! ! ! ! DrSharonLevinACCT221FinalExamF13Ver137481 #! Multiple Choice: 2 points each 1. On January 1, 2013, Daniels Corporation issued $5,000,000, 10-year, 8% bonds at 98. Interest is payable semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2013 is a. Cash ............................................................................. 5,000,000 Bonds Payable ..................................................... 5,000,000 b. Cash ............................................................................. 4,900,000 Discount on Bonds Payable!!!!!!!!!!!.. 100,000 Bonds Payable ..................................................... 5,000,000 c. Premium on Bonds Payable ......................................... 100,000 Cash ............................................................................. 4,800,000 Bonds Payable ..................................................... 4,900,000 d. Cash ............................................................................. 5,000,000 Bonds Payable ...................................................... 4,900,000 Discount on Bonds Payable .................................. 100,000 2. Levin Company issued 500 shares of no-par common stock for $10,000. Which of the following journal entries would be made if the stock has a stated value of $1 per share? a. Cash 10,000 Common Stock 10,000 b. Cash 10,000 Common Stock 500 Paid in Capital in Excess of Par 9,500 c. Cash 10,000 Common Stock 500 Paid-in Capital in Excess of Stated Value 9,500 d. Cash 9,500 Common Stock 9,000 Paid-in Capital in Excess of Stated Value 500 ! ! ! ! DrSharonLevinACCT221FinalExamF13Ver137481 $! 3. Quader industries owns 25% of Maxi Company. For the current year, Maxi reports net income of $1,000,000 and declares and pays a $100,000 cash dividend. Which of the following correctly presents the journal entries to record Quader’s equity in Maxi’s net income and the receipt of dividends from Maxi? a. Dec. 31 Stock Investments ....................... 1,000,000 Revenue from Stock Investments 1,000,000 Dec. 31 Cash .............................................. 100,000 Stock Investments .................. 100,000 b. Dec. 31 Stock Investments ............................. 25,000 Revenue from Stock Investments 25,000 Dec. 31 Cash ................................................... 2,500 Stock Investments ....................... 2,500 c. Dec. 31 Stock Investments ........................ 750,000 Revenue from Stock Investments 750,000 Dec. 31 Cash ................................................. 25,000 Stock Investments ..................... ...

1. ! !
! !
DrSharonLevinACCT221FinalExamF13Ver137481 #!
Multiple Choice: 2 points each
1. On January 1, 2013, Daniels Corporation issued $5,000,000,
10-year, 8% bonds
at 98. Interest is payable semiannually on January 1 and July 1.
The journal
entry to record this transaction on January 1, 2013 is
a. Cash .............................................................................
5,000,000
Bonds Payable .....................................................
5,000,000
b. Cash .............................................................................
4,900,000
Discount on Bonds Payable!!!!!!!!!!!.. 100,000
Bonds Payable .....................................................
5,000,000
c. Premium on Bonds Payable .........................................
100,000
Cash .............................................................................
4,800,000
Bonds Payable .....................................................

2. 4,900,000
d. Cash .............................................................................
5,000,000
Bonds Payable ......................................................
4,900,000
Discount on Bonds Payable ..................................
100,000
2. Levin Company issued 500 shares of no-par common stock
for $10,000. Which
of the following journal entries would be made if the stock has
a stated value
of $1 per share?
a. Cash 10,000
Common Stock 10,000
b. Cash 10,000
Common Stock 500
Paid in Capital in Excess of Par 9,500
c. Cash 10,000
Common Stock 500
Paid-in Capital in Excess of Stated Value 9,500
d. Cash 9,500
Common Stock 9,000
Paid-in Capital in Excess of Stated Value 500

3. ! !
! !
DrSharonLevinACCT221FinalExamF13Ver137481 $!
3. Quader industries owns 25% of Maxi Company. For the
current year, Maxi
reports net income of $1,000,000 and declares and pays a
$100,000 cash
dividend. Which of the following correctly presents the journal
entries to
record Quader’s equity in Maxi’s net income and the receipt of
dividends
from Maxi?
a. Dec. 31 Stock Investments ....................... 1,000,000
Revenue from Stock Investments 1,000,000
Dec. 31 Cash .............................................. 100,000
Stock Investments .................. 100,000
b. Dec. 31 Stock Investments ............................. 25,000
Revenue from Stock Investments 25,000
Dec. 31 Cash ................................................... 2,500
Stock Investments ....................... 2,500
c. Dec. 31 Stock Investments ........................ 750,000
Revenue from Stock Investments 750,000
Dec. 31 Cash ................................................. 25,000

4. Stock Investments ..................... 25,000
d. Dec. 31 Revenue from Stock Investments 250,000
Stock Investments ......................... 250,000250250,000
Dec. 31 Stock Investments ........................... 25,000
Cash ........................................ 25,000
4. A company budgeted unit sales of 200,000 units for January
2013 and 300,000
units for February 2013. The company has a policy of having an
inventory of
units on hand at the end of each month equal to 30% of next
month's
budgeted unit sales. If there were 60,000 units of inventory on
hand on
December 31, 2013, how many units should be produced in
January 2013
in order for the company to meet its goals?
a. 60,000 units
b. 90,000 units
c. 190,000 units
d. 230,000 units
! !
! !

5. DrSharonLevinACCT221FinalExamF13Ver137481 %!
5. Poisson, Inc. has the following income statement (in
millions):
Poisson, Inc.
Income Statement
For the Year Ended December 31, 3
Net Sales $10,000
Cost of Goods Sold 3,500
Gross Profit 6,500
Operating Expenses 5,000
Net Income $1,500
Using vertical analysis, what percentage is assigned to Cost of
Goods Sold?
a. 30%
b. 35%
c. 65%
d. None of the above
6. Rose, Inc. completed Job No. B14 during 2013. The job cost
sheet listed the
following:
Direct materials $50,000
Direct labor $30,000
Manufacturing overhead applied $20,000
Units produced 10,000 units
Units sold 3,000 units
How much is the cost of the finished goods on hand from this
job?
a. $100,000

6. b. $90,000
c. $80,000
d. $70,000
7. In the month of November, a department had 40,000 units in
beginning work in
process that were 80% complete. During November, 60,000
units were
transferred into production from another department. At the end
of
November there were 30,000 units in ending work in process
that were 30%
complete. Materials are added at the beginning of the process,
while
conversion costs are incurred uniformly throughout the process.
The
equivalent units of production for materials for November were
a. 90,000 equivalent units.
b. 100,000 equivalent units.
c. 104,000 equivalent units.
d. 80,000 equivalent units.
! !
! !
DrSharonLevinACCT221FinalExamF13Ver137481 &!
8. A company developed the following per-unit standards for

7. its product: 1.75
pounds of direct materials at $5 per pound. Last month, 3,000
pounds of
direct materials were purchased for $15,700. The direct
materials price
variance for last month was
a. $500 unfavorable
b. $700 unfavorable
c. $500 favorable
d. $700 favorable
9. In incremental analysis,
a. only fixed costs are relevant
b. only variable costs are relevant
c. costs are relevant if they change between alternatives
d. costs are not relevant if they change between alternatives
10. A company's planned activity level for next year is
expected to be 200,000
machine hours. At this level of activity, the company budgeted
the following
manufacturing overhead costs:
Variable Fixed
Indirect materials $300,000 Depreciation $80,000
Indirect labor 400,000 Taxes 70,000
Factory supplies 100,000 Supervision 50,000

8. A flexible budget prepared at the 225,000 machine hours level
of activity
would show total manufacturing overhead costs of
a. $800,000
b. $900,000
c. $1,000,000
d. $1,100,000
! !
! !
DrSharonLevinACCT221FinalExamF13Ver137481 '!
Problem 1: 10 points
Caballero Manufacturing incurs unit costs of $15 ($10 variable
and $5 fixed) in making
a sub-assembly part for its finished product. A supplier offers
to make 20,000 of the
assembly part at $13.75 per unit. If the offer is accepted,
Caballero will save all
variable costs but no fixed costs.
Instructions:
Part A) Prepare an analysis showing the total cost savings, if
any, Caballero will

9. realize by buying the part.
Part B) Caballero Company should _________ the part because
total annual costs to
make are _________ than total costs to buy.
Problem 2: 10 points
Ziray Corporation has the following cost records for November
2013.
Indirect factory labor $ 5,107 Factory utilities $ 613
Direct materials used 24,826 Depreciation, factory equipment
1,499
Work in process, 11/1/13 3,267 Direct labor 33,052
Work in process, 11/30/13 3,633 Maintenance, factory
equipment 1,958
Finished goods, 11/1/13 4,609 Indirect materials 2,749
Finished goods, 11/30/13 7,429 Factory manager's salary 4,038
Instructions: Prepare a cost of goods manufactured schedule for
November 2013.

10. ! !
! !
DrSharonLevinACCT221FinalExamF13Ver137481 (!
Problem 3: 15 points
Here are comparative balance sheets for Wilson Company.
Wilson Company
Comparative Balance Sheets
December 31, 2013
Assets 2013 2012
Cash $ 44,550 $ 13,500
Accounts receivable 24,300 18,900
Inventories 33,750 24,300
Prepaid expenses 8,100 12,150
Long-term investments 0 24,300
Equipment 81,000 43,200

11. Accumulated depreciation—Equipment (27,000) (18,900)
Total assets $ 164,700 $ 117,450
Liabilities and Stockholder’s Equity
Accounts payable $ 22,950 $ 9,450
Bonds payable 49,950 63,450
Common stock ($1 par) 54,000 31,050
Retained earnings 37,800 13,500
Total liabilities and stockholder’s equity $ 164,700 $ 117,450
Additional information:
1. The 2013 Income Statement reported $8,100 in depreciation
expense, a $5,400 loss on
sale of investments and Net income of $48,600.
2. Cash dividends of $24,300 were declared and paid.
3. Long-term investments that has a cost of $24,300 were sold
for $18,900
4. Sales for 2013 were $162,000.
Instructions: Prepare a statement of cash flows for 2013 using
the indirect method.
Prob
! !

12. ! !
DrSharonLevinACCT221FinalExamF13Ver137481 )!
Problem 5: 10 points
Stein Company had the following transactions pertaining to its
short-term stock
investments. Stein owns more than 20% of the Pine Company
stock and has significant
influence in decision-making.
Jan. 1 Purchased 50,000 shares of Pine Company stock as an
investment for
$499,750 cash plus brokerage fees of $250.
June 1 Received cash dividends of $0.25 per share on the Pine
Company stock
investment.
Sept. 15 Sold 2,000 shares of the Pine Company stock
investment for $220,100
less brokerage fees of $100.
Instructions
Journalize the transactions.
Problem 6: 10 points

13. Long Company has a unit-selling price of $750, variable costs
per unit of $400, and fixed
costs of $300,000.
Instructions:
Part A) Compute the break-even point in units. Round answer
up to the next whole unit.
Part B) Compute the break even in dollars.
Part C) Assume Long Company sets a target net income goal of
$1,200,000.
Problem 4: 10 points
Cosmo Corporation is projecting a cash balance of $32,785 in
its December 31, 2013, balance
sheet. Cosmo schedule of expected collections from customers
for the third quarter of 2013
shows total collections of $190,875. The schedule of expected
payments for direct materials for
the third quarter of 2013 shows total payments of $41,300.
Other information gathered for the
first quarter of 2013 is: sale of equipment $3,471, direct labor
$69,178, manufacturing overhead
$37,543, and purchase of securities $15,000, plus a $300
brokerage fee. Selling and
administrative expenses are projected to be $45,116; this figure
includes $1,116 in depreciation
expense on the office equipment. All costs and expenses will
be paid in cash. Cosmo wants to
maintain a balance of at least $25,000 cash at the end of each

14. quarter.
Instructions: Complete the cash budget for the first quarter.