$129,000.
E.$153,000.
Young Company provided services to a customer for $6,500 cash. As a result of this
event,
A.total assets decreased.
B.total liabilities increased.
C.net income increased.
D.cash flow from financing activities increased.
A company that was to be liquidated had the following liabilities:
Total liabilities with priority are calculated to be what amount?
A.$19,000.
B.$37,950.
C.$43,725.
D.$44,000.
E.$144,000.
Barry Company purchased two identical inventory items. The item purchased first cost
$7.00 and the item purchased second cost $9.00. Barney sold one of the items for
$12.00. Which of the following statements is true?
A.Ending inventory will be lower if Barney uses weighted average than it would be if
FIFO were used.
B.Cost of goods sold will be higher if Barney uses FIFO than it would be if weighted
average were used.
C.Ending inventory will be the same no matter which cost flow method is used.
Describe the decision rules management should use for accepting and rejecting capital
projects under each of the following capital budgeting models: net present value model,
internal rate of return model, payback period, and the unadjusted rate of return model.
Reno Company provided the following information regarding its operations for the
month ending September 30, 2013:
Required:
1) Compute the firm’s total manufacturing overhead cost.
2) Prepare a schedule of inventory costs that shows total product costs, ending
inventory, and cost of goods sold; and
3) Prepare an income statement for the month ending September 30, 2013.
To what does the term Chapter 11 bankruptcy refer?
Assume the partnership of Howell, Madrid, and Waldrop has been in existence for a
number of years. Howell decides to withdraw from the partnership when the partners’
capital balances are as follows:
An appraisal of the business and its net assets estimates the fair value to be $154,000.
Land with a book value of $20,000 has a fair value of $35,000. Howell has agreed to
receive $84,000 in exchange for her partnership interest.
What are the remaining partners’ capital balances after Howell’s interest is dissolved,
assuming the goodwill method is applied?
What is a wrap-around filing?
Washington Co. began operations on January 1, 2013, by issuing $10,000 in common
stock to the stockholders. On March 1, 2013, Washington accepted an advance of
$18,000 to provide services for a one-year period beginning April 1. During 2013,
services in the amount of $16,000 were provided to customers on account, and 80% of
this amount was collected by year-end. During 2013, operating expenses incurred on
account were $12,000, and 60% of this amount was paid by year-end. During the year,
Washington paid $600 to purchase supplies. By year-end, $540 of the supplies had been
used. Dividends to stockholders were $1,000 during the year. During 2013, Washington
paid salaries of $14,000, and on December 31, 2013, the company accrued salaries of
$1,400.
Washington recorded all appropriate adjusting entries at year end.
1) What would Washington report for service revenue for 2013?
2) What would Washington report for salaries expense for 2013?
3) What would Washington report for supplies expense for 2013?
4) What would the amount be for net cash flows from operating activities for 2013?
5) What is the net income for 2013?
6) What would the balance in the retained earnings account be at December 31, 2013?
Lucky Co. had cash of $65,000, inventory worth $117,000, and a building worth
$169,000. Unfortunately, the company also had accounts payable of $234,000, a note
payable of $104,000 (secured by the inventory), liabilities with priority of $26,000, and
a bond payable of $195,000 (secured by the building).
In a Chapter 7 bankruptcy, total assets available to pay liabilities with priority and
unsecured creditors are calculated to be what amount?