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ACC 421 Final Exam New
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Transactions for Mehta Company for the month of May are presented below.
Prepare journal entries for each of these transactions.
On July 1, 2014, Crowe Co. pays $15,000 to Zubin Insurance Co. for a 3-year
insurance policy. Both companies have fiscal years ending December 31. For
Crowe Co., journalize the entry on July 1 and the adjusting entry on
December 31.
2. Dresser Company’s weekly payroll, paid on Fridays, totals $8,000. Employees
work a 5-day week. Prepare Dresser’s adjusting entry on Wednesday,
December 31, and the journal entry to record the $8,000 cash payment on
Friday, January 2
Side Kicks has year-end account balances of Sales Revenue $808,900; Interest
Revenue $13,500; Cost of Goods Sold $556,200; Administrative Expenses
$189,000; Income Tax Expense $35,100; and Dividends $18,900. Prepare the
year-end closing entrie
To convert cash receipts from customers to revenue on an accrual basis, the
following adjustments are made:
Cash receipts from customers
Subtract beginning A/R
Add ending A/R
Add beginning Unearned Service Revenue
3. Subtract ending Unearned Service Revenue
At the time a company prepays a cost
Starr Co. had sales revenue of $540,000 in 2014. Other items recorded during
the year were
Portman Corporation has retained earnings of $675,000 at January 1, 2014.
Net income during 2014 was $1,400,000, and cash dividends declared and
paid during 2014 totaled $75,000. Prepare
On January 1, 2014, Richards Inc. had cash and common stock of $60,000. At
that date, the company had no other asset, liability, or equity balances. On
January 2, 2014, it purchased for cash $20,000 of equity securities that it
4. classified as available-for-sale. It received cash dividends of $3,000 during the
year on these securities.
Harding Corporation has the following accounts included in its December 31,
2014, trial balance: Accounts Receivable $110,000; Inventory $290,000;
Allowance for Doubtful Accounts $8,000; Patents $72,000; Prepaid Insurance
$9,500; Accounts Payable $77,000; Cash $30,000.
Patrick Corporation’s adjusted trial balance contained the following asset
accounts at December 31, 2014: Prepaid Rent $12,000; Goodwill $50,000;
Franchise Fees Receivable $2,000; Franchises $47,000; Patents $33,000;
Trademarks $10,000
Hawthorn Corporation’s adjusted trial balance contained the following
accounts at December 31, 2014: Retained Earnings $120,000; Common Stock
$750,000;
5. Keyser Beverage Company reported the following items in the most recent
year.
Ames Company reported 2014 net income of $151,000. During 2014, accounts
receivable increased by $13,000 and accounts payable increased by $9,500.
Depreciation expense was $44,000.
Martinez Corporation engaged in the following cash transactions during
2014.
Martinez Corporation engaged in the following cash transactions during
2014.
A comparative balance sheet for Shabbona Corporation is presented below.
6. Chris Spear invested $15,000 today in a fund that earns 8% compounded
annually. (Use the tables
below.)https://edugen.wileyplus.com/edugen/art2/common/pixel.gif
Amy Monroe wants to create a fund today that will enable her to withdraw
$25,000 per year for 8 years, with the first withdrawal to take place 5 years
from today
Zach Taylor is settling a $20,000 loan due today by making 6 equal annual
payments of $4,727.53. (Use the tables below.)
7. Alan Jackson invests $20,000 at 8% annual interest, leaving the money
invested without withdrawing any of the interest for 8 years. At the end of the
8 years, Alan withdraws the accumulated amount of money.
Guillen, Inc. began work on a $7,000,000 contract in 2014 to construct an
office building. Guillen uses the completed-contract method. At December 31,
2014, the balances in certain accounts were Construction in Process
$1,715,000; Accounts Receivable $240,000; and Billings on Construction in
Process $1,000,000.
Lazaro Inc. sells goods on the installment basis and uses the installment-sales
method. Due to a customer default, Lazaro repossessed merchandise that was
originally sold for $800, resulting in a gross profit rate of 40%. At the time of
repossession, the uncollected balance is $520, and the fair value of the
repossessed merchandise is $275
8. Morlan Corporation is preparing its December 31, 2014, financial statements.
Two events that occurred between December 31, 2014, and March 10, 2015,
when the statements were issued, are described below.
Foley Corporation has seven industry segments with total revenues as follows.
Operating profits and losses for the seven industry segments of Foley
Corporation are:
Heartland Company’s budgeted sales and budgeted cost of goods sold for the
coming year are $144,000,000 and $99,000,000, respectively. Short-term
interest rates are expected to average 10%. If Heartland can increase
9. inventory turnover from its present level of 9 times a year to a level of 12
times per year.
The payout ratio is calculated by dividing
Presented below are four segments that have been identified by Haley
Productions:
At December 31, 2014, Grinkov Corporation had the following account
balances.
10. Indicate how these accounts would be reported in Grinkov’s December 31,
2014, balance sheet. The 2013 accounts are collectible in 2015, and the 2014
accounts are collectible in 2016.
Brief Exercise 3-1
Brief Exercise 3-3
Brief Exercise 3-7
Brief Exercise 3-11
Practice Question 41
Multiple Choice Question 56
Brief Exercise 4-1
Brief Exercise 4-10
Brief Exercise 4-11
12. Brief Exercise 18-13
Brief Exercise 24-3 (Essay)
Brief Exercise 24-5
Brief Exercise 24-6
Brief Exercise 18-14
Multiple Choice Question 56
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Number of Questions 30
Score atleast 90% easily with our EXCEL SHEET for any values (EVEN IF
VALUES CHANGES) of below mentioned Question
13. Exercise 129 Prepare the necessary adjusting journal entries indicated by each
item for the year ended December 31, 2017.
Exercise 132
1. An income statement.
2. A retained earnings statement.
3. A balance sheet.
Brief Exercise 3-2 Splish Repair Shop had the following transactions during the
first month of business as a proprietorship. Journalize the transactions
Brief Exercise 3-8 Included in Novak Company’s December 31 trial balance is a
note receivable of $12,360. The note is a 4-month, 10% note dated October 1.
Prepare Novak’s December 31 adjusting entry to record $309 of accrued interest,
and the February 1 journal entry to record receipt of $12,772 from the borrower.
Brief Exercise 4-3 Kingbird Corporation had net sales of $2,423,900 and
interest revenue of $39,100 during 2017. Expenses for 2017 were cost of goods
sold $1,464,800, administrative expenses $218,000, selling expenses $283,500,
and interest expense $54,200. Kingbird’s tax rate is 30%. The corporation had
103,100 shares of common stock authorized and 72,670 shares issued and
outstanding during 2017. Prepare a condensed multiple-step income statement for
Kingbird Corporation.
Exercise 4-2 Presented below is information related to Windsor Company at
December 31, 2017, the end of its first year of operations.
(a) Income from operations
(b) Net income
(c) Comprehensive income
(d) Retained earnings balance at December 31, 2017
14. Brief Exercise 4-7 Sheffield Company has recorded bad debt expense in the
past at a rate of 1.5% of accounts receivable, based on an aging analysis. In 2017,
Sheffield decides to increase its estimate to 2%. If the new rate had been used in
prior years, cumulative bad debt expense would have been $383,900 instead of
$298,500. In 2017, bad debt expense will be $132,400 instead of $96,720. If
Sheffield’s tax rate is 29%, what amount should it report as the cumulative effect
of changing the estimated bad debt rate?
Exercise 104 Presented below are changes in the account balances of Wenn
Company during the year, except for retained earnings.
(a) Compute the net income for the current year.
Question 13 The Marin, Inc. sold 10,350 season tickets at $2,040 each. By
December 31, 2017, 16 of the 40 home games had been played. What amount
should be reported as a current liability at December 31, 2017?
Brief Exercise 5-2 Martinez Corporation’s adjusted trial balance contained the
following asset accounts at December 31, 2017: Cash $9,750, Land $45,600,
Patents $17,100, Accounts Receivable $94,270, Prepaid Insurance $5,640,
Inventory $39,400, Allowance for Doubtful Accounts $4,500, and Equity
Investments (trading) $11,570.Prepare the current assets section of the balance
sheet
Brief Exercise 5-8 Included in Sunland Company’s December 31, 2017, trial
balance are the following accounts: Accounts Payable $221,400, Pension Liability
$380,600, Discount on Bonds Payable $31,100, Unearned Rent Revenue $43,600,
Bonds Payable $406,600, Salaries and Wages Payable $29,000, Interest Payable
$13,460, and Income Taxes Payable $30,460.
Brief Exercise 5-9 Included in Windsor Company’s December 31, 2017, trial
balance are the following accounts: Accounts Payable $249,600, Pension Liability
$376,400, Discount on Bonds Payable $29,400, Unearned Rent Revenue $47,100,
Bonds Payable $409,200, Salaries and Wages Payable $27,100, Interest Payable
$13,990, and Income Taxes Payable $36,700.
15. Brief Exercise 5-13 Sarasota Company reported 2017 net income of $152,800.
During 2017, accounts receivable increased by $14,580 and accounts payable
increased by $9,723. Depreciation expense was $46,700.
Brief Exercise 5-14 Compute the net cash provided (used) by investing
activities.
Brief Exercise 5-15 Compute the net cash used (provided) by financing
activities. 7.
Brief Exercise 6-2 What amount must he invest today if his investment earns
12% compounded annually? What amount must he invest if his investment earns
12% annual interest compounded quarterly?
Brief Exercise 6-6 How much must he invest at the end of each year, at 8%
interest, to meet his needs?
Brief Exercise 6-15 What amount will Pearl receive when it issues the bonds?
Exercise 6-12 In which building would you recommend that The Sheridan
Inc. locate, assuming a 12% cost of funds?
Brief Exercise 18-2 On May 10, 2017, Swifty Co. enters into a contract to
deliver a product to Greig Inc. on June 15, 2017. Greig agrees to pay the full
contract price of $2,060 on July 15, 2017. The cost of the goods is $1,350. Swifty
delivers the product to Greig on June 15, 2017, and receives payment on July 15,
2017. Prepare the journal entries for Swifty related to this contract. Either party
may terminate the contract without compensation until one of the parties performs.
Brief Exercise 18-8 Presented below are three revenue recognition situations.
(a) Groupo sells goods to MTN for $932,000, payment due at delivery.
(b) Groupo sells goods on account to Grifols for $753,000, payment due in 30
days.
16. (c) Groupo sells goods to Magnus for $537,000, payment due in two installments,
the first installment payable in 18 months and the second payment due 6 months
later. The present value of the future payments is $499,700.
Brief Exercise 18-10 (a) Prepare the journal entries for Kingbird on March
1, 2017.
(b) Prepare the journal entries for Kingbird on December 31,
2017.
Brief Exercise 18-13 Prepare Carla’s journal entries to record (a) the sale on
July 10, 2017, and (b) $84,200 of returns on October 11, 2017, and on October 31,
2017. Assume that Carla prepares financial statement on October 31, 2017.
Question 17 Classify the following items as (1) operating, (2) investing, (3)
financing, or (4) significant noncash investing and financing activities, using the
direct method.
Brief Exercise 23-1 Novak Corporation is preparing its 2017 statement of cash
flows, using the indirect method. Presented below is a list of items that may affect
the statement. Using the code below, indicate how each item will affect Novak’s
2017 statement of cash flows.
Brief Exercise 23-7 Whispering Corporation had January 1 and December 31
balances as follows.
Brief Exercise 23-8 In 2017, Martinez Corporation had net cash provided by
operating activities of $511,000, net cash used by investing activities of $992,000,
and net cash provided by financing activities of $570,000. At January 1, 2017, the
cash balance was $330,000.
Brief Exercise 23-9 Teal Corporation had the following 2017 income statement.
(a) Prepare Teal’s cash flows from operating activities section of the
statement of cash flows using the direct method.
(b) Prepare Teal’s cash flows from operating activities section of the
statement of cash flows using the indirect method.
17. Brief Exercise 24-8 (a) The current ratio of a company is 5:1 and its acid-test
ratio is 1:1. If the inventories and prepaid items amount to $530,000, what is the
amount of current liabilities?
(b) A company had an average inventory last year of $209,000 and
its inventory turnover was 6. If sales volume and unit cost remain the same this
year as last and inventory turnover is 8 this year, what will average inventory have
to be during the current year?
(c) A company has current assets of $90,000 (of which $44,000 is
inventory and prepaid items) and current liabilities of $44,000. What is the current
ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a
bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio
be?
(d) A company has current assets of $628,000 and current liabilities
of $255,000. The board of directors declares a cash dividend of $195,000. What is
the current ratio after the declaration but before payment? What is the current ratio
after the payment of the dividend?
Exercise 24-3 Kingbird Company is involved in four separate industries. The
following information is available for each of the four industries.
(a) Revenue test.
(b) Operating profit (loss) test.
(c) Identifiable assets test.
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Question 1
Transactions for Mehta Company for the month of May are presented below.
May 1 B.D. Mehta invests $3,054 cash in exchange for common stock of Mehta
Company, a small welding corporation.
3 Buys equipment on account for $1,547.
Question 2
On July 1, 2012, Crowe Co. pays $19,796 to Zubin Insurance Co. for a 3-year
insurance contract. Both companies have fiscal years ending December 31. For
Crowe Co.
Question 3
Dresser Company's weekly payroll, paid on Fridays, totals $12,000. Employees
work a 5-day week. Prepare Dresser's adjusting entry on Wednesday, December
31, and the
Question 4
Side Kicks has year-end account balances of Sales $876,990; Interest Revenue
$17,650; Cost of Goods Sold $577,500; Operating Expenses $200,240; Income
Tax Expense
Question 5
Financial information exhibits the characteristic of consistency when:
Question 6
What is the relationship between the Securities and Exchange Commission and
accounting standard setting in the United States?
Question 7
Starr Co. had sales revenue of $609,500 in 2012. Other items recorded during the
year were:
19. Cost of goods sold $326,100 Wage expense 125,100 Income tax expense 28,000
Question 8
Portman Corporation has retained earnings of $688,540 at January 1, 2012. Net
income during 2012 was $1,749,750, and cash dividends declared and paid during
2012 totaled
Question 9
On January 1, 2012, Richards Inc. had cash and common stock of $63,640. At that
date the company had no other asset, liability or equity balances. On January 2,
2012, it purchased for cash $24,740 of equity securities that it classified as
available-for-sale. It received cash dividends of $3,300 net of tax during the year
on these securities. In
Question 10
Armstrong Corporation reported the following for 2012: net sales $1,249,000; cost
of goods sold $757,900; selling and administrative expenses $325,400; and an
unrealized
Question 11
Guillen, Inc. began work on a $7,017,700 contract in 2012 to construct an office
building. Guillen uses the completed-contract method. At December 31, 2012, the
Question 12
Lazaro, Inc. sells goods on the installment basis and uses the installment-sales
method. Due to a customer default, Lazaro repossessed merchandise that was
originally sold for
Question 13
Harding Corporation has the following accounts included in its December 31,
2012, trial balance: Accounts Receivable $110,240; Inventories $296,950;
Allowance for Doubtful
Question 14
20. Patrick Corporation's adjusted trial balance contained the following asset accounts
at December 31, 2012: Prepaid Rent $16,220; Goodwill $59,100; Franchise Fees
Receivable
Question 15
Hawthorn Corporation's adjusted trial balance contained the following accounts at
December 31, 2012: Retained Earnings $126,760; Common Stock $700,260;
Bonds
Question 16
Keyser Beverage Company reported the following items in the most recent year.
Net income $45,190 Dividends paid 5,770 Increase in accounts receivable 10,140
Question 17
Linden Corporation is preparing its December 31, 2012, financial statements. Two
events thatoccurred between December 31, 2012, and March 10, 2013, when the
Question 18
Roder Corporation has seven industry segments with total revenues as follows.
Penley $1,827 Cheng $609 Konami 2,088 Takuhi 522 KSC 696 Molina 2,175 Red
Moon
Question 19
Operating profits and losses for the seven industry segments of Roder Corporation
are:
Penley $234 Cheng $(54)
Question 20
Which of the following events will appear in the cash flows from financing
activities section of the statement of cash flows?
Question 21
21. Heartland Company's budgeted sales and budgeted cost of goods sold for the
coming year are $146,550,000 and $35,397,000 respectively. Short-term interest
rates are expected to average 10%.
Question 22
The financial statement which summarizes operating, investing, and financing
activities of an entity for a period of time is the:
Question 23
Ames Company reported 2012 net income of $159,290. During 2012, accounts
receivable increased by $15,630 and accounts payable increased by $9,930.
Question 24
Martinez Corporation engaged in the following cash transactions during 2012.
Sale of land and building $191,970
Purchase of treasury stock 45,020
Question 25
Martinez Corporation engaged in the following cash transactions during 2012.
Sale of land and building $184,990
Purchase of treasury stock 42,320
Purchase of land 46,050
Question 26
A comparative balance sheet for Orozco Corporation is presented below.
Question 27
Chris Spear invested $11,999 today in a fund that earns 12% compounded
annually. To what amount will the investment grow in 3 years? To what amount
would the
Question 28
22. Amy Monroe wants to create a fund today that will enable her to withdraw
$30,910 per year for 8 years, with the first withdrawal to take place 4 years from
today. If the fund
Question 29
Zach Taylor is settling a $26,000 loan due today by making 6 equal annual
payments of $6025.15.
Question 30
Lyle O 'Keefe invests $30,000 at 8% annual interest, leaving the money invested
without withdrawing any of the interest for 8 years. At the end of the 8 years, Lyle
withdrew the
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