The document contains a detailed account of a final exam for an intermediate accounting course, featuring multiple questions that cover various topics such as income statements, cash flows, present value calculations, and accounting for inventory. Each question is assigned a specific point value, and there are instructions for preparing financial statements, journal entries, and answering multiple-choice questions. The exam encompasses practical scenarios and requires a thorough understanding of accounting principles and methodologies.

1. Name:
Acct310.Sa.14
Final Exam
Question 1: 10% points

3. Answer Sheet Page 1 of 5 .Sa.14
Final Exam
Question 2: 10% points

5. Answer Sheet Page 2 of 5 .Sa.14
Final Exam

6. Question 3: 10% points
a. Present Value of Note Receivable
b. Schedule of Note Discount:
Date
Cash Interest
Effective Interest
Discount Amortized
Unamortized Discount
Balance of Note

7. Question 4: 8% points
a. Cost of Goods Available for Sale
b. LIFO Ending Inventory
c. FIFO Cost of Goods Sold
d. Gross Profit using Moving Average
Question 5: 9% points:

9. Answer Sheet Page 3 of 5 .Sa.14
Final Exam
Question 6: 10% points:
a. Gain/Loss Recognized:
b. General Journal Entries:
Date
Account
Debit
Credit

10. Question 7: 9% points:
Date
Account
Debit
Credit

11. Question 8: 9% points:
Date
Account
Debit
Credit

12. Answer Sheet Page 4 of 5 .Sa.14
Final Exam
Multiple choice questions allocated 1% point each: Make your
selection by indicating the letter corresponding to your answer.
Question Number
Answer
Question Number
Answer
Question Number
Answer
9:
19:

13. 29:
10:
20:
30:
B
11:
21:
31:
C
12:
22:
32:
C
13:
23:
33:
D
14:
24:
15:
25:
16:

14. 26:
17:
27:
18:
28:
Answer Sheet Page 5 of 5 .Sa.14
Final Exam
University of Maryland University College
Final Examination
Acct310: Intermediate Accounting I
For this exam, omit all general journal entry explanations.
Ensure to include correct dollar signs, underlines & double
underlines,
when required. Ensure to use proper financial document format
details
such as blank lines where required.
Question 1: 10% points: Frick Corporation's capital structure
consists of 50,000
shares of common stock. At December 31, 2014 an analysis of
the accounts and

15. discussions with company officials revealed the following
information:
Sales revenue $1,200,000
Earthquake loss (net of tax) (extraordinary item) 56,000
Selling expenses 128,000
Cash 60,000
Accounts receivable 90,000
Common stock 200,000
Cost of goods sold 701,000
Accumulated depreciation-machinery 180,000
Dividend revenue 8,000
Unearned service revenue 4,400
Interest payable 1,000
Land 370,000
Patents 100,000
Retained earnings, January 1, 2014 290,000
Interest expense 17,000
Administrative expenses 170,000
Dividends declared 24,000
Allowance for doubtful accounts 5,000
Notes payable (maturity 7/1/17) 200,000
Machinery 450,000
Materials 40,000
Accounts payable 60,000
The amount of income taxes applicable to ordinary income was
$57,600, excluding
the tax effect of the earthquake loss, which amounted to
$24,000.
Instructions: Prepare a multiple-step income statement.

16. Question 2: 10% points: Selected financial statement
information and additional
data for Frack Co. is presented below. Prepare a statement of
cash flows for the
year ending December 31, 2014. All balances are normal.
Account 12/31/13 12/31/14
Cash $42,000 $65,000
Accounts Receivable (net) 84,000 144,200
Inventory 168,000 206,600
Land 58,800 21,000
Equipment 504,000 789,600
Totals $856,800 $1226,400
Accumulated Depreciation $84,000 $115,600
Accounts Payable 50,400 86,000
Notes Payable - Short Term 67,200 29,400
Notes Payable - Long Term 168,000 302,400
Common Stock 420,000 487,200
Retained Earnings 67,200 205,800
Totals $856,800 $1,226,400
Additional data for 2014:
a. Net income was $220,200.
b. Depreciation was $31,600.
c. Land was sold at its original cost.
d. Dividends of $81,600 were paid.
e. Equipment was purchased for $84,000 cash.
f. A long-term note for $201,600 was used to pay for an
equipment purchase.
g. Common stock was issued to pay a $67,200 long-term note
payable.
Question 3: 10% points: On December 31, 2014, Flip Company
finished
consultation services and accepted in exchange a promissory

17. note with a face value
of $600,000, a due date of December 31, 2017, and a stated rate
of 5%, with interest
receivable at the end of each year. The fair value of the services
is not readily
determinable and the note is not readily marketable. Under the
circumstances, the
note is considered to have an appropriate imputed rate of
interest of 10%. Use
factor tables (from chapter 6) provided in our LEO class.
Instructions:
a. Determine the present value of the note.
b. Prepare a Schedule of Note Discount Amortization for Flip
Company under the
effective interest method. (Round to whole dollars.)
Question 4: 8% points: A record of Flop's transactions for the
month of May was as
follows:
Purchases Sales
May 1 (balance) 400 @ $4.20 May 3 200 @ $7.00
4 1,300 @ $4.10 6 1,000 @ 7.00
8 800 @ $4.30 12 900 @ 7.50
14 700 @ $4.40 18 400 @ 7.50
22 1,200 @ $4.50 25 1,400 @ 8.00
29 500 @ $4.55
Instructions
Assuming that perpetual inventory records are kept, determine

18. in dollars, each of
the following:
a. Cost of Goods Available for Sale.
b. LIFO Ending Inventory.
c. FIFO Cost of Goods Sold.
d. Gross Profit using Moving Average.
Question 5: 9% points: Flim Co. prepares monthly income
statements. Inventory is
counted only at year end; thus, month-end inventories must be
estimated. All sales
are made on account. The rate of mark-up on cost is 20%. The
following
information relates to the month of March, 2015.
Accounts receivable, March 1 $21,000
Accounts receivable, March 31 15,000
Collections of accounts during March 96,000
Inventory, March 1 45,000
Purchases during March 58,000
Instructions: Prepare a partial monthly income statement, with
detailed Cost of
Goods Sold section, through up to Gross Profit for the month
ending March 31.
Question 6: 10% points: Flam Co. had a sheet metal cutter that
cost $120,000 on
January 31, 2010. This old cutter had an estimated life of ten
years and a salvage
value of $20,000. On April 3, 2015, the old cutter is exchanged
for a new cutter with
a fair value of $60,000. The exchange lacked commercial
substance. Flam also
received $15,000 cash. Assume that the last fiscal period ended

19. on December 31,
2014, and that double declining balance depreciation method is
used.
Instructions:
a. What amount of the gain or loss will be recognized by Flam
Co.
b. Prepare all entries that are necessary on April 3, 2015.
Question 7: 9% points: A truck was acquired on July 1, 2012, at
a cost of $162,000.
The truck had a six-year useful life and an estimated salvage
value of $18,000. The
double-declining balance method of depreciation was used. On
January 1, 2015, the
truck was overhauled at a cost of $15,000, which extended the
useful life of the truck
for an additional two years beyond that originally estimated
(salvage value is still
estimated at $18,000). In computing depreciation for annual
adjustment purposes,
expense is calculated for each month the asset is owned.
Instructions: Prepare the appropriate entries for January 1, 2015
and December 31,
2015.
Question 8: 9% points: Floozy Corporation purchases a patent
from Flip Company
on January.1, 2014, for $72,000. The patent has a remaining
legal of 16 years.

20. Floozy feels the patent will be useful for 10 years. Assume that
at January 1, 2016,
the carrying amount of the patent on Floozy's books is $57,600.
In January, Floozy
spends $20,000 successfully defending a patent suit. Floozy still
feels the patent will
be useful until the end of 2023.
Instructions: Prepare Floozy's journal entries to record the
amortization for 2014
and 2016.
Multiple choice questions allocated 1% point each. Make your
selection by
recording the letter in the answer box provided.
Question 9: Floozy Corp.'s trial balance of income statement
accounts for the year
ended December 31, 2014 included the following:
Debit Credit
Sales revenue $280,000
Cost of goods sold $150,000
Administrative expenses 40,000
Loss on disposal of equipment 18,000
Sales commission expense 16,000
Interest revenue 10,000
Freight-out 6,000
Loss due to earthquake damage 24,000
Bad debt expense 6,000
Totals $260,000 $290,000
Other information:
Floozy's income tax rate is 30%. Finished goods inventory:

21. January 1, 2014 $160,000
December 31, 2014 140,000
On Floozy's multiple-step income statement for 2014, Cost of
goods
manufactured is
a. $176,000.
b. $170,000.
c. $136,000.
d. $130,000.
Question 10: Which of the following should be reported as a
prior period
adjustment?
Change in Estimated Lives Mistakes in the Application of
of Depreciable Assets Accounting Principles
a. Yes Yes
b. No Yes
c. Yes No
d. No No
Question 11: The following trial balance of Floozy Corp. at
December 31, 2014
has been properly adjusted except for the income tax expense
adjustment.
Floozy Corp.
Trial Balance
December 31, 2014
Dr. Cr.
Cash $ 775,000
Accounts receivable (net) 2,695,000

22. Inventory 2,085,000
Property, plant, and equipment (net) 7,566,000
Accounts payable and accrued liabilities $ 1,701,000
Income taxes payable 654,000
Deferred income tax liability 85,000
Common stock 2,350,000
Additional paid-in capital 3,680,000
Retained earnings, 1/1/14 3,450,000
Net sales and other revenues 13,560,000
Costs and expenses 11,180,000
Income tax expenses 1,179,000
$25,480,000 $25,480,000
Other financial data for the year ended December 31, 2014:
• Included in accounts receivable is $1,200,000 due from a
customer and payable
in quarterly installments of $150,000. The last payment is due
December 29,
2016.
• The balance in the Deferred Income Tax Liability account
pertains to a
temporary difference that arose in a prior year, of which
$20,000 is classified as
a current liability.
• During the year, estimated tax payments of $525,000 were
charged to income tax
expense. The current and future tax rate on all types of income
is 30%.
In Floozy's December 31, 2014 balance sheet, the current assets
total is

23. a. $6,080,000.
b. $5,555,000.
c. $5,405,000.
d. $4,955,000.
Question 12: The following trial balance of Floozy Corp. at
December 31, 2014
has been properly adjusted except for the income tax expense
adjustment.
Floozy Corp.
Trial Balance
December 31, 2014
Dr. Cr.
Cash $ 775,000
Accounts receivable (net) 2,695,000
Inventory 2,085,000
Property, plant, and equipment (net) 7,566,000
Accounts payable and accrued liabilities $ 1,701,000
Income taxes payable 654,000
Deferred income tax liability 85,000
Common stock 2,350,000
Additional paid-in capital 3,680,000
Retained earnings, 1/1/14 3,450,000
Net sales and other revenues 13,560,000
Costs and expenses 11,180,000
Income tax expenses 1,179,000
$25,480,000 $25,480,000
Other financial data for the year ended December 31, 2014:
• Included in accounts receivable is $1,200,000 due from a
customer and payable

24. in quarterly installments of $150,000. The last payment is due
December 29,
2016.
• The balance in the Deferred Income Tax Liability account
pertains to a
temporary difference that arose in a prior year, of which
$20,000 is classified as
a current liability.
• During the year, estimated tax payments of $525,000 were
charged to income tax
expense. The current and future tax rate on all types of income
is 30%.
In Floozy's December 31, 2014 balance sheet, the current
liabilities total is
a. $1,850,000.
b. $1,915,000.
c. $2,375,000.
d. $2,440,000.
Question 13: The following trial balance of Floozy Corp. at
December 31, 2014
has been properly adjusted except for the income tax expense
adjustment.
Floozy Corp.
Trial Balance

25. December 31, 2014
Dr. Cr.
Cash $ 775,000
Accounts receivable (net) 2,695,000
Inventory 2,085,000
Property, plant, and equipment (net) 7,566,000
Accounts payable and accrued liabilities $ 1,701,000
Income taxes payable 654,000
Deferred income tax liability 85,000
Common stock 2,350,000
Additional paid-in capital 3,680,000
Retained earnings, 1/1/14 3,450,000
Net sales and other revenues 13,560,000
Costs and expenses 11,180,000
Income tax expenses 1,179,000
$25,480,000 $25,480,000
Other financial data for the year ended December 31, 2014:
• Included in accounts receivable is $1,200,000 due from a
customer and payable
in quarterly installments of $150,000. The last payment is due
December 29,
2016.
• The balance in the Deferred Income Tax Liability account
pertains to a
temporary difference that arose in a prior year, of which
$20,000 is classified as
a current liability.
• During the year, estimated tax payments of $525,000 were
charged to income tax
expense. The current and future tax rate on all types of income
is 30%.

26. In Floozy's December 31, 2014 balance sheet, the final retained
earnings balance is
a. $4,651,000.
b. $4,736,000.
c. $5,176,000.
d. $5,105,000.
Question 14: Floozy Co. prepared an aging of its accounts
receivable at December
31, 2014 and determined that the net realizable value of the
receivables was
$600,000. Additional information is available as follows:
Allowance for uncollectible accounts at 1/1/14—credit balance
$ 68,000
Accounts written off as uncollectible during 2014 46,000
Accounts receivable at 12/31/14 650,000
Uncollectible accounts recovered during 2014 10,000
For the year ended December 31, 2014, Floozy's uncollectible
accounts
expense would be
a. $50,000.
b. $46,000.
c. $32,000.
d. $18,000.

27. Question 15: On January 1, 2014, Floozy Co. exchanged
equipment for a $600,000
zero-interest-bearing note due on January 1, 2017. The
prevailing rate of interest
for a note of this type at January 1, 2014 was 10%. The present
value of $1 at 10%
for three periods is 0.75. What amount of interest revenue
should be included in
Floozy's 2015 income statement?
a. $0
b. $45,000
c. $49,500
d. $60,000
Question 16: Which of the following is a method to generate
cash from accounts
receivable?
Assignment Factoring
a. Yes No
b. Yes Yes
c. No Yes
d. No No
Question 17: The balance in Floozy Co.'s accounts payable
account at December 31,
2014 was $950,000 before any necessary year-end adjustments
relating to the
following:
• Goods were in transit to Floozy from a vendor on December

28. 31, 2014.
The invoice cost was $40,000. The goods were shipped f.o.b.
shipping
point on December 29, 2014 and were received on January 4,
2015.
• Goods shipped f.o.b. destination on December 21, 2014 from a
vendor to
Floozy were received on January 6, 2015. The invoice cost was
$25,000.
• On December 27, 2014, Floozy wrote and recorded checks to
creditors
totaling $30,000 that were mailed on January 10, 2015.
In Floozy's December 31, 2014 balance sheet, the accounts
payable should be
a. $ 980,000.
b. $ 990,000.
c. $1,015,000.
d. $1,020,000.
Question 18: Floozy Co.'s accounts payable balance at
December 31, 2014 was
$1,400,000 before considering the following transactions:
• Goods were in transit from a vendor to Floozy on December
31, 2014.
The invoice price was $70,000, and the goods were shipped
f.o.b. shipping
point on December 29, 2014. The goods were received on
January 4, 2015.

29. • Goods shipped to Floozy, f.o.b. shipping point on December
20, 2014,
from a vendor were lost in transit. The invoice price was
$50,000. On
January 5, 2015, Floozy filed a $50,000 claim against the
common carrier.
In its December 31, 2014 balance sheet, Floozy should report
accounts
payable of
a. $1,520,000.
b. $1,470,000.
c. $1,450,000.
d. $1,400,000.
Question 19: Floozy Co. recorded the following data pertaining
to raw material X
during January 2014:
Units
Date Received Cost Issued On Hand
1/1/14 Inventory $6.00 3,200
1/11/14 Issue 1,600 1,600
1/22/14 Purchase 4,000 $7.05 5,600
The moving-average unit cost of X inventory at January 31,
2014 is
a. $6.52.
b. $6.63.
c. $6.75.
d. $7.05.

30. Question 20: Floozy Co. had 150 units of product A on hand at
January 1, 2014,
costing $21 each. Purchases of product A during January were
as follows:
Date Units Unit Cost
Jan. 10 200 $22
18 250 23
28 100 24
A physical count on January 31, 2014 shows 200 units of
product A on hand.
The cost of the inventory at January 31, 2014 under the LIFO
method is
a. $4,700.
b. $4,450.
c. $4,250.
d. $4,100.
Question 21: Floozy Company's accounting records indicated
the following
information:
Inventory, 1/1/14 $ 1,200,000
Purchases during 2014 6,000,000
Sales during 2014 7,600,000
A physical inventory taken on December 31, 2014, resulted in
an ending
inventory of $1,400,000. Floozy's gross profit on sales has
remained constant
at 25% in recent years. Floozy suspects some inventory may
have been taken
by a new employee. At December 31, 2014, what is the
estimated cost of

31. missing inventory?
a. $100,000.
b. $300,000.
c. $400,000.
d. $500,000.
Question 22: Floozy, a chain of candy stores, purchases its
candy in bulk from its
suppliers. For a recent shipment, the company paid $1,500 and
received
8,500 pieces of candy that are allocated among three groups.
Group 1
consists of 2,500 pieces that are expected to sell for $0.15 each.
Group 2
consists of 5,500 pieces that are expected to sell for $0.36 each.
Group 3
consists of 500 pieces that are expected to sell for $0.72 each.
Using the
relative sales value method, what is the cost per item in Group
2?
a. $0.19.
b. $0.30.
c. $0.18.
d. $0.20.
Question 23: The following information is available for October
for Floozy
Company.
Beginning inventory $300,000

32. Net purchases 900,000
Net sales 1,800,000
Percentage markup on cost 66.67%
A fire destroyed Floozy’s October 31 inventory, leaving
undamaged
inventory with a cost of $18,000. Using the gross profit method,
the estimated
ending inventory destroyed by fire is
a. $102,000.
b. $462,000.
c. $480,000.
d. $600,000.
Question 24: On January 1, 2014, the merchandise inventory of
Floozy, Inc. was
$1,200,000. During 2014 Floozy purchased $2,400,000 of
merchandise and
recorded sales of $3,000,000. The gross profit rate on these
sales was 25%.
What is the merchandise inventory of Floozy at December 31,
2014?
a. $600,000.
b. $750,000.
c. $1,350,000.
d. $2,250,000.
Question 25: On December 1, 2014, Floozy Co. purchased a
tract of land as a
factory site for $750,000. The old building on the property was
razed, and
salvaged materials resulting from demolition were sold.

33. Additional costs
incurred and salvage proceeds realized during December 2014
were as
follows:
Cost to raze old building $70,000
Legal fees for purchase contract and to record ownership 10,000
Title guarantee insurance 16,000
Proceeds from sale of salvaged materials 8,000
In Floozy 's December 31, 2014 balance sheet, what amount
should be
reported as land?
a. $776,000.
b. $812,000.
c. $838,000.
d. $846,000.
Question 26: Floozy Football Co. had a player contract with
Watts that is recorded
in its books at $5,600,000 on July 1, 2014. Day Football Co.
had a player
contract with Kurtz that is recorded in its books at $7,000,000
on July 1,
2014. On this date, Floozy traded Watts to Day for Kurtz and
paid a cash
difference of $700,000. The fair value of the Kurtz contract was
$8,400,000
on the exchange date. The exchange had no commercial
substance. After the
exchange, the Kurtz contract should be recorded in Floozy's
books at

34. a. $6,300,000.
b. $7,000,000.
c. $7,700,000.
d. $8,400,000.
Question 27: On September 10, 2014, Floozy Co. incurred the
following costs for one
of its printing presses:
Purchase of attachment $45,000
Installation of attachment 5,000
Replacement parts for renovation of press 18,000
Labor and overhead in connection with renovation of press
7,000
Neither the attachment nor the renovation increased the
estimated useful life
of the press. However, the renovation resulted in significantly
increased
productivity. What amount of the costs should be capitalized?
a. $0.
b. $57,000.
c. $68,000.
d. $75,000.
Question 28: Floozy Co. purchased a machine on July 1, 2014,
for $800,000. The
machine has an estimated useful life of five years and a salvage
value of
$160,000. The machine is being depreciated from the date of
acquisition by
the 150% declining-balance method. For the year ended
December 31, 2014,

35. Floozy should record depreciation expense on this machine of
a. $240,000.
b. $160,000.
c. $120,000.
d. $96,000.
Question 29: A depreciable asset has an estimated 15% salvage
value. At the end of
its estimated useful life, the accumulated depreciation would
equal the original cost
of the asset under which of the following depreciation methods?
Straight-line Productive Output
a. Yes No
b. Yes Yes
c. No Yes
d. No No
Question 30: Floozy Company acquired a tract of land
containing an extractable
natural resource. Floozy is required by the purchase contract to
restore the
land to a condition suitable for recreational use after it has
extracted the
natural resource. Geological surveys estimate that the
recoverable reserves
will be 4,000,000 tons, and that the land will have a value of
$600,000 after
restoration. Relevant cost information follows:
Land $6,400,000

36. Estimated restoration costs 1,200,000
If Floozy maintains no inventories of extracted material, what
should be the
charge to depletion expense per ton of extracted material?
a. $1.60
b. $1.75
c. $2.00
d. $1.90
Question 31: In January 2014, Floozy Mining Corporation
purchased a mineral
mine for $6,300,000 with removable ore estimated by geological
surveys at
2,500,000 tons. The property has an estimated value of
$600,000 after the ore
has been extracted. Floozy incurred $1,725,000 of development
costs
preparing the property for the extraction of ore. During 2014,
390,000 tons
were removed and 350,000 tons were sold. For the year ended
December 31,
2014, Floozy should include what amount of depletion in its
cost of goods
sold?
a. $798,000
b. $889,200
c. $1,039,500
d. $1,158,000
Question 32: Floozy Co. bought a patent from Flam Corp. on
January 1, 2015, for

37. $600,000. An independent consultant retained by Floozy
estimated that the
remaining useful life at January 1, 2015 is 15 years. Its
unamortized cost on
Flam’s accounting records was $300,000; the patent had been
amortized for
5 years by Flam. How much should be amortized for the year
ended
December 31, 2015 by Floozy Co.?
a. $0.
b. $30,000.
c. $40,000.
d. $60,000.
Question 33: On January 1, 2011, Flam Company purchased a
copyright for
$1,500,000, having an estimated useful life of 16 years. In
January 2015,
Flam paid $225,000 for legal fees in a successful defense of the
copyright.
Copyright amortization expense for the year ended December
31, 2015,
should be
a. $0.
b. $93,750.
c. $107,812.
d. $112,500.