This document is a comprehensive guide for an ACC 422 final exam, containing multiple exercises, questions, and scenarios involving financial transactions, journal entries, and accounting principles. It includes various brief exercises concerning cash reporting, inventory systems, asset evaluations, goodwill impairment, and warranty liabilities, among others. The content aims to assist students in understanding and applying accounting concepts effectively.

1. ACC 422 Final Exam Guide
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Brief Exercise 7-1
Brief Exercise 7-7
Brief Exercise 7-14
Brief Exercise 7-15
Brief Exercise 8-4 (Part Level Submission)
Brief Exercise 8-5

2. Brief Exercise 8-6
Multiple Choice Question 21
Question 14
Brief Exercise 9-4
Exercise 9-4
Brief Exercise 10-6
Brief Exercise 10-8
Exercise 10-1
Question 9
Brief Exercise 11-8
Brief Exercise 12-2

3. Brief Exercise 12-8
Exercise 12-3
Brief Exercise 13-2
Brief Exercise 13-5
Brief Exercise 13-10
Brief Exercise 13-13
Brief Exercise 14-3
Brief Exercise 14-12
Brief Exercise 14-14
Brief Exercise 21-11

4. Exercise 21-1
Multiple Choice Question 99
Multiple Choice Question 70
Brief Exercise 7-1
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Your answer is correct.
Vaughn Enterprises owns the following assets at December 31, 2017.
Cash in bank—savings account
69,000
Checking account balance

5. 17,600
Cash on hand
9,030
Postdated checks
770
Cash refund due from IRS
35,600
Certificates of deposit (180-day)
94,570
What amount should be reported as cash?
Brief Exercise 7-7

6. Larkspur Family Importers sold goods to Tung Decorators for
$40,800 on November 1, 2017, accepting Tung’s $40,800, 6-month,
6% note.
Prepare Larkspur’s November 1 entry, December 31 annual
adjusting entry, and May 1 entry for the collection of the note and
interest.
Brief Exercise 7-14
Recent financial statements of General Mills, Inc. report net sales of
$12,442,000,000. Accounts receivable are $912,000,000 at the
beginning of the year and $953,000,000 at the end of the year.
Brief Exercise 7-15
Indigo Company designated Jill Holland as petty cash custodian and
established a petty cash fund of $290. The fund is reimbursed when
the cash in the fund is at $26, which it is. Petty cash receipts indicate
funds were disbursed for office supplies $92 and miscellaneous
expense $169.
Prepare journal entries for the establishment of the fund and the
reimbursement.
Brief Exercise 8-4 (Part Level Submission)
Pharoah Company uses a periodic inventory system. For April, when
the company sold 500 units, the following information is available.

7. Units
Unit Cost
Total Cost
April 1 inventory
290
$32
$ 9,280
April 15 purchase
430
38
16,340

8. April 23 purchase
280
42
11,760
1,000
$37,380

9. Brief Exercise 8-6
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Your answer is correct.
Sandhill Company uses a periodic inventory system. For April, when
the company sold 600 units, the following information is available.
Units
Unit Cost
Total Cost
April 1 inventory
270
$30

10. $ 8,100
April 15 purchase
440
36
15,840
April 23 purchase
290
39
11,310
1,000

11. $35,250
Compute the April 30 inventory and the April cost of goods sold using
the LIFO method.
Multiple Choice Question 21
Which of the following inventories carried by a manufacturer is
similar to the merchandise inventory of a retailer?
Question 14
A fire destroys all of the merchandise of Shamrock Company on
February 10, 2017. Presented below is information compiled up to
the date of the fire.
Inventory, January 1, 2017
$432,200
Sales revenue to February 10, 2017
1,935,200

12. Purchases to February 10, 2017
1,104,580
Freight-in to February 10, 2017
59,180
Rate of gross profit on selling price
35%
What is the approximate inventory on February 10, 2017?
Exercise 9-4
Martinez Company began operations in 2017 and determined its
ending inventory at cost and at LCNRV at December 31, 2017, and
December 31, 2018. This information is presented below.
Cost

13. Net Realizable Value
12/31/17
$322,170
$299,520
12/31/18
409,250
390,440
(a) Prepare the journal entries required at December 31, 2017, and
December 31, 2018, assuming inventory is recorded at LCNRV and a
perpetual inventory system using the cost-of-goods-sold method.
Brief Exercise 10-6
Waterway Inc. purchased land, building, and equipment from Laguna
Corporation for a cash payment of $327,600. The estimated fair
values of the assets are land $62,400, building $228,800, and

14. equipment $83,200. At what amounts should each of the three assets
be recorded?
Brief Exercise 10-8
Pearl Corporation traded a used truck (cost $29,600, accumulated
depreciation $26,640) for a small computer with a fair value of
$4,884. Pearl also paid $740 in the transaction.
Prepare the journal entry to record the exchange. (The exchange has
commercial substance.)
Exercise 10-1
The expenditures and receipts below are related to land, land
improvements, and buildings acquired for use in a business
enterprise. The receipts are enclosed in parentheses.
(a)
Money borrowed to pay building contractor (signed a note)
$(285,400
)
(b)
Payment for construction from note proceeds

15. 285,400
(c)
Cost of land fill and clearing
11,790
(d)
Delinquent real estate taxes on property assumed by purchaser
7,300
(e)
Premium on 6-month insurance policy during construction
8,580

16. (f)
Refund of 1-month insurance premium because construction
completed early
(1,430
)
(g)
Architect’s fee on building
26,200
(h)
Cost of real estate purchased as a plant site (land $209,100 and
building $52,900)
262,000
(i)

17. Commission fee paid to real estate agency
8,970
(j)
Installation of fences around property
3,770
(k)
Cost of razing and removing building
11,710
(l)
Proceeds from salvage of demolished building
(4,550

18. )
(m)
Interest paid during construction on money borrowed for
construction
13,150
(n)
Cost of parking lots and driveways
20,050
(o)
Cost of trees and shrubbery planted (permanent in nature)
14,440
(p)

19. Excavation costs for new building
2,700
Identify each item by letter and list the items in columnar form, using
the headings shown below. All receipt amounts should be reported in
parentheses. For any amounts entered in the Other Accounts column,
also indicate the account title.
Question 9
Sage Company purchased machinery for $174,300 on January 1,
2017. It is estimated that the machinery will have a useful life of 20
years, salvage value of $14,700, production of 81,900 units, and
working hours of 44,000. During 2017, the company uses the
machinery for 11,440 hours, and the machinery produces 9,009 units.
Compute depreciation under the straight-line, units-of-output,
working hours, sum-of-the-years’-digits, and double-declining-
balance methods.
Brief Exercise 11-8
Carla Company owns equipment that cost $1,008,000 and has
accumulated depreciation of $425,600. The expected future net cash
flows from the use of the asset are expected to be $560,000. The fair
value of the equipment is $448,000.
Prepare the journal entry, if any, to record the impairment loss.

20. Brief Exercise 12-8
Concord Corporation purchased Johnson Company 3 years ago and
at that time recorded goodwill of $330,000. The Johnson Division’s
net assets, including the goodwill, have a carrying amount of
$700,000. The fair value of the division is estimated to be $668,000
and the implied goodwill is $298,000.
Prepare Concord journal entry to record impairment of the goodwill.
Exercise 12-3
Joni Marin Inc. has the following amounts reported in its general
ledger at the end of the current year.
Organization costs
$24,400
Trademarks
16,900
Discount on bonds payable
37,400
Deposits with advertising agency for ads to promote goodwill of
company

21. 12,400
Excess of cost over fair value of net identifiable assets of acquired
subsidiary
77,400
Cost of equipment acquired for research and development projects;
the
equipment has an alternative future use
87,400
Costs of developing a secret formula for a product that is expected to
be marketed for at least 20 years
83,800
(a)
On the basis of this information, compute the total amount to be
reported by Marin for intangible assets on its balance sheet at year-
end.

22. Brief Exercise 13-2
Ivanhoe Company borrowed $30,000 on November 1, 2017, by
signing a $30,000, 8%, 3-month note. Prepare Ivanhoe’s November
1, 2017, entry; the December 31, 2017, annual adjusting entry; and
the February 1, 2018, entry.
Brief Exercise 13-5
Riverbed Corporation made credit sales of $19,800 which are subject
to 7% sales tax. The corporation also made cash sales which totaled
$28,462 including the 7% sales tax.
Prepare the entry to record Riverbed’s credit sales.
Brief Exercise 13-10
Windsor Inc. is involved in a lawsuit at December 31, 2017.
Prepare the December 31 entry assuming it is probable that Windsor
will be liable for $862,200 as a result of this suit.
Brief Exercise 13-13
Martinez Factory provides a 2-year warranty with one of its products
which was first sold in 2017. Martinez sold $930,400 of products
subject to the warranty. Martinez expects $124,050 of warranty costs
over the next 2 years. In that year, Martinez spent $70,460 servicing
warranty claims. Prepare Martinez’s journal entry to record the sales
(ignore cost of goods sold) and the December 31 adjusting entry,
assuming the expenditures are inventory costs.

23. Brief Exercise 14-3
The Skysong Company issued $260,000 of 10% bonds on January 1,
2017. The bonds are due January 1, 2022, with interest payable each
July 1 and January 1. The bonds were issued at 98.
Prepare the journal entries for (a) January 1, (b) July 1, and (c)
December 31. Assume The Skysong Company records straight-line
amortization semiannually.
Brief Exercise 14-12
Vaughn Corporation issued a 4-year, $55,000, 5% note to Greenbush
Company on January 1, 2017, and received a computer that normally
sells for $44,762. The note requires annual interest payments each
December 31. The market rate of interest for a note of similar risk is
11%.
Prepare Vaughn’s journal entries for (a) the January 1 issuance and
(b) the December 31 interest.
Multiple Choice Question 99
On June 30, 2018, Sheridan Co. sold equipment to an unaffiliated
company for $2250000. The equipment had a book value of $1205000
and a remaining useful life of 10 years. That same day, Sheridan
leased back the equipment at $12500 per month for 5 years with no
option to renew the lease or repurchase the equipment. Sheridan’s
rent expense for this equipment for the year ended December 31,
2018, should be