QUESTION 2: 14%<\/b><\/p>\n
FIFO LIFO INVENTORY<\/b><\/p>\n
In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 187 units at $11, (2) 481 units at $12, and (3) 133 units at $13.<\/p>\n
Assuming there are 300 units on hand, compute the cost of the ending inventory under the FIFO method and LIFO method. Bethke uses a periodic inventory system.<\/p>\n
<\/p>\n
FIFO<\/b><\/p>\n
<\/p>\n
LIFO<\/b><\/p>\n
The cost of the ending inventory<\/p>\n
<\/p>\n
$<\/p>\n
<\/p>\n
$<\/p>\n
QUESTION 3: 5%<\/b><\/p>\n
RECEIVABLES<\/b><\/p>\n
What is the difference between an account receivable and a note receivable?<\/p>\n
QUESTION 4: 9%<\/b><\/p>\n
PLANT ASSETS & DEPLETION<\/b><\/p>\n
Corales Company acquires a delivery truck at a cost of $79,800. The truck is expected to have a salvage value of $9,600 at the end of its 4-year useful life.<\/p>\n
Compute annual depreciation expense for the first and second years using the straight-line method.<\/p>\n
Annual depreciation for the first and second years<\/p>\n
<\/p>\n
$<\/p>\n
Franceour Mining Co. purchased for $7,107,600 a mine that is estimated to have 35,538,000 tons of ore and no salvage value. In the first year, 5,707,600 tons of ore are extracted and sold.<\/p>\n
<\/p>\n
Calculate depletion cost per ton. (Round answer to 2 decimal places, e.g. 0.50.)<\/b><\/p>\n
Depletion cost per ton<\/p>\n
<\/p>\n
$<\/p>\n
<\/p>\n
QUESTION 5: 7%<\/b><\/p>\n
PAYROLL<\/b><\/p>\n
Beth Corbin\u2019s regular hourly wage rate is $20, and she receives an hourly rate of $30 for work in excess of 40 hours. During a January pay period, Beth works 48 hours. Beth\u2019s federal income tax withholding is $96.00, and she has no voluntary deductions. Use January 15 for the end of the pay period and the payment date.<\/p>\n
Prepare the journal entries to record (a) Beth\u2019s pay for the period and (b) the payment of Beth\u2019s wages. (Assume FICA rate of 7.65%. Round your answers to 2 decimal places, e.g. 15.25. Credit account titles are automatically indented when amount is entered. Do not indent manually.)<\/b><\/p>\n
No.<\/b><\/p>\n
Date<\/b><\/p>\n
Account Titles and Explanation<\/b><\/p>\n
Debit<\/b><\/p>\n
Credit<\/b><\/p>\n
(a) <\/b><\/p>\n
Jan. 15<\/p>\n
<\/p>\n
(b) <\/b><\/p>\n
Jan. 15<\/p>\n
<\/p>\n
MULTIPLE CHOICE QUESTIONS\u201d 1% each<\/b><\/p>\n
(There is no QUESTION 6)<\/b><\/p>\n
Question 7: <\/b>When the stockholders invest cash in the business, what is the effect? <\/p>\n
a Liabilities increase and stockholders\u2019 equity increases <\/p>\n
b Both assets and liabilities increase <\/p>\n
c Both assets and stockholders\u2019 equity increase <\/p>\n
d None of the above<\/p>\n
Question 8: <\/b>The ending balance in retained earnings is shown in the: <\/p>\n
a. Income statement <\/p>\n
b. Statement of retained earnings <\/p>\n
c. Balance sheet <\/p>\n
d. Both (b) and (c) <\/p>\n
e. Both (a) and (c)<\/p>\n
f. (a), (b) and (c)<\/p>\n
Question 9: <\/b>A cash dividend of $500 was declared and paid to stockholders. The correct journal entry to record the declaration is:<\/p>\n
a. DR Capital stock 500 and CR Cash 500 <\/p>\n
b. DR Cash 500 and CR Dividends 500 <\/p>\n
c. DR Dividends 500 and CR Cash 500 <\/p>\n
d. DR Cash 500 and CR Capital stock 500<\/p>\n
Question 10: <\/b>If $3,000 has been earned by a company\u2019s workers since the last payday in an accounting period, the necessary adjusting entry would be: <\/p>\n
a. Debit an expense and credit a liability. <\/p>\n
b. Debit an expense and credit an asset. <\/p>\n
c. Debit a liability and credit an asset. <\/p>\n
d. Debit a liability and credit an expense.<\/p>\n
Question 11: <\/b>The accrual basis of accounting: <\/p>\n
a. Recognizes revenues only when cash is received <\/p>\n
b. Is used by almost all companies <\/p>\n
c. Recognizes expenses only when cash is paid out <\/p>\n
d. Recognizes revenues when sales are made or services are performed and recognizes expenses only when cash is paid out.<\/p>\n
Question 12: <\/b>The need for adjusting entries is based on: <\/p>\n
a. The matching principle <\/p>\n
b. Source documents<\/p>\n
c. The cash basis of accounting <\/p>\n
d. Activity that has already been recorded in the proper accounts.<\/p>\n
Question 13: <\/b>Which of the following statements is false regarding the closing process? <\/p>\n
a. The Dividends account is closed to Income Summary. <\/p>\n
b. The closing of expense accounts results in a debit to Income Summary. <\/p>\n
c. The closing of revenues results in a credit to Income Summary. <\/p>\n
d. The Income Summary account is closed to the Retained Earnings account. <\/p>\n
Question 14: <\/b>Which of the following statements is true regarding the classified balance sheet? <\/p>\n
a. Current assets include cash, accounts receivable, and equipment. <\/p>\n
b. Plant, property, and equipment is one category of long-term assets. <\/p>\n
c. Current liabilities include accounts payable, salaries payable, and notes receivable. <\/p>\n
d. Stockholders’ equity is subdivided into current and long-term categories.<\/p>\n
Question 15: <\/b>The underlying assumptions of accounting includes all the following except: <\/p>\n
a. Business entity <\/p>\n
b. Going concern <\/p>\n
c. Matching <\/p>\n
d. Money measurement and periodicity<\/p>\n
Question 16: <\/b>Frick Company began the accounting period with $60,000 of merchandise, and net cost of purchases was $240,000. A physical inventory showed $72,000 of merchandise unsold at the end of the period. The cost of goods sold of Frick Company for the period is: <\/p>\n
a. $300,000 <\/p>\n
b. $228,000 <\/p>\n
c. $252,000 <\/p>\n
d. $168,000 <\/p>\n
e. None of the above<\/p>\n
Question 17: <\/b>A classified income statement consists of all of the following major sections except for: <\/p>\n
a. Operating revenues <\/p>\n
b. Cost of goods sold <\/p>\n
c. Operating expenses <\/p>\n
d. Non-operating revenues and expenses <\/p>\n
e. Current assets<\/p>\n
Question 18: <\/b>A business purchased merchandise for $12,000 on account; terms are 2\/10, n\/30. If $2,000 of the merchandise was returned and the remaining amount due was paid within the discount period, the purchase discount would be: <\/p>\n
a. $240 <\/p>\n
b. $200 <\/p>\n
c. $1,200 <\/p>\n
d. $1,000 <\/p>\n
e. $3,600<\/p>\n
Question 19: <\/b>Frick Company began the accounting period with inventory of 3,000 units at $30 each. During the period, the company purchased an additional 5,000 units at $36 each and sold 4,600 units. Assume the use of periodic inventory procedure. The cost of ending inventory using weighted-average is: <\/p>\n
a. $114,750 <\/p>\n
b. $157,600 <\/p>\n
c. $122,400 <\/p>\n
d. $109,650 <\/p>\n
e. None of the above <\/p>\n
Question 20: <\/b>Frick Company began the accounting period with inventory of 3,000 units at $30 each. During the period, the company purchased an additional 5,000 units at $36 each and sold 4,600 units. Assume the use of periodic inventory procedure. The cost of goods sold using weighted-average is: <\/p>\n
a. $147,200 <\/p>\n
b. $160,350 <\/p>\n
c. $155,250 <\/p>\n
d. $114,000 <\/p>\n
e. None of the above<\/p>\n
Question 21: <\/b>During a period of rising prices, which inventory method might be expected to give the highest net income? <\/p>\n
a. Weighted-average <\/p>\n
b. FIFO <\/p>\n
c. LIFO <\/p>\n
d. Specific identification <\/p>\n
e. Cannot determine<\/p>\n
Question 22: <\/b>The following information: related to the bank reconciliation of the Flip Company: <\/p>\n
Balance per bank statement<\/p>\n
$1,951.20<\/p>\n
Balance per ledger<\/p>\n
1,869.60<\/p>\n
Deposits in transit<\/p>\n
271.20<\/p>\n
Outstanding checks<\/p>\n
427.80<\/p>\n
NSF check<\/p>\n
61.20<\/p>\n
Service charges<\/p>\n
13.80<\/p>\n
The adjusted\/correct cash balance is: <\/p>\n
a. $1,794.60 <\/p>\n
b. $1,719.60 <\/p>\n
c. $1,638.00 <\/p>\n
d. $1,713.00 <\/p>\n
e. $1,876.20 <\/p>\n
Question 23: <\/b>In a bank reconciliation, deposits in transit should be: <\/p>\n
a. nbsp; Deducted from the balance per books <\/p>\n
b. Deducted from the balance per bank statement <\/p>\n
c. Added to the balance per ledger <\/p>\n
d. Added to the balance per bank statement <\/p>\n
e. Disregarded in the bank reconciliation <\/p>\n
Question 24: <\/b>After the bank reconciliation is prepared, the entry to record bank service charges would have a credit to: <\/p>\n
a. Bank Service Charge Expense <\/p>\n
b. Cash <\/p>\n
c. Petty Cash <\/p>\n
d. Cash Short and Over <\/p>\n
e. None of the above <\/p>\n
Question 25: <\/b>Frick Company estimates uncollectible accounts using the percentage-of-receivables method and expects that 5 percent of outstanding receivables will be uncollectible for 2010. The balance in Accounts Receivable is $200,000, and the allowance account has a $3,000 credit balance before adjustment at year-end. The uncollectible accounts expense for 2010 will be: <\/p>\n
a $7,000 <\/p>\n
b. $10,000 <\/p>\n
c. $13,000 <\/p>\n
d. $9,850 <\/p>\n
e. None of the above<\/p>\n
Question 26: <\/b>Frick Company issued its own $10,000, 90-day, non interest-bearing note to a bank. If the note is discounted at 10 percent, the proceeds to Frick are: <\/p>\n
a. $10,000 <\/p>\n
b. $9,000 <\/p>\n
c. $9,750 <\/p>\n
d. $10,250 <\/p>\n
e. None of the above<\/p>\n
Question 27: <\/b>On 2010 July 1, Frick Company purchased equipment for $400,000, and installation and testing costs totaled $40,000. The equipment has an estimated useful life of 10 years and an estimated salvage value of $40,000. If Frick uses the double-declining-depreciation method, the depreciation expense for 2010 is:<\/p>\n
a. $88,000 <\/p>\n
b. $72,000 <\/p>\n
c. $36,000 <\/p>\n
d. $44,000 <\/p>\n
e. $40,000<\/p>\n
Question 28: <\/b>The result of recording a capital expenditure as a revenue expenditure is an: <\/p>\n
a. Overstatement of current year’s expense <\/p>\n
b. Understatement of current year’s expense <\/p>\n
c. Understatement of subsequent year’s net income <\/p>\n
d. Overstatement of current year’s net income <\/p>\n
e. None of the above<\/p>\n
Question 29: <\/b>A truck costing $45,000 and having an estimated salvage value of $4,500 and an original life of five years is exchanged for a new truck. The cash price of the new truck is $57,000, and a trade-in allowance of $22,500 is received. The old truck has been depreciated for three years using the straight-line method. The new truck would be recorded at: <\/p>\n
a. $55,200 <\/p>\n
b. $57,000 <\/p>\n
c. $34,500 <\/p>\n
d. $43,200 <\/p>\n
e. None of the above<\/p>\n
Question 30: <\/b>Which of the following is not an advantage of the corporate form of organization? <\/p>\n
a. Continuous existence of the entity <\/p>\n
b. Limited liability of stockholders <\/p>\n
c. Government regulation <\/p>\n
d. Easy transfer of ownership<\/p>\n
Question 31: <\/b>Treasury stock should be shown on the balance sheet as a(n): <\/p>\n
a. Reduction of the corporation’s stockholders’ equity <\/p>\n
b. Current asset<\/p>\n
c. Current liability <\/p>\n
d. Investment asset<\/p>\n","protected":false},"excerpt":{"rendered":"
QUESTION 2: 14% FIFO LIFO INVENTORY In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 187 units at $11, (2) 481 units at $12, and (3) 133 units at $13. Assuming there are 300 units on hand, compute the Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49951","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=49951"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49951\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=49951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=49951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=49951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}