1) colaw co. pays all salaried employees on a biweekly basis. overtime pay, however, is
paid in the next biweekly period. colaw accrues salaries expense only at its december
31 year end. data relating to salaries earned in december 2012 are as follows:
last payroll was paid on 12/26/12, for the 2-week period ended 12/26/12.
overtime pay earned in the 2-week period ended 12/26/12 was $15,000.
remaining work days in 2012 were december 29, 30, 31, on which days there was no
overtime.
the recurring biweekly salaries total $270,000.
assuming a five-day work week, colaw should record a liability at december 31, 2012
for accrued salaries of
a.$81,000
b.$96,000
c.$162,000
d.$177,000
2) when information about two different enterprises has been prepared and presented in
a similar manner, the information exhibits the characteristic of
a.relevance
b.faithful representation
c.consistency
d.none of these
3) under ifrs, costs in the development phase are
a. never capitalized, but expensed as they are under u.s. gaap
b. capitalized if they exceed development phase costs incurred for previously successful
ventures
c. capitalized once technological feasibility is achieved
d. capitalized on an interim basis, but then expensed prior to the end of the company’s
fiscal year
4) an effective capital allocation process
a.promotes productivity
b.encourages innovation
c.provides an efficient market for buying and selling securities
d.all of these
5) the joint project of the financial accounting standards board (fasb) and the
international accounting standards board (iasb) related to revenue recognition includes
i. evaluating a customer-consideration model
ii. eliminating inconsistencies in the existing conceptual guidance
iii. establishing a single, comprehensive standard
a.ii and iii only
b.i and ii only
c.i, ii, and iii
d.neither i, ii, nor iii are currently included in the joint project of the fasb and iasb
6) lynne corporation acquired a patent on may 1, 2012. lynne paid cash of $40,000 to
the seller. legal fees of $1,000 were paid related to the acquisition. what amount should
be debited to the patent account?
a.$1,000
b.$39,000
c.$40,000
d.$41,000
7) pappy corporation received cash of $18,000 on september 1, 2012 for one years rent
in advance and recorded the transaction with a credit to unearned rent revenue. the
december 31, 2012 adjusting entry is
a.debit rent revenue and credit unearned rent revenue, $6,000
b.debit rent revenue and credit unearned rent revenue, $12,000
c.debit unearned rent revenue and credit rent revenue, $6,000
d.debit cash and credit unearned rent revenue, $12,000
8) at december 31, 2012, kifer company had 600,000 shares of common stock
outstanding. on october 1, 2013, an additional 120,000 shares of common stock were
issued. in addition, kifer had $10,000,000 of 6% convertible bonds outstanding at
december 31, 2012, which are convertible into 270,000 shares of common stock. no
bonds were converted into common stock in 2013. the net income for the year ended
december 31, 2013, was $3,000,000. assuming the income tax rate was 30%, the diluted
earnings per share for the year ended december 31, 2013, should be (rounded to the
nearest penny)
a.$5.43
b.$4.00
c.$3.80
d.$3.33
9) on january 2, 2012, wine corporation wishes to issue $3,000,000 (par value) of its
8%, 10-year bonds. the bonds pay interest annually on january 1. the current yield rate
on such bonds is 10%. using the interest factors below, compute the amount that wine
will realize from the sale (issuance) of the bonds.
a.$3,000,000
b.$2,631,204
c.$3,000,018
d.$3,318,078
10) which of the following is correct?
a.selling costs are product costs
b.manufacturing overhead costs are product costs
c.interest costs for routine inventories are product costs
d.all of these
11) which of the following is not an acceptable way of displaying the components of
other comprehensive income?
a.combined statement of retained earnings
b.second income statement
c.combined statement of comprehensive income
d.as part of the statement of stockholders’ equity
12) which of the following should be excluded from long-term liabilities?
a.obligations payable at some date beyond the operating cycle
b.most pension obligations
c.long-term liabilities that mature within the operating cycle and will be paid from a
sinking fund
d.none of these
13) garwood company has the following items: write-down of inventories, $360,000;
loss on disposal of sports division, $555,000; and loss due to an expropriation,
$339,000. ignoring income taxes, what total amount should garwood company report as
extraordinary losses?
a.$339,000
b.$555,000
c.$699,000
d.$894,000
14) which of the following should not be included in the current liabilities section of the
balance sheet?
a.trade notes payable
b.short-term zero-interest-bearing notes payable
c.the discount on short-term notes payable
d.all of these are included
15) remington construction company uses the percentage-of-completion method. during
2012, the company entered into a fixed-price contract to construct a building for
sherman company for $18,000,000. the following details pertain to the contract:
the amount of construction costs incurred during 2013 was
a.$9,000,000
b.$5,625,000
c.$3,375,000
d.$1,500,000
16) the following information was available from the inventory records of rich
company for january:
assuming that rich does not maintain perpetual inventory records, what should be the
inventory at january 31, using the weighted-average inventory method, rounded to the
nearest dollar?
a.$9,454
b.$9,213
c.$9,234
d.$9,324
17) hiller corporation makes an investment today (january 1, 2012). they will receive
$40,000 every december 31st for the next six years (2012 2017). if hiller wants to earn
12% on the investment, what is the most they should invest on january 1, 2012?
a.$164,456
b.$184,191
c.$324,608
d.$363,560
18) charlie corp. is purchasing new equipment with a cash cost of $150,000 for an
assembly line. the manufacturer has offered to accept $34,440 payment at the end of
each of the next six years. how much interest will charlie corp. pay over the term of the
loan?
a.$34,440
b.$150,000
c.$184,440
d.$56,640