Research Paper Excellence: Accounting Dissertation Support
1. 71. The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a.
71. The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a balance sheet and which is based on an estimate of bad debts, is an application of the
a.consistency characteristic.
b.matching principle.
c.materiality constraint.
d.revenue recognition principle.
72. The accounting principle of matching is best demonstrated by
a.not recognizing any expense unless some revenue is realized.
b.associating effort (expense) with accomplishment (revenue).
c.recognizing prepaid rent received as revenue.
d.establishing an Appropriation for Contingencies account.
73. Which of the following serves as the justification for the periodic recording of depreciation expense?
a.Association of efforts (expense) with accomplishments (revenue)
b.Systematic and rational allocation of cost over the periods benefited
c.Immediate recognition of an expense
d.Minimization of income tax liability
74. Application of the full disclosure principle
a.is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits.
b.is violated when important financial information is buried in the notes to the financial statements.
c.is demonstrated by the use of supplementary information presenting the effects of changing prices.
d.requires that the financial statements be consistent and comparable.
75. Which of the following statements concerning the cost-benefit relationship is not true?
a.Business reporting should exclude information outside of management's expertise.
b.Management should not be required to report information that would significantly harm the company's competitive position.
c.Management should not be required to provide forecasted financial information.
d.If needed by financial statement users, management should gather information not included in the financial statements that would not otherwise be gathered for internal use.
76. Under Statement of Financial Accounting Concepts No. 2, which of the following relates to both relevance and reliability?
a.Cost-benefit constraint
b.Predictive value
c.Verifiability
d.Representational faithfulness
77. Charging off the cost of a wastebasket with an estimated useful life of 10 years as an expense of the period when purchased is an example of the application of the
a.consistency characteristic.
b.matching principle.
c.materiality constraint.
d.historical cost principle.
78. Which of the following statements about materiality is not correct?
a.An item must make a difference or it need not be disclosed.
b.Materiality is a matter of relative size or importance.
c.An item is material if its inclusion or omission would influence or change the judgment of a reasonable person.
d. All of these are correct statements about materiality.
79. Which of the following are considered pervasive constraints by Statement of Financial Accounting Concepts No. 2?
a.Cost-benefit relationship and conservatism
b.Timeliness and feedback value
c.Conservatism and verifiability
d.Materiality and cost-benefit relationship
80. The basic accounting concept that refers to the tendency of accountants to resolve uncertainty in favor of understating assets and revenues and overstating liabilities and expenses is known as the
a.conservatism constraint.
b.materiality constraint.
c.substance over form principle.
d.industry practices constraint.
2. What factors should be considered in selecting a base to be used in computing the predetermined...
What factors should be considered in selecting a base to be used in computing the predetermined overhead rate?
What factors should be considered in selecting a base to
3. Little Theatre is a nonprofit organization devoted to staging plays for children....
Little Theatre is a nonprofit organization devoted to staging plays for children. The theater has a very small full-time professional administrative staff. Through a special arrangement with the actors’ union, actors and directors rehearse without pay and are paid only for actual performances.
The costs from the current year’s planning budget appear below. The Little Theatre had tentatively planned to put on six different productions with a total of 108 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend.
The Little Theatre | |
Costs from the Planning Budget | |
For the Year Ended December 31 | |
Budgeted number of productions | 6 |
Budgeted number of performances | 108 |
Actors' and directors' wages | $216,000 |
Stagehands' wages | 32,400 |
Ticket booth personnel and ushers' wages | 16,200 |
Scenery, costumes, and props | 108,000 |
Theatre hall rent | 54,000 |
Printed programs | 27,000 |
Publicity | 12,000 |
Administrative expenses | 43,200 |
Total | $508,800 |
Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesn’t make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. The greater the number of performances, the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to pin down, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances.
After the beginning of the year, the board of directors of the theater authorized expanding the theater’s program to seven productions and a total of 168 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget. (Grants from donors and ticket sales were also correspondingly higher, but are not shown here.) Data concerning the actual costs appear on the following page:
Required:
1. Prepare a flexible budget for The Little Theatre based on the actual activity of the year.
2. Prepare a flexible budget performance report for the year that shows both activity variances and spending variances.
3. If you were on the board of directors of the theater, would you be pleased with how well costs were controlled during the year? Why, or why not?
4. The cost formulas provide figures for the average cost per production and average cost per performance. How accurate do you think these figures would be for predicting the cost of a new production or of an additional performance of a particularproduction?
4. Determine the missing amounts in each of the following independent cases. Case A Case B Case C...
Determine the missing amounts in each of the following independent cases.
Case A Case B Case C
5. The following accounts come from the ledger of Snow Go Company at December31, 2010
1. The following accounts come from the ledger of Snow Go Company at December31, 2010.
157 | Equipment | $88,000 | 301 | Roberts, Capital | $20,000 |
306 | Roberts, Drawing | 8,000 | 212 | Salaries Payable | 2,000 |
201 | Accounts Payable | 22,000 | 200 | Notes Payable | 19,000 |
726 | Salaries Expense | 42,000 | 722 | Insurance Expense | 3,000 |
112 | Accounts Receivable | 4,000 | 130 | Prepaid Insurance | 6,000 |
400 | Service Revenue | 95,000 | 101 | Cash | 7,000 |
Prepare a trial balance in good form.
6. Spooner Corporation's next dividend is expected to be $6 Dividend growth is estimated at 25%, 20%...
Spooner Corporation's next dividend is expected to be $6 Dividend growth is estimated at 25%, 20%, 10% and then stabilize to 3%. If the rate of return is 10%. determine the stock price today. a $124.67 b. $95 12 c. $95.42 d. $95 82 e. $96.12 Which of the following is NOT a legitimate real-world consideration for a share repurchase'' a. The firm's management wants to raise its earnings per share. b. Capital gains arc more favourably taxed than dividends. c. The firm's management thinks that the firm's shares are undervalued. d. Altering the firm's capital structure. e. Protection against takeover attempt. Given the following information for Clove Incorporated, how many times does the firm turnover its inventory during the year"1 (Use average inventory, receivables, and payables in your calculations) a. 5.8 times b. 9.5 times c. 38 5 days d. 383 days e. 12.6 times
7. Effects on accounting equation
Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?
A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase
B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect
C. A...
8. Shipping costs at Columbia Mining Company are a mixture of variable and fixed components
Shipping costs at Columbia Mining Company are a mixture of variable and fixed components. The company shipped 8,000 tons of coal for $400,000 in shipping costs in February and 10,000 tons for $499,000 in March. Assuming that this activity is within the relevant range, expected shipping cost for 11,000 tons would be:
a) $548,500
b) $422,222
c) $554,000
d) $544,500
A company that wishes to increase its ROE should consider reducing its selling prices by 10% so as to boost sales and market share. cutting its dividend, so as to boost retained earnings. repurchasing shares of common stock. paying off its long-term debt, so as to reduce interest costs. actions to boost its credit rating to A+.
10. answer and show your solution Problem 18-9 (AICPA Adapted) Grant Company acquired 30 % of South Comp
share capital for P2,000,000 on January 1, 2019. Grant's 30% interest in South gave Grant the ability to exercise significant influence over South's operating and financial policies During 2019, South earned P1,500,000 and paid dividends of P500,000 South reported earnings of P1,000,000 for the six months ended June 30, 2020, and P2,500,000 for the year ended December 31, 2020 but paid dividend of P1,000,000 on October 1, 2020. On July 1, 2020, Grant sold half of the investment in South for P2,000,000 cash On such date, the investment is measured at fair value through profit or loss. The fair value of the retained investment is P2,200,000 on July 1, 2020 and P2,400,000 on December 31, 2020. 1. What amount should be recognized as investment income for 2019 as a result of the investment? 150,000 b. 450,000 c. 500,000 d. 750,000 ?. 2. In the December 31, 2019 statement of financial position, what is the carrying amount of the investment? 2,000,000 b. 2,450,000 c. 2,600,000 d. 2,300,000 ?. 3. What total amount of income should be reported for 2020? a. 2,250,000 b. 2,100,000 c. 1,950,000 d. 2,050,000 475
Problem 10
Jal Bharat commenced a voyage on 1st October, 2006 from Chennai to London and
back. The voyage was completed on 30th November, 2006. It carried a consignment
on its outward journey and of machinery on its return journey. The ship was insured
and the annual premium was Rs. 24,000. Prepare voyage account from the following
information:
12. 111. Langley Company reported the following on its income statement: Income before income...
111. Langley Company reported the following on its income statement:
Income before income taxes$420,000
Income tax expense 120,000
Net income$300,000
An analysis of the income statement revealed that interest expense was $80,000. Langley Company's times interest earned was
A. 8 times.
B. 6.25 times.
C. 5.25 times.
D. 5 times.
112. The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets
Cash and short-term investments $ 40,000
Accounts receivable (net) 30,000
Inventory 25,000
Property, plant and equipment 215,000
Total Assets$310,000
Liabilities and Stockholders’ Equity
Current liabilities $ 60,000
Long-term liabilities 95,000
Stockholders’ equity-common 155,000
Total Liabilities and stockholders’ equity$310,000
Income Statement
Sales $ 90,000
Cost of goods sold 45,000
Gross margin 45,000
Operating expenses 20,000
Net income$ 25,000
Number of shares of common stock6,000
Market price of common stock$20
What is the current ratio for this company?
A. 1.42%
B. .78%
C. 1.58%
D. .67%
113. Based on the following data, what is the amount of quick assets?
Accounts payable$ 30,000
Accounts receivable65,000
Accrued liabilities7,000
Cash25,000
Intangible assets40,000
Inventory72,000
Long-term investments100,000
Long-term liabilities75,000
Marketable securities36,000
Notes payable (short-term)20,000
Property, plant, and equipment625,000
Prepaid expenses2,000
A. $198,000
B. $126,000
C. $90,000
D. $61,000
114. Based on the following data, what is the amount of working capital?
Accounts payable$ 30,000
Accounts receivable65,000
Accrued liabilities7,000
Cash25,000
Intangible assets40,000
Inventory72,000
Long-term investments100,000
Long-term liabilities75,000
Marketable securities36,000
Notes payable (short-term)20,000
Property, plant, and equipment625,000
Prepaid expenses2,000
A. $243,000
B. $143,000
C. $183,000
D. $69,000
115. Based on the following data, what is the quick ratio, rounded to one decimal point?
Accounts payable$ 30,000
Accounts receivable65,000
Accrued liabilities7,000
Cash25,000
Intangible assets40,000
Inventory72,000
Long-term investments100,000
Long-term liabilities75,000
Marketable securities36,000
Notes payable (short-term)20,000
Property, plant, and equipment625,000
Prepaid expenses2,000
A. 2.2
B. 3.5
C. 3.0
D. 1.6
116. The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is sometimes referred to as
A. leverage
B. solvency
C. yield
D. quick assets
117. The balance sheets at the end of each of the first two years of operations indicate the following:
20062005
Total current assets$600,000$560,000
Total investments60,00040,000
Total property, plant, and equipment900,000700,000
Total current liabilities150,00080,000
Total long-term liabilities350,000250,000
Preferred 9% stock, $100 par100,000100,000
Common stock, $10 par600,000600,000
Paid-in capital in excess of par-common stock60,00060,000
Retained earnings325,000210,000
If net income is $115,000 and interest expense is $30,000 for 2006 what is the rate earned on total assets for 2006 (round percent to one decimal point)?
A. 9.3%
B. 10.1%
C. 8.0%
D. 7.4%
118. The balance sheets at the end of each of the first two years of operations indicate the following:
20062005
Total current assets$600,000$560,000
Total investments60,00040,000
Total property, plant, and equipment900,000700,000
Total current liabilities150,00080,000
Total long-term liabilities350,000250,000
Preferred 9% stock, $100 par100,000100,000
Common stock, $10 par600,000600,000
Paid-in capital in excess of par-common stock60,00060,000
Retained earnings325,000210,000
If net income is $115,000 and interest expense is $30,000 for 2006, what is the rate earned on stockholders' equity for 2006 (round percent to one decimal point)?
A. 10.6%
B. 11.2%
C. 12.4%
D. 15.6%
119. The balance sheets at the end of each of the first two years of operations indicate the following:
20062005
Total current assets$600,000$560,000
Total investments60,00040,000
Total property, plant, and equipment900,000700,000
Total current liabilities150,00080,000
Total long-term liabilities350,000250,000
Preferred 9% stock, $100 par100,000100,000
Common stock, $10 par600,000600,000
Paid-in capital in excess of par-common stock60,00060,000
Retained earnings325,000210,000
If net income is $115,000 and interest expense is $30,000 for 2006, what are the earnings per share on common stock for 2006, (round to two decimal places)?
A. $1.92
B. $1.89
C. $1.77
D. $1.42
120. The balance sheets at the end of each of the first two years of operations indicate the following:
20062005
Total current assets$600,000$560,000
Total investments60,00040,000
Total property, plant, and equipment900,000700,000
Total current liabilities150,00080,000
Total long-term liabilities350,000250,000
Preferred 9% stock, $100 par100,000100,000
Common stock, $10 par600,000600,000
Paid-in capital in excess of par-common stock60,00060,000
Retained earnings325,000210,000
If net income is $115,000 and interest expense is $30,000 for 2006, and the market price is $30, What is the price-earnings ratio on common stock for 2006. (round to one decimal point)?
A. 17.0
B. 12.1
C. 12.4
D. 15.9
Abernathy Corporation was organized on January 1, 2019. It is authorized to issue 10,000 shares of 8%, $50 par value preference shares, and 500,000 shares of no-par ordinary shares with a stated value of $2 per share. The following share transactions were completed during the first year.
Jan. 10 Issued 80,000 ordinary shares for cash at $5 per share.
Mar. 1 Issued 5,000 preference shares for cash at $108 per share.
Apr. 1 Issued 24,000 ordinary shares for land. The asking price of the land was $90,000; the fair value of the land was $80,000.
May 1 Issued 80,000 ordinary shares for cash at $7 per share.
Aug. 1 Issued 10,000 ordinary shares to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize.
Sept. 1 Issued 10,000 ordinary shares for cash at $9 per share.
Nov. 1 Issued 1,000 preference shares for cash at $112 per share.
Instructions
Prepare the journal entries to record the above transactions.
Abernathy Corporation was organized on January 1 2019 It is
72.If an owner withdraws cash for personal use, the transaction should be recorded in the
a. sales journal.
b.cash receipts journal.
c.general journal.
d.cash payments journal.
73.If a company purchases merchandise for cash, the transaction should be recorded in the
a.purchases journal.
b.general journal.
c.cash payments journal.
d.sales journal.
74.Cash from sales of merchandise will be recorded in the
a.purchases journal.
b.sales journal.
c.cash receipts journal.
d.general journal.
75.Postings from the purchases journal to the general ledger are made
a.daily.
b.monthly.
c.weekly.
d.yearly.
76.The individual amounts in the Accounts Payable column in the cash payments journal are posted to the subsidiary ledger
a.daily.
b.monthly.
c.weekly.
d.yearly.
77.Debit postings to the individual accounts in an accounts receivable subsidiary ledger generally come from the
a.sales journal.
b.cash receipts journal.
c.purchases journal.
d.cash payments journal.
78.Entries in a sales journal are
a.posted only to accounts in an accounts receivable subsidiary ledger.
b.posted only to accounts in the general ledger.
c.posted to accounts in an accounts receivable subsidiary ledger and to accounts in the general ledger.
d.never posted.
79.Which one of the following columns in a cash receipts journal is not posted in total to an account in the general ledger?
a.Cash column
b.Sales Discount column
c.Accounts Receivable column
d.Other Accounts column
80.The use of special journals to record transactions
a.eliminates the need for a general ledger.
b.can save time in the posting process.
c.eliminates the need for a general journal.
d.should only be used if the volume of transactions is small.
81.Posting a sales journal to the accounts in the general ledger requires a
a.debit to Cash and a credit to Sales.
b.debit to Sales and a credit to Inventory.
c.debit to Accounts Receivable and a credit to Inventory.
d.debit to Accounts Receivable and a credit to Sales.