ACC 421 Final Exam

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ACC 421 Final Exam | Assignment Help | University Of Phoenix

University of Phoenix / ACC 421
18 Sep 2018
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ACC 421 Final Exam | Assignment Help | University Of Phoenix

Question 1

Your answer is partially correct.

The following data relate to the accounts of Edmiston Company.

a. Unpaid salaries and wages at year-end amount to $750.

b. Edmiston Company owns bonds of another corporation that pay annual interest of $800. These bonds were purchased on April 1, 2017, and the next interest payment will be received on April 1, 2018.

c. A two-year insurance policy was purchased on June 1, 2017. The $1,200 insurance premium was paid on that date and was debited to Prepaid Insurance.

d. Service Revenue was credited for $900 on June 1, 2017. The amount represents a one-year advance payment for services to be performed by Edminston Company through May 31, 2018.

e. The Supplies account shows a balance of $2,500 on December 31, 2017. A physical count of the supplies on hand at this date reveals a total of $1,000 available.

Prepare the necessary adjusting journal entries indicated by each item for the year ended December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Question 2

Your answer is partially correct.

The adjusted trial balance of Ryan Financial Planners appears below.

Using the information from the adjusted trial balance, you are to prepare for the month ending December 31:

Question 3

Your answer is correct.

. Do not indent manually.)

Aug. 2 Invested $12,650 cash and $2,290 of equipment in the business.

7 Purchased supplies o

Sunland Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered n account for $460. (Debit asset account.)

12 Performed services for clients, for which $1,223 was collected in cash and $609 was billed to the clients.

15 Paid August rent $603.

19 Counted supplies and determined that only $288 of the supplies purchased on August 7 are still on hand.

Question 4

Your answer is correct.

Included in Ayayai Company’s December 31 trial balance is a note receivable of $8,160. The note is a 4-month, 10% note dated October 1. Prepare Ayayai’s December 31 adjusting entry to record $204 of accrued interest, and the February 1 journal entry to record receipt of $8,432 from the borrower. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Question 5

Your answer is partially correct.

Ayayai Corporation had net sales of $2,414,200 and interest revenue of $35,800 during 2017. Expenses for 2017 were cost of goods sold $1,459,300, administrative expenses $221,600, selling expenses $284,400, and interest expense $54,200. Ayayai’s tax rate is 30%. The corporation had 103,500 shares of common stock authorized and 74,490 shares issued and outstanding during 2017. Prepare a condensed multiple-step income statement for Ayayai Corporation

RYAN FINANCIAL PLANNERS Adjusted T rial Balance December 31, 2017
	Debit		Credit
Cash		$2,730
Accounts Receivable		2,120
Supplies		1,820
Equipment		15,000
Accumulated Depreciation—Equipment				$3,750
Accounts Payable				3,290
Unearned Service Revenue				3,360
Common Stock				10,000
Retained Earnings				4,450
Dividends		1,500
Service Revenue				4,360
Supplies Expense		520
Depreciation Expense		2,570
Rent Expense		2,950
		$29,210		$29,210

Question 6

Your answer is partially correct.

Presented below is information related to Nash Company at December 31, 2017, the end of its first year of operations.

Sales revenue $286,540

Cost of goods sold 133,170

Selling and administrative expenses 49,100

Gain on sale of plant assets 30,150

Unrealized gain on available-for-sale investments 9,150

Interest expense 6,040

Loss on discontinued operations 11,320

Dividends declared and paid 5,230

Compute the following:

(a) Income from operations $ 134420

(b) Net income $ 117060

(d) Retained earnings balance at December 31, 2017 $ 111830

Question 7

Your answer is correct.

Bramble Company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable, based on an aging analysis. In 2017, Bramble decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $387,500 instead of $296,300. In 2017, bad debt expense will be $135,300 instead of $92,180. If Bramble’s tax rate is 28%, what amount should it report as the cumulative effect of changing the estimated bad debt rate? (Do not leave any answer field blank. Enter 0 for amounts.)

Question 8

	Your answer is correct.

Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings

	Increase (Decrease)			Increase (Decrease)
Cash		$28,860	Accounts payable		$33,370
Accounts receivable (net)		(17,940)	Bonds payable		(18,260)
Inventory		51,550	Common stock		63,960
Plant assets (net)		46,010	Paid-in capital		16,210

The only entries in Retained Earnings were for net income and a dividend declaration of $16,200.

Question 8

Your answer is correct.

Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings.

Question 9

	Your answer is correct.

The Blue, Inc. sold 9,400 season tickets at $2,060 each. By December 31, 2017, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2017?

Question 10

Your answer is correct.

Waterway Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2017: Cash $9,750, Land $45,600, Patents $17,100, Accounts Receivable $94,270, Prepaid Insurance $5,640, Inventory $39,400, Allowance for Doubtful Accounts $4,500, and Equity Investments (to be sold in the next quarter) $11,570.

Prepare the current assets section of the balance sheet.

Question 10

Your answer is correct.

Prepare the current assets section of the balance sheet.

Question 12

Your answer is correct.

Included in Pharoah Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable $247,900, Pension Liability $379,500, Discount on Bonds Payable $36,200, Unearned Rent Revenue $43,000, Bonds Payable $402,000, Salaries and Wages Payable $31,600, Interest Payable $15,140, and Income Taxes Payable $37,700.

Prepare the long-term liabilities section of the balance sheet

Question 13

Your answer is partially correct.

Bridgeport Company reported 2017 net income of $153,600. During 2017, accounts receivable increased by $14,530 and accounts payable increased by $9,844. Depreciation expense was $41,500.

Prepare the cash flows from operating activities section of the statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Question 14

Your answer is partially correct.

Crane Corporation engaged in the following cash transactions during 2017.

Sale of land and building $194,000

Purchase of treasury stock 46,600

Purchase of land 37,400

Payment of cash dividend 89,200

Purchase of equipment 53,400

Issuance of common stock 155,400

Retirement of bonds 104,500

Compute the net cash provided (used) by investing activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Question 15

Your answer is partially correct.

Vaughn Corporation engaged in the following cash transactions during 2017.

Sale of land and building $181,200

Purchase of treasury stock 46,500

Purchase of land 46,200

Payment of cash dividend 87,800

Purchase of equipment 57,400

Issuance of common stock 149,300

Retirement of bonds 108,500

Compute the net cash used (provided) by financing activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Question 16

Your answer is correct.

Henry Bautista needs $26,700 in 8 years.

Click here to view factor tables

What amount must he invest today if his investment earns 12% compounded annually? What amount must he invest if his investment earns 12% annual interest compounded quarterly? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.)

Question 17

Your answer is correct.

Alan Madison needs $360,900 in 10 years.

Click here to view factor tables

How much must he invest at the end of each year, at 8% interest, to meet his needs? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.)

Question 18

Your answer is correct.

Coronado Inc. issues $2,047,300 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%.

Click here to view factor tables

What amount will Coronado receive when it issues the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.)

Question 19

Your answer is partially correct.

The Windsor Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Windsor has decided to locate a new factory in the Panama City area. Windsor will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.

Building A: Purchase for a cash price of $615,000, useful life 28 years.

Building B: Lease for 28 years with annual lease payments of $71,570 being made at the beginning of the year.

Building C: Purchase for $659,900 cash. This building is larger than needed; however, the excess space can be sublet for 28 years at a net annual rental of $6,870. Rental payments will be received at the end of each year. The Windsor Inc. has no aversion to being a landlord.

Click here to view factor tables

In which building would you recommend that The Windsor Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Question 20

Your answer is partially correct.

On May 10, 2017, Buffalo Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2017. Greig agrees to pay the full contract price of $1,940 on July 15, 2017. The cost of the goods is $1,230. Buffalo delivers the product to Greig on June 15, 2017, and receives payment on July 15, 2017. Prepare the journal entries for Buffalo related to this contract. Either party may terminate the contract without compensation until one of the parties performs. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Question 21

Your answer is partially correct.

Presented below are three revenue recognition situations.

(a) Groupo sells goods to MTN for $932,000, payment due at delivery.

(b) Groupo sells goods on account to Grifols for $753,000, payment due in 30 days.

(c) Groupo sells goods to Magnus for $537,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $499,700.

Indicate the transaction price for each of these situations and when revenue will be recognized.

Question 22
Your answer is partially correct.

On March 1, 2017, Stellar Company sold goods to Goosen Inc. for $702,000 in exchange for a 5-year, zero-interest-bearing note in the face amount of $1,080,114 (an inputed rate of 9%). The goods have an inventory cost on Stellar’s books of $374,000.

(a) Prepare the journal entries for Stellar on March 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

(b) Prepare the journal entries for Stellar on December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Question 23

Your answer is correct.

On July 10, 2017, Sunland Music sold CDs to retailers on account and recorded sales revenue of $644,000 (cost $502,320). Sunland grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2017, retailers returned CDs to Sunland and were granted credit of $78,600.

Prepare Sunland’s journal entries to record (a) the sale on July 10, 2017, and (b) $78,600 of returns on October 11, 2017, and on October 31, 2017. Assume that Sunland prepares financial statement on October 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.

Question 24

Your answer is correct.

Classify the following items as (1) operating, (2) investing, (3) financing, or (4) significant noncash investing and financing activities, using the direct method

Question 25

Your answer is partially correct.

Novak Corporation is preparing its 2017 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2017 statement of cash flows

Code Letter		Effect
A		Added to net income in the operating section
D		Deducted from net income in the operating section
R-I		Cash receipt in investing section
P-I		Cash payment in investing section
R-F		Cash receipt in financing section
P-F		Cash payment in financing section
N		Noncash investing and financing activity

Question 26

Your answer is correct.

Sheridan Corporation had January 1 and December 31 balances as follows

1/1/17 12/31/17

Inventory $90,000 $105,000

Accounts payable 47,000 56,000

For 2017, cost of goods sold was $597,000.

Compute Sheridan’s 2017 cash payments to suppliers.

Question 27

Your answer is correct.In 2017, Monty Corporation had net cash provided by operating activities of $486,000, net cash used by investing activities of $932,000, and net cash provided by financing activities of $559,000. At January 1, 2017, the cash balance was $300,000

Compute December 31, 2017, cash.

Question 28

Your answer is correct.

Sheridan Corporation had the following 2017 income statement.

Revenues		$102,000
Expenses		57,000
		$45,000

In 2017, Sheridan had the following activity in selected accounts.

(a) Prepare Sheridan’s cash flows from operating activities section of the statement of cash flows using the direct method.

(b) Prepare Sheridan’s cash flows from operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Question 29

Your answer is partially correct.

Answer each of the questions in the following unrelated situations.

(a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $489,000, what is the amount of current liabilities?

(b) A company had an average inventory last year of $218,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (Round answer to 0 decimal places, e.g. 125.)

(c) A company has current assets of $86,000 (of which $39,000 is inventory and prepaid items) and current liabilities of $39,000. What is the current ratio? What is the acid-test ratio? If the company borrows $17,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.)

(d) A company has current assets of $612,000 and current liabilities of $253,000. The board of directors declares a cash dividend of $193,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, e.g. 2.50.)

Question 30

Your answer is partially correct.

Wildhorse Company is involved in four separate industries. The following information is available for each of the four industries.

Operating Segment	Total Revenue	Operating Profit (Loss)	Identifiable Assets
W	$61,364	$16,390	$162,806
X	10,570	2,520	81,403
Y	26,450	(3,190)	19,649
Z	7,416	1,180	16,842
	$105,800	$16,900	$280,700

Determine which of the operating segments are reportable based on the:

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