ACC 421 Final Exam WileyPlus

ACC 421 Final Exam WileyPlus
1.
Transactions for Mehta Company for the month of May
are presented below. Prepare journal entries for each of these transactions.
2.On July 1, 2012, Crowe Co. pays $19,628 to Zubin
Insurance Co. for a 3-year insurance contract. Both companies have fiscal years
ending December 31. For Crowe Co. journalize the entry on July 1 and the
adjusting entry on December 31.
3.Dresser Company’s weekly payroll, paid on Fridays,
totals $6,600. Employees work a 5-day week. Prepare Dresser’s adjusting entry
on Wednesday, December 31, and the journal entry to record the $6,600 cash
payment on Friday, January 2.
4.Side Kicks has year-end account balances of Sales
$890,660; Interest Revenue $16,870; Cost of Goods Sold $557,320; Operating
Expenses $207,440; Income Tax Expense $36,370; and Dividends $20,744. Prepare
the year-end closing entries.
5.Financial information exhibits the
characteristic of consistency when

6.What is the
relationship between the Securities and Exchange Commission and accounting
standard setting in the United States?

7. Starr Co. had
sales revenue of $632,600 in 2012. Other items recorded during the year were:
Prepare
a single-step income statement for Allen for 2012. Allen has 100,000 shares of
stock outstanding.
8.Portman
Corporation has retained earnings of $752,650 at January 1, 2012. Net income
during 2012 was $1,751,960, and cash dividends declared and paid during 2012
totaled $78,100. Prepare a retained earnings statement for the year ended
December 31, 2012. Assume an error was discovered: land costing $87,490 (net of
tax) was charged to repairs expense in 2009.
9.On January 1,
2012, Richards Inc. had cash and common stock of $63,790. At that date the
company had no other asset, liability or equity balances. On January 2, 2012,
it purchased for cash $24,120 of equity securities that it classified as
available-for-sale. It received cash dividends of $4,560 net of tax during
the year on these securities. In addition, it has an unrealized holding gain on
these securities of $5,380 net of tax. Determine the following amounts for
2012: (a) net income; (b) comprehensive income; (c) other comprehensive income;
and (d) accumulated other comprehensive income (end of 2012).

10. Armstrong
Corporation reported the following for 2012: net sales $1,227,100; cost of
goods sold $762,000; selling and administrative expenses $324,800; and an
unrealized holding gain on available-for-sale securities $23,800. Prepare a
statement of comprehensive income, using the two-income statement format.
Ignore income taxes and earnings per share.
11. Guillen, Inc.
began work on a $7,160,800 contract in 2012 to construct an office building.
Guillen uses the completed-contract method. At December 31, 2012, the balances
in certain accounts were construction in process $1,751,500; accounts
receivable $245,100; and billings on construction in process $1,077,500.
Indicate how these accounts would be reported in Guillen’s December 31, 2012,
balance sheet.
12.Lazaro, Inc. sells goods on the installment
basis and uses the installment-sales method. Due to a customer default, Lazaro
repossessed merchandise that was originally sold for $980, resulting in a gross
profit rate of 40%. At the time of repossession, the uncollected balance is
$680, and the fair value of the repossessed merchandise is $288. Prepare
Lazaro’s entry to record the repossession.
13.Harding
Corporation has the following accounts included in its December 31, 2012, trial
balance: Accounts Receivable $116,120; Inventories $295,100; Allowance for
Doubtful Accounts $8,680; Patents $78,220; Prepaid Insurance $9,870; Accounts
Payable $77,710; Cash $36,400. Prepare the current assets section of the
balance sheet listing the accounts in proper sequence.
14.Patrick Corporation’s adjusted trial
balance contained the following asset accounts at December 31, 2012: Prepaid
Rent $20,000; Goodwill $58,610; Franchise Fees Receivable $4,340; Franchises
$43,080; Patents $36,100; Trademarks $11,620. Prepare the intangible assets
section of the balance sheet.
15.Hawthorn
Corporation’s adjusted trial balance contained the following accounts at
December 31, 2012: Retained Earnings $126,560; Common Stock $707,140; Bonds
Payable $101,750; Additional Paid-in Capital $203,770; Goodwill $58,010; Accumulated
Other Comprehensive Loss $153,850. Prepare the stockholders’ equity section of
the balance sheet.
16.Keyser Beverage
Company reported the following items in the most recent year.
17.Linden Corporation is preparing its
December 31, 2012, financial statements. Two events that occurred between
December 31, 2012, and March 10, 2013, when the statements were issued, are
described below.
A liability,
estimated at $157,050 at December 31, 2012, was settled on February 26,
2013, at $175,160.A flood loss
of $78,580 occurred on March 1, 2013.
What
effect do these subsequent events have on 2012 net income?

18.Roder Corporation has seven industry
segments with total revenues as follows. Based only on the total revenues test,
which industry segments are reportable? Enter 1 if the segment is reportable.
Enter 0 if the segment is not reportable.

19. Operating profits
and losses for the seven industry segments of Roder Corporation are:
Based
only on the operating profit (loss) test, which industry segments are
reportable?
Enter
1 if the segment is reportable. Enter 0 if the segment is not reportable.

21.Heartland Company’s budgeted sales and
budgeted cost of goods sold for the coming year are $143,870,000 and
$31,464,000 respectively. Short-term interest rates are expected to average
10%. If Heartland can increase inventory turnover from its present level of 9
times a year to a level of 12 times per year, compute its expected cost savings
for the coming year.

23.Ames Company reported 2012 net income of $153,850.
During 2012, accounts receivable increased by $13,740 and accounts payable
increased by $9,970. Depreciation expense was $40,990. Prepare the cash flows
from operating activities section of the statement of cash flows.
24.Martinez Corporation engaged in the following cash
transactions during 2012. Compute the net cash provided (used) by investing
activities.
25:Martinez Corporation engaged in the following cash
transactions during 2012. Determine Martinez’s free cash flow, assuming that it
reported net cash provided by operating activities of $401,270.
26(Preparation of a Statement of Cash Flows)
(a)
comparative balance sheet for Orozco Corporation is presented below.
(b).Determine Orozco Corporation’s current cash debt coverage
ratio, cash debt coverage ratio, and free cash flow

27.Chris Spear invested $11,798 today in a
fund that earns 12% compounded annually. To what amount will the investment
grow in 3 years? To what amount would the investment grow in 3 years if the
fund earns 12% annual interest compounded semiannually?
28.Amy Monroe wants
to create a fund today that will enable her to withdraw $25,780 per year for 8
years, with the first withdrawal to take place 5 years from today. If the fund
earns 10% interest, how much must Amy invest today?
29. Zach Taylor is
settling a $25,000 loan due today by making 6 equal annual payments of
$5,909.41. What payments must Zach Taylor make to settle the loan at the
interest rate of 11%, but with the 6 payments beginning on the day the loan is
signed?
30.(Simple
and Compound Interest Computations)
Lyle
O ‘Keefe invests $25,900 at 8% annual interest, leaving the money invested
without withdrawing any of the interest for 8 years. At the end of the 8 years,
Lyle withdrew the accumulated amount of money.
a). Compute
the amount Lyle would withdraw assuming the investment earns simple interest.
b). Compute
the amount Lyle would withdraw assuming the investment earns interest
compounded annually. (Round
to 2 decimal places, e.g. 25,250.25. Hint: Use tables in text.)
c. Compute the amount Lyle would
withdraw assuming the investment earns interest compounded semiannually. (Round to 2 decimal places, e.g. 25,250.25.
Hint: Use tables in text.)