ACC 422 Believe Possibilities / snaptutorial.com

ACC 422 Entire Course
For more classes visit
www.snaptutorial.com
ACC 422 Week 1 DQ 1
ACC 422 Week 1 DQ 2
ACC 422 Week 1 DQ 3
ACC 422 Week 1 Individual Assignment Disclosure Analysis Paper (2
Papers)
ACC 422 Week 1 CPA Practice Exam
ACC 422 Week 1 Team Assignment Audited Financial Statements
(Nordstrom Inc.)
ACC 422 Week 1 Individual WileyPlus Assignment (Exercise 7-2, 7-4,
7-8, 7-9, 7-13, 7-16, 8-3, 8-13) 100% Score
ACC 422 Week 2 DQ 1
ACC 422 Week 2 DQ 2
ACC 422 Week 2 DQ 3
ACC 422 Week 2 Individual WileyPlus Assignment (Exercise 9-3, 9-12,
9-19, 10-2, 10-23, 10-24)
ACC 422 Week 2 Team Assignment Textbook Problems (P7-1, P7-2,
P8-4) 100% Score
ACC 422 Week 2 Team Assignment Financial Scavenger Hunt #1

ACC 422 Week 3 DQ 1
ACC 422 Week 3 DQ 2
ACC 422 Week 3 DQ 3
ACC 422 Week 3 Individual WileyPlus Assignment Exercise 11-6, 11-
9, 11-21, 12-1, 12-6, 12-8, 12-17
ACC 422 Week 3 Team Assignment Textbook Problems (P9-2, P9-4,
P10-3, P10-4) 100% Score
ACC 422 Week 4 DQ 1
ACC 422 Week 4 DQ 2
ACC 422 Week 4 DQ 3
ACC 422 Week 4 Team Assignment Textbook Problems (P11-1, P12-1)
100% Score
ACC 422 Week 4 Individual Wileyplus Assignment Exercise 13-1, 13-3,
13-5, 13-8, 13-11, 14-4, 14-13
(Nordstrom)
ACC 422 Week 5 DQ 1
ACC 422 Week 5 DQ 2
ACC 422 Week 5 DQ 3
ACC 422 Week 5 DQ 4

ACC 422 Week 5 Individual WileyPlus Assignment Exercise 21-2, 21-
4, 21-8 (Essay), 21-8, 21-13
ACC 422 Week 5 Team Assignment Textbook Problems (P13-10,P14-2,
P21-3) 100% Score
ACC 422 week 5 Learning Team Problem Presentation
ACC 422 Final Exam Guide 1
*****************************************
1. Kraft Enterprises owns the following assets at December 31, 2012.
Cash in bank–savings account
67,516
Checking account balance
26,445
Cash on hand
9,478

Postdated checks
753
Cash refund due from IRS
40,324
Certificates of deposit (180-day)
94,754
What amount should be reported as cash?
Question 2
Presented below is information related to Rembrandt Inc.’s inventory.
(per unit) Skis Boots
Parkas
Historical Cost 273.79 152.75
76.37
Selling Price 312.70 208.95
106.27
Cost to distribute 27.38 11.53 3.60
Current replacement cost 292.52 151.31
73.49
Normal profit margin 46.11 41.79
30.62
Determine the following:
Question 3
Matlock Company uses a perpetual inventory system. Its beginning
inventory consists of 67 units that cost $40 each. During June, the
company purchased 202 units at $40 each, returned 8 units for credit,
and sold 168 units at $67 each. Journalize the June transactions.
Question 4
Amsterdam Company uses a periodic inventory system. For April, when
the company sold 700 units, the following information is available.
Compute the April 30 inventory and the April cost of goods sold using
the average cost method.

Question 5
the FIFO method.
Question 6
(FIFO, LIFO, Average Cost Inventory)
Esplanade Company was formed on December 1, 2011. The following
information is available from Esplanade’s inventory records for Product
BAP.
Purchases Units Unit Cost
January 1, 2012(beginning inventory) 762 8.00
January 5, 2012 1,524 9.00
January 25, 2012 1,651 10.00
February 16, 2012 1,061 11.00
March 26, 2012 762 12.00
A physical inventory on March 31, 2012, shows 2,032 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2012,
under each of the following inventory methods. Assume Esplanade
Company uses the periodic inventory method.
Question 7
Floyd Corporation has the following four items in its ending inventory.
Determine the final lower of cost or market inventory value for each
item.
Question 8
Kumar Inc. uses a perpetual inventory system. At January 1, 2013,
inventory was $320,786 at both cost and market value. At December 31,
2013, the inventory was $428,714 at cost and $403,231 at market value.
Prepare the necessary December 31 entry under:
Question 9

Boyne Inc. had beginning inventory of $15,000 at cost and $25,000 at
retail. Net purchases were $150,000 at cost and $212,500 at retail. Net
markups were $12,500; net markdowns were $8,750; and sales were
$196,250. Compute ending inventory at cost using the conventional
retail method.
Question 10
(Gross Profit Method)
Astaire Company uses the gross profit method to estimate inventory for
monthly reporting purposes. Presented below is information for the
month of May.
Question 11
Previn Brothers Inc. purchased land at a price of $30,400. Closing costs
were $1,820. An old building was removed at a cost of $14,850. What
amount should be recorded as the cost of the land?
Question 12
Garcia Corporation purchased a truck by issuing an $108,000, 4-year,
zero-interest-bearing note to Equinox Inc. The market rate of interest for
obligations of this nature is 10%. Prepare the journal entry to record the
purchase of this truck.
Question 13
Mohave Inc. purchased land, building, and equipment from Laguna
Corporation for a cash payment of $352,800. The estimated fair values
of the assets are land $67,200, building $246,400, and equipment
$89,600. At what amounts should each of the three assets be recorded?
Question 14
Fielder Company obtained land by issuing 2,000 shares of its $12 par
value common stock. The land was recently appraised at $103,700. The
common stock is actively traded at $50 per share. Prepare the journal
entry to record the acquisition of the land.

Question 15
Navajo Corporation traded a used truck (cost $23,600, accumulated
depreciation $21,240) for a small computer worth $4,366. Navajo also
paid $1,180 in the transaction. Prepare the journal entry to record the
exchange.
Question 16
Mehta Company traded a used welding machine (cost $10,080,
accumulated depreciation $3,360) for office equipment with an
estimated fair value of $5,600. Mehta also paid $3,360 cash in the
transaction. Prepare the journal entry to record the exchange.
Question 17
Depreciation is normally computed on the basis of the nearest
A). full month and to the nearest dollar.
B). day and to the nearest cent.
C). day and to the nearest dollar.
D). full month and to the nearest cent.
Question 18
Fernandez Corporation purchased a truck at the beginning of 2012 for
$54,180. The truck is estimated to have a salvage value of $2,580 and a
useful life of 206,400 miles. It was driven 29,670 miles in 2012 and
39,990 miles in 2013. Compute depreciation expense for 2012 and 2013.
Question 19
Lockhard Company purchased machinery on January 1, 2012, for
$79,200. The machinery is estimated to have a salvage value of $7,920
after a useful life of 8 years.
(a) Compute 2012 depreciation expense using the double-declining
balance method.
(b) Compute 2012 depreciation expense using the double-declining
balance method assuming the machinery was purchased on October 1,
2012.

Question 20
Jurassic Company owns machinery that cost $1,145,700 and has
accumulated depreciation of $458,280. The expected future net cash
flows from the use of the asset are expected to be $636,500. The fair
value of the equipment is $509,200. Prepare the journal entry, if any, to
record the impairment loss.
Question 21
Everly Corporation acquires a coal mine at a cost of $501,600.
Intangible development costs total $125,400. After extraction has
occurred, Everly must restore the property (estimated fair value of the
obligation is $100,320), after which it can be sold for $200,640. Everly
estimates that 5,016 tons of coal can be extracted. If 878 tons are
extracted the first year, prepare the journal entry to record depletion.
Question 22
Francis Corporation purchased an asset at a cost of $58,200 on March 1,
2012. The asset has a useful life of 8 years and a salvage value of
$5,820. For tax purposes, the MACRS class life is 5 years. Compute tax
depreciation for each year 2012–2017.
Question 23
Celine Dion Corporation purchases a patent from Salmon Company on
January 1, 2012, for $50,820. The patent has a remaining legal life of 16
years. Celine Dion feels the patent will be useful for 10 years. Prepare
Celine Dion’s journal entries to record the purchase of the patent and
2012 amortization.
Question 24
Karen Austin Corporation has capitalized software costs of $768,500,
and sales of this product the first year totaled $390,630. Karen Austin
anticipates earning $911,470 in additional future revenues from this
product, which is estimated to have an economic life of 4 years.
Compute the amount of software cost amortization for the first year.

(a) Compute the amount of software cost amortization for the first year
using the percent of revenue approach.
(b) Compute the amount of software cost amortization for the first year
using the straight-line approach.
Question 25
Jeff Beck is a farmer who owns land which borders on the right-of-way
of the Northern Railroad. On August 10, 2012, due to the admitted
negligence of the Railroad, hay on the farm was set on fire and burned.
Beck had had a dispute with the Railroad for several years concerning
the ownership of a small parcel of land. The representative of the
Railroad has offered to assign any rights which the Railroad may have in
the land to Beck in exchange for a release of his right to reimbursement
for the loss he has sustained from the fire. Beck appears inclined to
accept the Railroad’s offer. The Railroad’s 2012 financial statements
should include the following related to the incident:
A). recognition of a loss only.
B). creation of a liability only.
C). disclosure in note form only.
D). recognition of a loss and creation of a liability for the value of the
land.
Question 26
Roley Corporation uses a periodic inventory system and the gross
method of accounting for purchase discounts. On July 1, Roley
purchased $66,000 of inventory, terms 2/10, n/30, FOB shipping point.
Roley paid freight costs of $1,210. On July 3, Roley returned damaged
goods and received credit of $6,600. On July 10, Roley paid for the
goods. Prepare all necessary journal entries for Roley.
Question 27
Takemoto Corporation borrowed $93,000 on November 1, 2012, by
signing a $95,093, 3-month, zero-interest-bearing note. Prepare
Takemoto’s November 1, 2012, entry; the December 31, 2012, annual
adjusting entry; and the February 1, 2013, entry. (For multiple

debit/credit en tries, list amounts from largest to smallest, e.g. 10, 8, 6.
Round all answers to 0 decimal places, e.g. 11,150.)
Question 28
Whiteside Corporation issues $629,000 of 9% bonds, due in 14 years,
with interest payable semiannually. At the time of issue, the annual
market rate for such bonds is 10%. Compute the issue price of the bonds.
(Use the present value tables in the text.
Question 29
Indiana Jones Company enters into a 6-year lease of equipment on
January 1, 2012, which requires 6 annual payments of $37,560 each,
beginning January 1, 2012. In addition, the lessee guarantees a residual
value of $20,870 at lease-end. The equipment has a useful life of 6
years. Assume that for Lost Ark Company, the lessor, collectibility is
reasonably predictable, there are no important uncertainties concerning
costs, and the carrying amount of the machinery is $191,722. Prepare
Lost Ark’s January 1, 2012, journal entries.
Question 30
On January 1, 2012, Irwin Animation sold a truck to Peete Finance for
$26,050 and immediately leased it back. The truck was carried on
Irwin’s books at $20,800. The term of the lease is 5 years, and title
transfers to Irwin at lease-end. The lease requires five equal rental
payments of $7,048 at the end of each year. The appropriate rate of
interest is 11%, and the truck has a useful life of 5 years with no salvage
value. Prepare Irwin’s 2012 journal entries.
*****************************************

SET 2
1) Which of the following is considered cash?
2) Bank overdrafts, if material, should be
3) Which of the following is NOT considered cash for financial
reporting purposes?
4) If a company employs the gross method of recording accounts
receivable from customers, then sales discounts taken should be reported
as
5) Which of the following methods of determining annual bad debt
expense best achieves the matching concept?
6) The advantage of relating a company's bad debt expense to its
outstanding accounts receivable is that this approach
7) The failure to record a purchase of mer¬chandise on account even
though the goods are properly included in the physical inven¬tory
results in
8) Belle Co. received merchandise on consignment. As of March 31,
Belle had recorded the transaction as a purchase and included the goods
in inventory. The effect of this on its financial statements for March 31
9) Eller Co. received merchandise on consignment. As of January 31,
Eller included the goods in inventory, but did NOT record the
transaction. The effect of this on its financial statements for January 31
10) The use of a Purchase Discounts account implies that the recorded
cost of a purchased inventory item is its
11) Which method of inventory pricing best approximates specific
identification of the actual flow of costs and units in most manufacturing
situations?
12) When using the periodic inventory system, which of the following
generally would NOT be separately accounted for in the computation of
cost of goods sold?

13) An item of inventory purchased this period for $15.00 has been
incorrectly written down to its current replacement cost of $10.00. It
sells during the following period for $30.00, its normal selling price,
with disposal costs of $3.00 and normal profit of $12.00. Which of the
following statements is NOT true?
14) Designated market value
15) In no case can "market" in the lower-of-cost-or-market rule be more
than
16) A major advantage of the retail inventory method is that it
17) The gross profit method of inventory valuation is invalid when
18) The retail inventory method is based on the assumption that the
19) Which of the following is NOT a major characteristic of a plant
asset?
20) Cotton Hotel Corporation recently purchased Holiday Hotel and the
land on which it is located with the plan to tear down the Holiday Hotel
and build a new luxury hotel on the site. The cost of the Holiday Hotel
should be
21) If a corporation purchases a lot and building and subsequently tears
down the building and uses the property as a parking lot, the proper
accounting treatment of the cost of the building would depend on
22) The period of time during which interest must be capitalized ends
when
23) To be consistent with the historical cost principle, overhead costs
incurred by an enterprise constructing its own building should be
24) When computing the amount of interest cost to be capitalized, the
concept of "avoidable interest" refers to
25) The King-Kong Corporation exchanges one plant asset for a similar
plant asset and gives cash in the exchange. The exchange is NOT
expected to cause a material change in the future cash flows for either
entity. If a gain on the disposal of the old asset is indicated, the gain will
26) When funds are borrowed to pay for construction of assets that
qualify for capitalization of interest, the excess funds NOT needed to
pay for construction may be temporarily invested in interest-bearing
securities. Interest earned on these temporary investments should be

27) Which of the following is NOT a condition that must be satisfied
before interest capitalization can begin on a qualifying asset?
28) Which of the following most accurately reflects the concept of
depreciation as used in accounting?
29) Which of the following principles best describes the conceptual
rationale for the methods of matching depreciation expense with
revenues?
30) The major difference between the service life of an asset and its
physical life is that
31) Starr Company purchased a depreciable asset for $150,000. The
estimated salvage value is $10,000, and the estimated useful life is 8
years. The double-declining balance method will be used for
depreciation. What is the depreciation expense for the second year on
this asset?
32) Bigbie Company purchased a depreciable asset for $600,000. The
estimated salvage value is $30,000, and the estimated useful life is
10,000 hours. Bigbie used the asset for 1,100 hours in the current year.
The activity method will be used for depreciation. What is the
depreciation expense on this asset?
33) Harrison Company purchased a depreciable asset for $100,000. The
years. The straight-line method will be used for depreciation. What is the
depreciation base of this asset?
34) Costs incurred internally to create intangibles are
35) The cost of purchasing patent rights for a product that might
otherwise have seriously competed with one of the purchaser's patented
products should be
36) Riser Corporation was granted a patent on a product on January 1,
1998. To protect its patent, the corporation purchased on January 1,
2007 a patent on a competing product which was originally issued on
January 10, 2003. Because of its unique plant, Riser Corporation does
NOT feel the competing patent can be used in producing a product. The
cost of the competing patent should be
37) Twilight Corporation acquired End-of-the-World Products on
January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as a

result of that purchase. At December 31, 2008, the End-of-the-World
Products Division had a fair value of $1,700,000. The net identifiable
assets of the Division (excluding goodwill) had a fair value of
$1,450,000 at that time. What amount of loss on impairment of goodwill
should Twilight record in 2008?
38) Fleming Corporation acquired Out-of-Sight Products on January 1,
2008 for $4,000,000, and recorded goodwill of $750,000 as a result of
that purchase. At December 31, 2008, the Out-of-Sight Products
Division had a fair value of $3,400,000. The net identifiable assets of the
Division (excluding goodwill) had a fair value of $2,900,000 at that
time. What amount of loss on impairment of goodwill should Fleming
record in 2008?
39) Malrom Manufacturing Company acquired a patent on a
manufacturing process on January 1, 2006 for $10,000,000. It was
expected to have a 10 year life and no residual value. Malrom uses
straight-line amortization for patents. On December 31, 2007, the
expected future cash flows expected from the patent were expected to be
$800,000 per year for the next eight years. The present value of these
cash flows, discounted at Malrom’s market interest rate, is $4,800,000.
At what amount should the patent be carried on the December 31, 2007
balance sheet?
40) Goodwill
41) Easton Company and Lofton Company were combined in a purchase
transaction. Easton was able to acquire Lofton at a bargain price. The
sum of the market or appraised values of identifiable assets acquired less
the fair value of liabilities assumed exceeded the cost to Easton. After
revaluing noncurrent assets to zero, there was still some "negative
goodwill." Proper accounting treatment by Easton is to report the
amount as
42) The reason goodwill is sometimes referred to as a master valuation
account is because
43) Which of the following items is a current liability?
44) Which of the following statements is false?
45) Stock dividends distributable should be classified on the

46) Simson Company has 35 employees who work 8-hour days and are
paid hourly. On January 1, 2006 the company began a program of
granting its employees 10 days of paid vacation each year. Vacation
days earned in 2006 may first be taken on January 1, 2007. Information
relative to these employees is as follows:
Year Hourly Wages Vacation Days Earned by Each Employee Vacation
Dayse Used by Each Employee
2006 $28.50 10 0
2007 $27.00 10 8
2008 $28.50 10 10
What is the amount of expense relative to compensated absences that
should be reported on Simson’s income statement for 2006?
47) A company buys an oil rig for $1,000,000 on January 1, 2007. The
life of the rig is 10 years and the expected cost to dismantle the rig at the
end of 10 years is $200,000 (present value at 10% is $77,110). 10% is an
appropriate interest rate for this company. What expense should be
recorded for 2007 as a result of these events?
48) A company offers a cash rebate of $1 on each $4 package of
batteries sold during 2007. Historically, 10% of customers mail in the
rebate form. During 2007, 6,000,000 packages of batteries are sold, and
210,000 $1 rebates are mailed to customers. What is the rebate expense
and liability, respectively, shown on the 2007 financial statements dated
December 31?
49) A contingency can be accrued when
50) Which of the following sets of conditions would give rise to the
accrual of a contingency under current generally accepted accounting
principles?
51) Mark Ward is a farmer who owns land which borders on the right-
of-way of the Northern Railroad. On August 10, 2007, due to the
admitted negligence of the Railroad, hay on the farm was set on fire and
burned. Ward had had a dispute with the Railroad for several years
concerning the ownership of a small parcel of land. The representative
of the Railroad has offered to assign any rights which the Railroad may
have in the land to Ward in exchange for a release of his right to
reimbursement for the loss he has sustained from the fire. Ward appears

inclined to accept the Railroad's offer. The Railroad's 2007 financial
statements should include the following related to the incident:
52) An example of an item which is NOT a liability is
53) The covenants and other terms of the agreement between the issuer
of bonds and the lender are set forth in the
54) Bonds for which the owners' names are NOT registered with the
issuing corporation are called
55) Minimum lease payments may include a
56) What impact does a bargain purchase option have on the present
value of the minimum lease payments computed by the lessee?
57) Which of the following is a correct statement of one of the
capitalization criteria?
58) In order to properly record a direct-financing lease, the lessor needs
to know how to calculate the lease receivable. The lease receivable in a
direct-financing lease is best defined as
59) In the earlier years of a lease, from the lessee's perspective, the use
of the
60) In a lease that is appropriately recorded as a direct-financing lease
by the lessor, unearned income
*****************************************
SET 3

reporting purposes?
2) What is the preferable presentation of accounts receivable from
officers, employees, or affiliated companies on a balance sheet?
3) Which of the following items should NOT be included in the Cash
caption on the balance sheet?
5) Which of the following is a generally accepted method of determining
the amount of the adjustment to bad debt expense?
6) Assuming that the ideal measure of short-term receivables in the
balance sheet is the discounted value of the cash to be received in the
future, failure to follow this practice usually does NOT make the balance
sheet misleading because
would be
8) If the beginning inventory for 2006 is overstated, the effects of this
error on cost of goods sold for 2006, net income for 2006, and assets at
December 31, 2007, respectively, are
9) The accountant for the Orion Sales Company is preparing the income
statement for 2007 and the balance sheet at December 31, 2007. Orion
uses the periodic inventory system. The January 1, 2007 merchandise
inventory balance will appear
10) The use of a Discounts Lost account implies that the recorded cost of
a purchased inventory item is its
cost of goods sold?
than
14) When the direct method is used to record inventory at market

17) In 2006, Lucas Manufacturing signed a contract with a supplier to
purchase raw materials in 2007 for $700,000. Before the December 31,
2006 balance sheet date, the market price for these materials dropped to
$510,000. The journal entry to record this situation at December 31,
2006 will result in a credit that should be reported
asset?
20) The cost of land does NOT include
when
25) Construction of a qualifying asset is started on April 1 and finished
on December 1. The fraction used to multiply an expenditure made on
April 1 to find weighted-average accumulated expenditures is
27) When a plant asset is acquired by issuance of common stock, the
cost of the plant asset is properly measured by the
28) If an industrial firm uses the units-of-production method for
computing depreciation on its only plant asset, factory machinery, the
credit to accumulated depreciation from period to period during the life
of the firm will
29) The term "depreciable cost," or "depreciable base," as it is used in
accounting, refers to

31) Prentice Company purchased a depreciable asset for $200,000. The
32) Pine Company purchased a depreciable asset for $360,000. The
this asset?
products should be
36) Which of the following methods of amortization is normally used for
intangible assets?
37) General Products Company bought Special Products Division in
2006 and appropriately booked $250,000 of goodwill related to the
purchase. On December 31, 2007, the fair value of Special Products
Division is $2,000,000 and it is carried on General Product’s books for a
total of $1,700,000, including the goodwill. An analysis of Special
Products Division’s assets indicates that goodwill of $200,000 exists on
December 31, 2007. What goodwill impairment should be recognized by
General Products in 2007?

record in 2008?
40) When a patent is amortized, the credit is usually made to
account is because
amount as

December 31?
48) A company offers a cash rebate of $1 on each $4 package of light
bulbs sold during 2007. Historically, 10% of customers mail in the
rebate form. During 2007, 4,000,000 packages of light bulbs are sold,
and 140,000 $1 rebates are mailed to customers. What is the rebate
expense and liability, respectively, shown on the 2007 financial
statements dated December 31?
principles?
52) If bonds are issued initially at a premium and the effective-interest
method of amortization is used, interest expense in the earlier years will
be

56) Which of the following best describes current practice in accounting
for leases?
57) While only certain leases are currently accounted for as a sale or
purchase, there is theoretic justification for considering all leases to be
sales or purchases. The principal reason that supports this idea is that
58) The amount to be recorded as the cost of an asset under capital lease
is equal to the
of the
60) If the residual value of a leased asset is guaranteed by a third party
*****************************************
ACC 422 Final Exam Guide All 3 Sets
Details of All 180 Questions Given Below
SET 1
1. Kraft Enterprises owns the following assets at December 31, 2012.
Cash in bank–savings account 67,516 Checking account
balance 26,445
Cash on hand 9,478 Postdated checks 753
Cash refund due from IRS 40,324 Certificates of
deposit (180-day) 94,754
What amount should be reported as cash?
Question 2

Presented below is information related to Rembrandt Inc.’s inventory.
(per unit) Skis Boots
Parkas
Historical Cost 273.79 152.75
76.37
Selling Price 312.70 208.95
106.27
Cost to distribute 27.38 11.53 3.60
Current replacement cost 292.52 151.31
73.49
Normal profit margin 46.11 41.79
30.62
Determine the following:
Question 3
Matlock Company uses a perpetual inventory system. Its beginning
inventory consists of 67 units that cost $40 each. During June, the
company purchased 202 units at $40 each, returned 8 units for credit,
and sold 168 units at $67 each. Journalize the June transactions.
Question 4
the average cost method.
Question 5
the FIFO method.
Question 6
(FIFO, LIFO, Average Cost Inventory)

Esplanade Company was formed on December 1, 2011. The following
information is available from Esplanade’s inventory records for Product
BAP.
Purchases Units Unit Cost
January 1, 2012(beginning inventory) 762 8.00
January 5, 2012 1,524 9.00
January 25, 2012 1,651 10.00
February 16, 2012 1,061 11.00
March 26, 2012 762 12.00
A physical inventory on March 31, 2012, shows 2,032 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2012,
under each of the following inventory methods. Assume Esplanade
Company uses the periodic inventory method.
Question 7
Floyd Corporation has the following four items in its ending inventory.
Determine the final lower of cost or market inventory value for each
item.
Question 8
Kumar Inc. uses a perpetual inventory system. At January 1, 2013,
inventory was $320,786 at both cost and market value. At December 31,
2013, the inventory was $428,714 at cost and $403,231 at market value.
Prepare the necessary December 31 entry under:
Question 9
Boyne Inc. had beginning inventory of $15,000 at cost and $25,000 at
retail. Net purchases were $150,000 at cost and $212,500 at retail. Net
markups were $12,500; net markdowns were $8,750; and sales were
$196,250. Compute ending inventory at cost using the conventional
retail method.
Question 10
(Gross Profit Method)

Astaire Company uses the gross profit method to estimate inventory for
monthly reporting purposes. Presented below is information for the
month of May.
Question 11
Previn Brothers Inc. purchased land at a price of $30,400. Closing costs
were $1,820. An old building was removed at a cost of $14,850. What
amount should be recorded as the cost of the land?
Question 12
Garcia Corporation purchased a truck by issuing an $108,000, 4-year,
zero-interest-bearing note to Equinox Inc. The market rate of interest for
obligations of this nature is 10%. Prepare the journal entry to record the
purchase of this truck.
Question 13
Mohave Inc. purchased land, building, and equipment from Laguna
Corporation for a cash payment of $352,800. The estimated fair values
of the assets are land $67,200, building $246,400, and equipment
$89,600. At what amounts should each of the three assets be recorded?
Question 14
Fielder Company obtained land by issuing 2,000 shares of its $12 par
value common stock. The land was recently appraised at $103,700. The
common stock is actively traded at $50 per share. Prepare the journal
entry to record the acquisition of the land.
Question 15
Navajo Corporation traded a used truck (cost $23,600, accumulated
depreciation $21,240) for a small computer worth $4,366. Navajo also
paid $1,180 in the transaction. Prepare the journal entry to record the
exchange.
Question 16

Mehta Company traded a used welding machine (cost $10,080,
accumulated depreciation $3,360) for office equipment with an
estimated fair value of $5,600. Mehta also paid $3,360 cash in the
transaction. Prepare the journal entry to record the exchange.
Question 17
Depreciation is normally computed on the basis of the nearest
A). full month and to the nearest dollar.
B). day and to the nearest cent.
C). day and to the nearest dollar.
D). full month and to the nearest cent.
Question 18
Fernandez Corporation purchased a truck at the beginning of 2012 for
$54,180. The truck is estimated to have a salvage value of $2,580 and a
useful life of 206,400 miles. It was driven 29,670 miles in 2012 and
39,990 miles in 2013. Compute depreciation expense for 2012 and 2013.
Question 19
Lockhard Company purchased machinery on January 1, 2012, for
$79,200. The machinery is estimated to have a salvage value of $7,920
after a useful life of 8 years.
(a) Compute 2012 depreciation expense using the double-declining
balance method.
(b) Compute 2012 depreciation expense using the double-declining
balance method assuming the machinery was purchased on October 1,
2012.
Question 20
Jurassic Company owns machinery that cost $1,145,700 and has
accumulated depreciation of $458,280. The expected future net cash
flows from the use of the asset are expected to be $636,500. The fair
value of the equipment is $509,200. Prepare the journal entry, if any, to
record the impairment loss.

Question 21
Everly Corporation acquires a coal mine at a cost of $501,600.
Intangible development costs total $125,400. After extraction has
occurred, Everly must restore the property (estimated fair value of the
obligation is $100,320), after which it can be sold for $200,640. Everly
estimates that 5,016 tons of coal can be extracted. If 878 tons are
extracted the first year, prepare the journal entry to record depletion.
Question 22
Francis Corporation purchased an asset at a cost of $58,200 on March 1,
2012. The asset has a useful life of 8 years and a salvage value of
$5,820. For tax purposes, the MACRS class life is 5 years. Compute tax
depreciation for each year 2012–2017.
Question 23
Celine Dion Corporation purchases a patent from Salmon Company on
January 1, 2012, for $50,820. The patent has a remaining legal life of 16
years. Celine Dion feels the patent will be useful for 10 years. Prepare
Celine Dion’s journal entries to record the purchase of the patent and
2012 amortization.
Question 24
Karen Austin Corporation has capitalized software costs of $768,500,
and sales of this product the first year totaled $390,630. Karen Austin
anticipates earning $911,470 in additional future revenues from this
product, which is estimated to have an economic life of 4 years.
Compute the amount of software cost amortization for the first year.
(a) Compute the amount of software cost amortization for the first year
using the percent of revenue approach.
(b) Compute the amount of software cost amortization for the first year
using the straight-line approach.
Question 25
Jeff Beck is a farmer who owns land which borders on the right-of-way
of the Northern Railroad. On August 10, 2012, due to the admitted

negligence of the Railroad, hay on the farm was set on fire and burned.
Beck had had a dispute with the Railroad for several years concerning
the ownership of a small parcel of land. The representative of the
Railroad has offered to assign any rights which the Railroad may have in
the land to Beck in exchange for a release of his right to reimbursement
for the loss he has sustained from the fire. Beck appears inclined to
accept the Railroad’s offer. The Railroad’s 2012 financial statements
should include the following related to the incident:
A). recognition of a loss only.
B). creation of a liability only.
C). disclosure in note form only.
D). recognition of a loss and creation of a liability for the value of the
land.
Question 26
Roley Corporation uses a periodic inventory system and the gross
method of accounting for purchase discounts. On July 1, Roley
purchased $66,000 of inventory, terms 2/10, n/30, FOB shipping point.
Roley paid freight costs of $1,210. On July 3, Roley returned damaged
goods and received credit of $6,600. On July 10, Roley paid for the
goods. Prepare all necessary journal entries for Roley.
Question 27
Takemoto Corporation borrowed $93,000 on November 1, 2012, by
signing a $95,093, 3-month, zero-interest-bearing note. Prepare
Takemoto’s November 1, 2012, entry; the December 31, 2012, annual
adjusting entry; and the February 1, 2013, entry. (For multiple
debit/credit en tries, list amounts from largest to smallest, e.g. 10, 8, 6.
Round all answers to 0 decimal places, e.g. 11,150.)
Question 28
Whiteside Corporation issues $629,000 of 9% bonds, due in 14 years,
with interest payable semiannually. At the time of issue, the annual
market rate for such bonds is 10%. Compute the issue price of the bonds.
(Use the present value tables in the text.

Question 29
Indiana Jones Company enters into a 6-year lease of equipment on
January 1, 2012, which requires 6 annual payments of $37,560 each,
beginning January 1, 2012. In addition, the lessee guarantees a residual
value of $20,870 at lease-end. The equipment has a useful life of 6
years. Assume that for Lost Ark Company, the lessor, collectibility is
reasonably predictable, there are no important uncertainties concerning
costs, and the carrying amount of the machinery is $191,722. Prepare
Lost Ark’s January 1, 2012, journal entries.
Question 30
On January 1, 2012, Irwin Animation sold a truck to Peete Finance for
$26,050 and immediately leased it back. The truck was carried on
Irwin’s books at $20,800. The term of the lease is 5 years, and title
transfers to Irwin at lease-end. The lease requires five equal rental
payments of $7,048 at the end of each year. The appropriate rate of
interest is 11%, and the truck has a useful life of 5 years with no salvage
value. Prepare Irwin’s 2012 journal entries.
SET 2
1) Which of the following is considered cash?
2) Bank overdrafts, if material, should be
reporting purposes?
4) If a company employs the gross method of recording accounts
receivable from customers, then sales discounts taken should be reported
as
5) Which of the following methods of determining annual bad debt
expense best achieves the matching concept?

7) The failure to record a purchase of mer¬chandise on account even
though the goods are properly included in the physical inven¬tory
results in
8) Belle Co. received merchandise on consignment. As of March 31,
Belle had recorded the transaction as a purchase and included the goods
in inventory. The effect of this on its financial statements for March 31
11) Which method of inventory pricing best approximates specific
identification of the actual flow of costs and units in most manufacturing
situations?
cost of goods sold?
13) An item of inventory purchased this period for $15.00 has been
incorrectly written down to its current replacement cost of $10.00. It
sells during the following period for $30.00, its normal selling price,
with disposal costs of $3.00 and normal profit of $12.00. Which of the
following statements is NOT true?
than
16) A major advantage of the retail inventory method is that it
asset?
20) Cotton Hotel Corporation recently purchased Holiday Hotel and the
land on which it is located with the plan to tear down the Holiday Hotel
and build a new luxury hotel on the site. The cost of the Holiday Hotel
should be

when
25) The King-Kong Corporation exchanges one plant asset for a similar
plant asset and gives cash in the exchange. The exchange is NOT
expected to cause a material change in the future cash flows for either
entity. If a gain on the disposal of the old asset is indicated, the gain will
27) Which of the following is NOT a condition that must be satisfied
before interest capitalization can begin on a qualifying asset?
29) Which of the following principles best describes the conceptual
rationale for the methods of matching depreciation expense with
revenues?
30) The major difference between the service life of an asset and its
physical life is that
31) Starr Company purchased a depreciable asset for $150,000. The
this asset?

33) Harrison Company purchased a depreciable asset for $100,000. The
34) Costs incurred internally to create intangibles are
products should be
record in 2008?
39) Malrom Manufacturing Company acquired a patent on a
manufacturing process on January 1, 2006 for $10,000,000. It was
expected to have a 10 year life and no residual value. Malrom uses
straight-line amortization for patents. On December 31, 2007, the
expected future cash flows expected from the patent were expected to be

$800,000 per year for the next eight years. The present value of these
cash flows, discounted at Malrom’s market interest rate, is $4,800,000.
At what amount should the patent be carried on the December 31, 2007
balance sheet?
40) Goodwill
amount as
account is because
Year Hourly Wages Vacation Days Earned by Each Employee Vacation
Dayse Used by Each Employee
2006 $28.50 10 0
2007 $27.00 10 8
2008 $28.50 10 10
47) A company buys an oil rig for $1,000,000 on January 1, 2007. The
life of the rig is 10 years and the expected cost to dismantle the rig at the
end of 10 years is $200,000 (present value at 10% is $77,110). 10% is an
appropriate interest rate for this company. What expense should be
recorded for 2007 as a result of these events?

December 31?
principles?
54) Bonds for which the owners' names are NOT registered with the
issuing corporation are called
55) Minimum lease payments may include a
56) What impact does a bargain purchase option have on the present
value of the minimum lease payments computed by the lessee?
58) In order to properly record a direct-financing lease, the lessor needs
to know how to calculate the lease receivable. The lease receivable in a
direct-financing lease is best defined as
of the

60) In a lease that is appropriately recorded as a direct-financing lease
by the lessor, unearned income
SET 3
reporting purposes?
2) What is the preferable presentation of accounts receivable from
officers, employees, or affiliated companies on a balance sheet?
3) Which of the following items should NOT be included in the Cash
caption on the balance sheet?
5) Which of the following is a generally accepted method of determining
the amount of the adjustment to bad debt expense?
6) Assuming that the ideal measure of short-term receivables in the
balance sheet is the discounted value of the cash to be received in the
future, failure to follow this practice usually does NOT make the balance
sheet misleading because
would be
8) If the beginning inventory for 2006 is overstated, the effects of this
error on cost of goods sold for 2006, net income for 2006, and assets at
December 31, 2007, respectively, are
9) The accountant for the Orion Sales Company is preparing the income
statement for 2007 and the balance sheet at December 31, 2007. Orion
uses the periodic inventory system. The January 1, 2007 merchandise
inventory balance will appear
10) The use of a Discounts Lost account implies that the recorded cost of
a purchased inventory item is its

cost of goods sold?
than
14) When the direct method is used to record inventory at market
17) In 2006, Lucas Manufacturing signed a contract with a supplier to
purchase raw materials in 2007 for $700,000. Before the December 31,
2006 balance sheet date, the market price for these materials dropped to
$510,000. The journal entry to record this situation at December 31,
2006 will result in a credit that should be reported
asset?
20) The cost of land does NOT include
when
25) Construction of a qualifying asset is started on April 1 and finished
on December 1. The fraction used to multiply an expenditure made on
April 1 to find weighted-average accumulated expenditures is

27) When a plant asset is acquired by issuance of common stock, the
cost of the plant asset is properly measured by the
28) If an industrial firm uses the units-of-production method for
computing depreciation on its only plant asset, factory machinery, the
credit to accumulated depreciation from period to period during the life
of the firm will
29) The term "depreciable cost," or "depreciable base," as it is used in
accounting, refers to
31) Prentice Company purchased a depreciable asset for $200,000. The
32) Pine Company purchased a depreciable asset for $360,000. The
this asset?
products should be
36) Which of the following methods of amortization is normally used for
intangible assets?

37) General Products Company bought Special Products Division in
2006 and appropriately booked $250,000 of goodwill related to the
purchase. On December 31, 2007, the fair value of Special Products
Division is $2,000,000 and it is carried on General Product’s books for a
total of $1,700,000, including the goodwill. An analysis of Special
Products Division’s assets indicates that goodwill of $200,000 exists on
December 31, 2007. What goodwill impairment should be recognized by
General Products in 2007?
record in 2008?
40) When a patent is amortized, the credit is usually made to
account is because
amount as

December 31?
48) A company offers a cash rebate of $1 on each $4 package of light
bulbs sold during 2007. Historically, 10% of customers mail in the
rebate form. During 2007, 4,000,000 packages of light bulbs are sold,
and 140,000 $1 rebates are mailed to customers. What is the rebate
expense and liability, respectively, shown on the 2007 financial
statements dated December 31?
principles?

52) If bonds are issued initially at a premium and the effective-interest
method of amortization is used, interest expense in the earlier years will
be
56) Which of the following best describes current practice in accounting
for leases?
57) While only certain leases are currently accounted for as a sale or
purchase, there is theoretic justification for considering all leases to be
sales or purchases. The principal reason that supports this idea is that
58) The amount to be recorded as the cost of an asset under capital lease
is equal to the
of the
60) If the residual value of a leased asset is guaranteed by a third party
*****************************************
1. What amount should Herc report as inventory in its December 31,
2005, balance sheet?
2. What dollar-value LIFO inventory cost would be reported in Cobb's
December 31, 2006, balance sheet?

3. Garson Co. recorded goods in transit purchased FOB shipping point at
year-end as purchases. The goods were excluded from the ending
inventory. What effect does the omission have on Garson's assets and
retained earnings at year end?
4. In accordance with ASC Topic 255, the Consumer Price Index for All
Urban Consumers is used to compute information on a
5. If current assets exceed current liabilities, payments to creditors made
on the last day of the month will
6. At the end of its first year of operations, December 31, year 1,
Wonder Company had a net realizable value of accounts receivable of
$500,000. During year 1 Wonder recorded charges to bad debt expense
of $80,000 and wrote off as uncollectible accounts receivable of
$20,000. What should Wonder report on its balance sheet at December
31, year 1, as accounts receivable before the allowance for doubtful
accounts?
7. A company is in its first year of operations and has never written off
any accounts receivable as uncollectible. When the allowance method of
recognizing bad debt expense is used, the entry to recognize that
expense
8. When the allowance method of recognizing bad debt expense is used,
the allowance for doubtful accounts would decrease when a(n)
9. In accordance with ASC Topic 860, Transfers and Servicing, all of the
following would be disclosed except for
10. The premium on a 3-year insurance policy expiring on December 31,
year 3, was paid in total on January 2, year 1. If the company has a 6-
month operating cycle, then on December 31, year 1, the prepaid
insurance reported as a current asset would be for

11. Foster Co. adjusted its allowance for uncollectible accounts at year-
end. The general ledger balances for the accounts receivable and the
related allowance account were $1,000,000 and $40,000, respectively.
Foster uses the percentage-of-receivables method to estimate its
allowance for uncollectible accounts. Accounts receivable were
estimated to be 5% uncollectible. What amount should Foster record as
an adjustment to its allowance for uncollectible accounts at year-end?
12. A retailer failed to record a purchase of inventory on credit near the
end of the current year. The goods did arrive and were included in the
inventory count. The purchase will be recorded next year, when the
goods are paid for. As a result,
13. What is the current ratio as of December 31?
14. What was Brock's dollar-value LIFO inventory on December 31,
2004?
15. In its 2005 income statement, what amount should Kam report as
the cost of goods sold?
16. When the accounts receivable of a company are sold outright to a
company which normally buys accounts receivable of other companies
without recourse, the accounts receivable have been
Pledged.
17. What was the price index used to compute Bach's 2007 dollar-value
LIFO inventory layer?

18. Drew Co. uses the average cost inventory method for internal
reporting purposes and LIFO for financial statement and income tax
reporting.
19. What adjusting entry should Drew record to adjust from average cost
to LIFO on December 31, 2005?
20. When the FIFO inventory method is used during periods of rising
prices, a perpetual inventory system results in an ending inventory cost
that is
21. Nomar Co. shipped inventory on consignment to Seabright Co. that
cost $20,000. Seabright paid $500 for advertising that was reimbursable
from Nomar. At the end of the year, 70% of the inventory was sold for
$30,000. The agreement states that a commission of 20% will be
provided to Seabright for all sales. What amount of net inventory on
consignment remains on the balance sheet for the first year for Nomar?
22. When an inventory overstatement in year one counterbalances in
year two, this means:
23. If ending inventory for 20x5 is understated because certain items
were missed in the count, then:
24. The following bank reconciliation is presented for the Kingston
Company for the month of November year 1:
25. Data for the month of December year 1 per bank follows:

26. All items that were outstanding as of November 30, cleared through
the bank in December, including the bank credit. In addition, $2,500 in
checks were outstanding as of December 31, year 1. What is the balance
of cash per books at December 31, year 1?
27. Lind Corp. declared a cash dividend of $50,000 on March 10, year 2,
to stockholders of record March 25, year 2, payable on April 5, year 2.
As a result of this cash dividend, working capital
28. The controller of Peabody, Inc. has been asked to present an analysis
of accounts receivable collections at the upcoming staff meeting. The
following information is used:
29. What is the receivables turnover ratio as of December 31, year 2?
30. All but one of the following are required before a transfer of
receivables can be recorded as a sale.
31.Alfisol, Inc. offers sales discounts of 2% on all credit sales paid
within 15 days. For year 1, gross credit sales totaled $150,000 and 75%
of Alfisol’s customers took advantage of the discount. Under the net
method
32. The following information is available from Timber Corp’s financial
records for year 1:

33. How many times did Timber’s accounts receivable turn over in year
1?
*****************************************
ACC 422 Week 1 DQ 1
Week 1 – DQ 1
Consider how an organization must manage cash, receivables, and
inventory. Which of the three variables is the most important to manage?
Is one more susceptible to fraud and errors than the others? Explain your
answer.
How would a misstatement in each affect the organization?
*****************************************
ACC 422 Week 1 DQ 2

Week 1 – DQ 2
What is the perpetual method of tracking inventory?
How does it differ from the periodic method of tracking inventory?
Why would a company choose one method over the other method?
Which is the best method? Why?
*****************************************
ACC 422 Week 1 DQ 3
Week 1 – DQ 3
What are the different ways to estimate bad debt?
How does this affect net income?
What does Generally Accepted Accounting Principles (GAAP) require?
Why?
Should all companies have bad debt? Explain your answer.
*****************************************
ACC 422 Week 1 Individual Assignment
Disclosure Analysis Paper (2 Papers)

This Tutorial contains 2 Papers
Resource: Internet
Select a publicly held company to use as the basis for this assignment.
Research your selected company and acquire the company’s most recent
financial statements using the Internet.
Prepare a 700- to 1,050-word paper analyzing the disclosures contained
within the notes to the financial statements related to cash and cash
equivalents, receivables, and inventories. Include a list identifying the
components of the organization’s cash and cash equivalents.
Format your paper consistent with APA guidelines..
*****************************************
ACC 422 Week 1 Individual Assignment
Disclosure Analysis Paper

Resource: Internet
Select a publicly held company to use as the basis for this assignment.
Research your selected company and acquire the company’s most recent
financial statements using the Internet.
Prepare a 700- to 1,050-word paper analyzing the disclosures contained
within the notes to the financial statements related to cash and cash
equivalents, receivables, and inventories. Include a list identifying the
components of the organization’s cash and cash equivalents.
Format your paper consistent with APA guidelines.
*****************************************
ACC 422 Week 1 Individual WileyPlus
Assignment (Exercise 7-2, 7-4, 7-8, 7-9, 7-13, 7-
16, 8-3, 8-13) 100% Score

Complete the following Week 1 Assignment in WileyPLUS:
Exercise 7-2
Exercise 7-4
Exercise 7-8
Exercise 7-9
Exercise 7-13
Exercise 7-16
Exercise 8-3
Exercise 8-13
Take a screenshot of your completed work, and Click the Assignment
Files tab to submit your screenshot.
*****************************************
ACC 422 Week 1 Summary
Post a 150 words summary what you have learned this week
*****************************************

ACC 422 Week 1 Team Assignment Audited
Financial Statements (Nordstrom Inc.)
Each team is assigned a publically traded company that they will use to
answer the questions in the Financial Scavenger Hunt assigned each
week.
Team A: Nordstrom Inc.
Team B: Macy's Inc.
Locate your assigned company's latest audited financial statements and
post them on the assignment tab.
Review the financial statements, including any notes and supplemental
information, and answer the following questions. Indicate where you
found the answer to the questions. If calculations are required, show
your work. Post your answers to the assignment tab.
Who are the auditors and have the auditors changed in the past 2 years?
If yes, who were the previous auditors and why was there a change?
What kind of opinion did the auditors issue on
The company as a whole
The internal control system
What is the date of the audit opinion? This is the date that fixes the
auditor's liability.
Have the financials been restated in the past 2 years?
Have there been any changes in the following positions in the past 2
years?
Chief Executive Officer
Chief Financial Officer
*****************************************

1. On June 18, 2005, Dell Printing Co. incurred the following costs for
one of its printing presses:
2. The overhaul resulted in a significant increase in production. Neither
the attachment nor the overhaul increased the estimated useful life of the
press. What amount of the above costs should be capitalized?
3. The following two inventory items were purchased as a group in a
liquidation sale for $1,000.
4. The firm purchasing the inventory records item A at what amount?
5. Which of the following statements are correct when a company
applying the lower of cost or market method reports its inventory at
replacement cost?
6. Immediately after a note payable was signed, its present value was
$30,000. This note and $20,000 cash were used to acquire a used plant
asset at the beginning of the current year. The interest rate implied in the

note is 6%. Total interest payments due on the note over its term amount
to $4,000. The term exceeds one year. No payments on the note are due
during the current year. What amount of interest expense is recognized
for the first year (current year) on this note, and what amount is
capitalized to the plant asset account?
7. Cole Co. began constructing a building for its own use in January
2004. During 2004, Cole incurred interest of $50,000 on specific
construction debt and $20,000 on other borrowings. Interest computed
on the weighted-average amount of accumulated expenditures for the
building during 2004 was $40,000. What amount of interest cost should
Cole capitalize?
8. Many years after constructing a plant asset, management spent a
significant sum on the asset. Which of the following types of
expenditures should be capitalized in this instance:
9. Which of the following is a not requirement for an asset to be
categorized as a plant asset.
10. Zahn Corp.'s comprehensive Balance Sheet at December 31, 2005
and 2004 reported accumulated depreciation balances of $800,000 and
$600,000, respectively. Property with a cost of $50,000 and a carrying
amount of $40,000 was the only property sold in 2005. Depreciation
charged to operations in 2005 was:
11. Talton Co. installed new assembly line production equipment at a
cost of $185,000. Talton had to rearrange the assembly line and remove
a wall to install the equipment. The rearrangement cost was $12,000 and
the wall removal cost was $3,000. The rearrangement did not increase

the life of the assembly line but it did make it more efficient. What
amount of these costs should be capitalized by Talton?
12. The original cost of an inventory item is above the replacement cost.
The inventory item's replacement cost is above the net realizable value.
Under the lower of cost or market method, the inventory item should be
valued at
13. When marking up a specific line of household items for resale, a
retailer computes its markup as 40% of cost. For purposes of estimating
ending inventory using the gross margin method, what percentage is
applied to sales when estimating cost of goods sold?
14. A flash flood swept through Hat, Inc.'s warehouse on May 1. After
the flood, Hat's accounting records showed the following:
15. What amount of inventory was lost in the flood?
16. Information for a firm using the dollar value (DV) LIFO retail
method follows. The cost to retail (C/R) is provided along with price
level indices. The data reflects the use of the method through year one.
17. For year two, ending inventory at retail (by count) totaled $310. The
ending price-level index for the year was 1.15. The cost-to-retail ratio
was .42. What is the ending inventory for financial reporting purposes
for this firm?
18. A firm began the construction of its new manufacturing facility in
January of 20x2. The following expenditures were made on construction
in that year:
19. Debt outstanding the entire year:
20. At the beginning of the year, Cann Co. started construction on a new
$2 million addition to its plant. Total construction expenditures made
during the year were $200,000 on January 2, $600,000 on May 1, and
$300,000 on December 1. On January 2, the company borrowed

$500,000 for the construction at 12%. The only other outstanding debt
the company had was a 10% interest rate, long-term mortgage of
$800,000, which had been outstanding the entire year. What amount of
interest should Cann capitalize as part of the cost of the plant addition?
21. A corporation entered into a purchase commitment to buy inventory.
At the end of the accounting period, the current market value of the
inventory was less than the fixed purchase price, by a material amount.
Which of the following accounting treatments is most appropriate?
22. Merry Co. purchased a machine costing $125,000 for its
manufacturing operations and paid shipping costs of $20,000. Merry
spent an additional $10,000 testing and preparing the machine for use.
What amount should Merry record as the cost of the machine?
23. How does the retail inventory method establish the lower-of-cost-or-
market valuation for ending inventory?
24. A firm uses the dollar value LIFO retail method and has $2,000 in
beginning inventory at retail at the beginning of the current year. The
base year equivalent of this amount is $1,600. The base year index is
1.00. The beginning inventory reported in the Balance Sheet is $800.
During the current year, the firm purchased $12,000 of inventory at cost
and marked that up to $40,000. Sales for the year were $28,000. The
relevant ending price index is 1.60. What amount does this firm report as
inventory in its Balance Sheet at the end of the current year?
*****************************************
ACC 422 Week 2 DQ 1

Week 2 – DQ 1
Under what circumstances would a company need to estimate its
inventory?
What are the differences between using the gross profit method and
retail inventory method for estimating inventory?
Which method of estimation, gross profit or retail inventory, is best?
Explain your answer.
*****************************************
ACC 422 Week 2 DQ 2
Week 2 – DQ 2
What are the criteria for capitalization of fixed assets?
What items are included in the cost of a fixed asset?
Should interest be included in the cost of a fixed asset? Explain why or
why not.
*****************************************
ACC 422 Week 2 DQ 3

Week 2 – DQ 3
How do we account for the disposition of fixed assets?
What are the differences in how the exchanges of assets are handled,
pending on whether they are similar or dissimilar?
What is the rationale for these differences?
What is the impact to the companies’ financial statements?
*****************************************
ACC 422 Week 2 Individual Assignment E7-2, E7-
8,Q13,E8-5 And E8-14
Resource: Intermediate Accounting
Prepare written responses to the following assignments from the text:
· Ch. 7: Exercises E7-2 & E7-8

Ch. 8: Question 13 and Exercises E8-5 & E8-14
*****************************************
Assignment (Exercise 9-3, 9-12, 9-19, 10-2, 10-
23, 10-24)
Complete the following Week Two Assignment in WileyPLUS:
Exercise 9-3
Exercise 9-12
Exercise 9-19
Exercise 10-2
Exercise 10-23
Exercise 10-24
*****************************************
ACC 422 Week 2 Learning Team Assignment
From The Text P7-10 And E8-25

· Ch. 7: Problem P7-10
Ch. 8: Exercise E8-25
*****************************************
*****************************************
ACC 422 Week 2 Team Assignment Textbook
Problems (P7-1, P7-2, P8-4) 100% Score

Prepare written responses to the following assignments from Ch. 7 & 8
of Intermediate Accounting:
Problem 7-1
Problem 7-2
Problem 8-4
Click the Assignment Files tab to submit your assignment.
*****************************************
1. Alta Co. spent $400,000 during the current year developing a new
idea for a product that was patented during the year. The legal cost of
applying for a patent license was $40,000. Also, $50,000 was spent to
successfully defend the rights of the patent against a competitor. The
patent has a life of 20 years. Under U.S. GAAP, what amount should
Alta capitalize related to the patent?

2. In 2005, Ball Labs incurred the following costs:
3. What was Ball's total research and development expense in 2005?
4. South Co. purchased a machine that was installed and placed in
service on January 1, 2004 at a cost of $240,000. Salvage value was
estimated at $40,000. The machine is being depreciated over 10 years by
the double declining balance method. For the year ended December 31,
2005, what amount should South report as depreciation expense?
5. A manufacturing firm purchased used equipment for $135,000. The
original owners estimated that the residual value of the equipment was
$10,000. The carrying amount of the equipment was $120,000 when
ownership transferred. The new owners estimate that the expected
remaining useful life of the equipment was 10 years, with a salvage
value of $15,000. What amount represents the depreciable base used by
the new owners?
6. After an impairment loss is recognized, the adjusted carrying amount
of the intangible asset shall be its new accounting basis. Which of the
following statements about subsequent reversal of a previously
recognized impairment loss is correct?
7. Northstar Co. acquired a registered trademark for $600,000. The
trademark has a remaining legal life of five years, but can be renewed
every 10 years for a nominal fee. Northstar expects to renew the
trademark indefinitely. What amount of amortization expense should
Northstar record for the trademark in the current year?
8. Hull Co. bought a trademark from Roe Corp. on January 1, 2005, for
$224,000.
9. A firm began a mineral exploitation venture during the current year by
spending (1) $40 million for the mineral rights; (2) $100 million
exploring for the minerals, one-fourth of which were successful; and (3)
$60 million to develop the site. Management estimated that 20 million
tons of ore would ultimately be removed from the property. Wages and

other extraction costs for the current year amounted to $10 million. In
total, 2 million tons of ore were removed from the deposit in the current
year. The entire production for the period was sold. Compute cost of
goods sold under the successful efforts method.
10. Spiro Corp. uses the sum-of-the-years' digits method to depreciate
equipment purchased in January 2003 for $20,000. The estimated
salvage value of the equipment is $2,000, and the estimated useful life is
four years. What should Spiro report as the asset's carrying amount as of
December 31, 2005?
11. A depreciable asset has an estimated 15% salvage value. Under
which of the following methods, properly applied, would the
accumulated depreciation equal the original cost at the end of the asset’s
estimated useful life?
12. What amount should Ichor report as depreciation expense for 2005?
13. Grayson Co. incurred significant costs in defending its patent rights.
Which of the following is the appropriate treatment of the related
litigation costs?
14. On April 1, 2004, Kew Co. purchased new machinery for $300,000.
The machinery has an estimated useful life of five years, and
depreciation is computed by the sum-of-the-years'-digits method. The
accumulated depreciation on this machinery at March 31, 2006 should
be:
15. Stam Co. incurred the following research and development project
costs during the current year:
16. The equipment has a five-year useful life and is depreciated using
the straight-line method. What amount should Stam recognize as
research and development expense at year end?
17. Star Co. leases a building for its product showroom. The 10-year
non-renewable lease will expire on December 31, 2007. In January
2002, Star redecorated its showroom and made leasehold improvements
of $48,000. The estimated useful life of the improvements is 8 years.

Star uses the straight-line method of amortization. What amount of
leasehold improvements, net of amortization, should Star report in its
June 30, 2002, Balance Sheet?
18. A company recently acquired a copyright that now has a remaining
legal life of 30 years. The copyright initially had a 38-year useful life
assigned to it. An analysis of market trends and consumer habits
indicated that the copyrighted material will generate positive cash flows
for approximately 25 years. What is the remaining useful life, if any,
over which the company can amortize the copyright for accounting
purposes?
19. Cantor Co. purchased a coal mine for $2,000,000. It cost $500,000 to
prepare the coal mine for the extraction of the coal. It was estimated that
750,000 tons of coal would be extracted from the mine during its useful
life. Cantor planned to sell the property for $100,000 at the end of its
useful life. During the current year, 15,000 tons of coal were extracted
and sold. What would Cantor's depletion amount be per ton for the
current year?
20. On January 1, 2004, Bay Co. acquired a land lease for a 21-year
period with no option to renew.
21. During 2005, Kent Co. incurred $204,000 of research and
development costs in its laboratory to develop a patent that was granted
on July 1, 2005. Legal fees and other costs associated with registration
of the patent totaled $41,000. The estimated economic life of the patent
is 10 years. What amount should Kent capitalize for the patent on July 1,
2005?
22. During 2005, Orr Co. incurred the following costs:
23. In its 2005 income statement, what should Orr report as research and
development expense?
24. Goodwill should be tested for value impairment at which of the
following levels?

25. In which of the following situations is the units of production
method of depreciation most appropriate?
26. Johan Co. has an intangible asset, which it estimates will have a
useful life of 10 years, while Abco Co. has goodwill, which has an
indefinite life. Which company should report amortization in its
financial statements?
27. A firm began a mineral exploitation venture during the current year
by spending (1) $40 million for the mineral rights; (2) $100 million
exploring for the minerals, one-fourth of which were successful; and (3)
$60 million to develop the site. Management estimated that 20 million
tons of ore would ultimately be removed from the property. Wages and
other extraction costs for the current year amounted to $10 million. In
total, 2 million tons of ore were removed from the deposit in the current
year. The entire production for the period was sold. What amount of
depletion is recognized during the current year under the full costing
method?
28. On January 2, 2005, Ral Co. leased land and a building from an
unrelated lessor for a 10-year term. The lease has a renewal option for an
additional 10 years, but Ral has not reached a decision with regard to the
renewal option. In early January of 2005, Ral completed the following
improvements to the property:
29. Amortization of leasehold improvements for 2006 should be:
30. The machines were put into use immediately. Machine A has a
useful life of 5 years and can only be used in one research project.
Machine B will be used for 2 years on a research and development

project and then used by the production division for an additional 8
years. Wizard uses the straight-line method of depreciation.
31. What amount should Wizard include in 2005 research and
development expense?
32. Hull Co. bought a trademark from Roe Corp. on January 1, 2005, for
$224,000.
Hull retained an independent consultant who estimated the trademark's
remaining useful life to be 20 years. The trademark most likely will not
be renewed. Its unamortized cost on Roe's accounting records was
$112,000.
In Hull's December 31, 2005 Balance Sheet, what amount should be
reported as accumulated amortization?
33. A company reported $6 million of goodwill in last year's statement
of financial position. How should the company account for the reported
goodwill in the current year?
34. What factor must be present to use the units of production (activity)
method of depreciation?
35. Ajax Corp. has an effective tax rate of 30%. On January 1, 2000,
Ajax purchased equipment for $100,000. The equipment has a useful life
of 10 years. What amount of current tax benefit will Ajax realize during
2000 by using the 150% declining-balance method of depreciation for
tax purposes instead of the straight-line method?
36. During 2005, Kent Co. incurred $204,000 of research and
development costs in its laboratory to develop a patent that was granted
on July 1, 2005. Legal fees and other costs associated with registration
of the patent totaled $41,000. The estimated economic life of the patent
is 10 years. What amount should Kent capitalize for the patent on July 1,
2005?
37. Ichor Co. reported equipment with an original cost of $379,000 and
$344,000 and accumulated depreciation of $153,000 and $128,000,

respectively, in its comparative financial statements for the years ended
December 31, 2005 and 2004.
During 2005, Ichor purchased equipment costing $50,000 and sold
equipment with a carrying value of $9,000.
38. On January 1, 2000, Nobb Corp. signed a 12-year lease for
warehouse space. Nobb has an option to renew the lease for an
additional 8-year period on or before January 1, 2004.
39. On April 1, 2004, Kew Co. purchased new machinery for $300,000.
The machinery has an estimated useful life of five years, and
depreciation is computed by the sum-of-the-years'-digits method. The
accumulated depreciation on this machinery at March 31, 2006 should
be:
40. A manufacturing firm purchased used equipment for $135,000. The
original owners estimated that the residual value of the equipment was
$10,000. The carrying amount of the equipment was $120,000 when
ownership transferred. The new owners estimate that the expected
remaining useful life of the equipment was 10 years, with a salvage
value of $15,000. What amount represents the depreciable base used by
the new owners?
41. What is the total R & D cost that will be expensed when incurred?
*****************************************
ACC 422 Week 3 DQ 1

Week 3 – DQ 1
What is the purpose of depreciation?
Does the book value of a fixed asset (cost minus accumulated
depreciation) communicate to a user what the asset is worth? Explain
why or why not.
Should the financial statements reflect the value of fixed assets? Explain
why or why not.
*****************************************
ACC 422 Week 3 DQ 2
Week 3 – DQ 2
What are the different methods used to calculate depreciation?
How does a company decide which method it should utilize?
How does its choice affect the financial statements?
Should companies standardize the method of depreciation to enhance
comparability? Explain your answer.
*****************************************
ACC 422 Week 3 DQ 3

Week 3 – DQ 3
What is an intangible asset?
Should all intangible assets be subject to amortization? Explain why or
why not.
Why are some intangible assets not amortized?
What is the implication to the financial statements?
*****************************************
ACC 422 Week 3 DQ 4
ACC 422 Week 3 DQ 4
*****************************************
ACC 422 Week 3 Individual Assignment From the
Text E9-1,E9-12,E9-19,E10-5 And E10-12

· Ch. 9: Exorcices E9-1, E9-12, & E9-19
Ch. 10: Exercises E10-5 & E10-12
*****************************************
Assignment Exercise 11-6, 11-9, 11-21, 12-1, 12-
6, 12-8, 12-17
Complete the following Week Three Assignment in WileyPLUS:
Exercise 11-6
Exercise 11-9

Exercise 11-21
Exercise 12-1
Exercise 12-6
Exercise 12-8
Exercise 12-17
*****************************************
ACC 422 Week 3 Learning Team Assignment
From The Text P9-9 And P10-8
· Ch. 9: Problem P9-9
Ch. 10: Problem P10-8
*****************************************

*****************************************
ACC 422 Week 3 Team Assignment Textbook
Problems (P9-2, P9-4, P10-3, P10-4) 100% Score
Prepare written responses to the following assignments from Ch. 9 & 10
of Intermediate Accounting:
Problem 9-2
Problem 9-4
Problem 10-3
Problem 10-4
Click the Assignment Files tab to submit your assignment.
*****************************************

1. On September 30, World Co. borrowed $1,000,000 on a 9% note
payable. World paid the first of four quarterly payments of $264,200
when due on December 30. In its December 31, balance sheet, what
amount should World report as note payable?
2. Gain contingencies are usually recognized in the income statement
when
3. For a bond issue which sells for less than its par value, the market rate
of interest is
4. In December year 1, Mill Co. began including one coupon in each
package of candy that it sells and offering a toy in exchange for 50 cents
and five coupons. The toys cost Mill 80 cents each. Eventually 60% of
the coupons will be redeemed. During December, Mill sold 110,000
packages of candy and no coupons were redeemed. In its December 31,
year 1 balance sheet, what amount should Mill report as estimated
liability for coupons?
5. When the interest payment dates of a bond are May 1 and November
1, and the bond is issued on June 1, year 1, the amount of interest
expense for the year ended December 31, year 1, would be for

ACC 422 Believe Possibilities / snaptutorial.com

ACC 422 Believe Possibilities / snaptutorial.com

Recommended

Recommended

More Related Content

Similar to ACC 422 Believe Possibilities / snaptutorial.com

Similar to ACC 422 Believe Possibilities / snaptutorial.com (20)

Recently uploaded

Recently uploaded (20)

ACC 422 Believe Possibilities / snaptutorial.com