Tips for Tackling Accounting Quizzes Successfully
27. In 2017, Margaret and John Murphy (age 66 and 68, respectively) are married taxpayers who file a...
In 2017, Margaret and John Murphy (age 66 and 68, respectively) are married taxpayers who file a joint tax return with AGl of $25,400. During the year they incurred the following expenses:
In addition, they drove 88 miles for medical transportation, and their insurance company reimbursed them $900 for the above expenses. On the following segment of Schedule A of Form 1040, calculate the Murphy's medical expense deduction
28. Which of the following statements about data flow diagrams is not true? a. Processes should always..
Which of the following statements about data flow diagrams is not true?
a. Processes should always be numbered and named.
b. A context diagram cannot include any data stores.
c. Data flows should be labeled with noun phrases.
d. Data flow diagrams incorporate four symbols.
In creating a data flow diagram for a course registration process, which of the following is
most likely to be an external entity?
a. Parents
b. Student
c. Registration system
d. Bank
29. A method of stock valuation seldom used by companies is a. Standard cost
A method of stock valuation seldom used by companies is
a. Standard cost
b. FIFO
c. LIFO
d. Weighted average cost
30. Suppose that on January 1, Roots Ltd . paid cash of $30,000 for computers that are expected to...
Suppose that on January 1, Roots Ltd . paid cash of $30,000 for computers that are expected to remain useful for three years. At the end of three years, the computers values are expected to be zero. 1. Make journal entries to record (a) the purchase of the computers on January 1, and (b) the annual depreciation on December 31. Include dates and explanations, and use the following accounts: Computer Equipment; Accumulated Depreciation-Computer Equipment; and Depreciation Expense-Computer Equipment. 2. Post to the accounts and show their balances at December 31. 3. What is the computers carrying amount at December 31? 4. Which account(s) will Roots report on the income statement for the year? Which accounts will appear on the balance sheet of December 31? Show the amount to report for each item on both financial statements.
31. Green Company purchased a piece of machinery on credit for $10,000. Briefly state the way this...
Green Company purchased a piece of machinery on credit for $10,000. Briefly state the way this transaction affects the company’s basic accounting equation.View Solution:
Green Company purchased a piece of machinery on credit for
32. Stockton Company Adjusted Trial Balance December 31, Cash Accounts Receivable Prepaid Expenses Eq...
Stockton Company Adjusted Trial Balance December 31, Cash Accounts Receivable Prepaid Expenses Equipment Accumulated Depreciation Accounts payable Notes Payable Common Stock Retained Earnings Dividends Fees Earned Wages Expense Rent Expense Utilities Expense Depreciation Expense Miscellaneous Expense 6,054 2,653 668 14,651 506 3,462 802 497 217 65 1,481 1,463 4,192 1,000 12,732 8,707
33. Turner Company ended its fiscal year on July 31, 2012.
Turner Company ended its fiscal year on July 31, 2012. The company’s adjusted trial balance as of the end of its fiscal year is as shown below.
Instructions
(a) Prepare the closing entries using page J15.
(b) Post to Owner’s Capital and No. 350 Income Summary accounts. (Use the three-column form.)
(c) Prepare a post-closing trial balance at July31.
34. Journalize the above transactions. Torrealba uses straight-line depreciation for buildings and...
At December 31, 2014, Torrealba Company reported the following as plant assets.
During 2015, the following selected cash transactions occurred.
Instructions
(a)Journalize the above transactions. Torrealba uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year useful life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.
(b)Record adjusting entries for depreciation for 2015.
(c)Prepare the plant assets section of Torrealba"s balance sheet at December 31, 2015.
35. Multiple choice
Question 1
The degree of operating leverage is computed as:
A. percent change in operating profit divided by percent change in net income.
B. percent change in volume divided by percent change in operating profit.
C. percent change in EPS divided by percent change in operating income.
D. percent change in operating income divided by percent change in volume.
Question 2
Financial leverage deals with:
A. the relationship of fixed and variable costs.
B. the relationship of debt and equity in the capital structure.
C. the entire income statement.
D. the entire balance sheet.
Question 3
A conservative financing plan involves:
A. heavy reliance on debt.
B. heavy reliance on equity.
C. high degree of financial leverage.
D. high degree of combined leverage.
Question 4
If EBIT equals $160,000 and interest equals $30,000, what is the degree of financial leverage?
A. 5.33x
B. 1.23x
C. 0.8125x
D. 4.33x
36. Applied overhead was 30% of total manufacturing costs. The Work in Process inventory at January 1...
Farber Corporation uses a job-order cost system. The information below is from the financial records ofthe company for last year:
Applied overhead was 30% of total manufacturing costs. The Work in Process inventory at January 1 was 75% of the Work in Process inventory at December 31. Farber Company"s total direct labor cost was:
A) $750,000
B) $600,000
C) $900,000
D) $937,500
37. Dobbs Wholesale Antiques makes all sales under terms of FOB
Dobbs Wholesale Antiques makes all sales under terms of FOB shipping point. The company usually ships inventory to customers approximately one week after receiving the order. For orders received late in December, Kathy Dobbs, the owner, decides when to ship the goods. If profits are already at an acceptable level, Dobbs delays shipment until January. If profits for the current year are lagging behind expectations, Dobbs ships the goods during December.
Requirements
1. Under Dobbs’ FOB policy, when should the company record a sale?
2. Do you approve or disapprove of Dobbs’ manner of deciding when to ship goods to customers and record the sales revenue? If you approve, give your reason. If you disapprove, identify a better way to decide when to ship goods. (There is no accounting rule against Dobbs’ practice.)
38. Which of the following is not a valuation technique used in fair value estimates?
Which of the following is not a valuation technique used in fair value estimates?
- Income approach.
- Residual value approach.
- Market approach.
- Cost approach.
39. (Bad-Debt Reporting) The chief accountant for Dickinson Corporation provides you with the following
(Bad-Debt Reporting) The chief accountant for Dickinson Corporation provides you with the following list of accounts receivable written off in the current year.
Dickinson Corporation follows the policy of debiting Bad Debt Expense as accounts are written off. The chief accountant maintains that this procedure is appropriate for financial statement purposes because the Internal Revenue Service will not accept other methods for recognizing bad debts.
All of Dickinson Corporation’s sales a r e on a 30-day c r edit basis. Sales for the cur r ent year total
$2,200,000, and r esea r ch has determined that bad debt losses app r oximate 2% of sales.
Instructions
(a) Do you agree or disagree with Dickinson’s policy concerning recognition of bad debt expense? Why or why not?
(b) By what amount would net income differ if bad debt expense was computed using the percentage- of-sales approach?
40. The stockholders’ equity section of Hendly Corporation appears below as of December 31, 2017. 8...
The stockholders’ equity section of Hendly Corporation appears below as of December 31, 2017. 8% preferred stock, $50 par value, authorized 100,000 shares, outstanding 90,000 shares $ 4,500,000 Common stock, $1.00 par, authorized and issued 10 million shares 10,000,000 Additional paid-in capital 20,500,000 Retained earnings $134,000,000 Net income 33,000,000 167,000,000 $202,000,000 Net income for 2017 reflects a total effective tax rate of 34%. Included in the net income figure is a loss of $18,000,000 (before tax) as a result of a non-recurring major casualty. Preferred stock dividends of $360,000 were declared and paid in 2017. Dividends of $1,000,000 were declared and paid to common stockholders in 2017. Instructions Compute earnings per share data as it should appear on the income statement of Hendly Corporation.
41. A company has eight lost time injuries for the year. This converts to: Frequency rate:...
A company has eight lost time injuries for the year. This converts to: Frequency rate: 22.86
- Incidence rate: 53.33
- Average lost time/ severity rate: 22.5
If you were required to present these statistics at a HSC meeting, how would you present the information?
42. Salesmen’s remuneration is to be apportioned on the basis of 1.time ratio
Salesmen’s remuneration is to be apportioned on the basis of
1.time ratio
2.adjusted time ratio
3.allocation to post-incorporation period
4.sales ratio
43. 92. Which of the following statements about ROI is false? A. ROI is used to measure the performance.
92. Which of the following statements about ROI is false? A. ROI is used to measure the performance of investment centers. B. ROI = margin divided by investment turnover. C. Trying to maximize ROI can result in a conflict between the interest of a particular manager and the interest of the business as a whole. D. The book value of operating assets is frequently used as the investment base for calculating return on investmen
44. Answer and how to plug into calculator using n, I/y, pmt, fv, and pv
Answer and how to plug into calculator using n, I/y, pmt, fv, and pv. Welsmann Co. issued 15-year bonds a year ago at a coupon rate of 4.9 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 4.5 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g, 32.16) Current bond price KPrev 2 of 8 Next 80 3 5 7 9 0
45. Value-Added
Heirloom Company manufactures hand-made pine storage boxes for a variety of clients. As production manager, you have developed the following value chart:
Operation Average number of days
Receiving materials 1
Storing materials 2
Handling materials 3
Cutting/measuring materials 6
Assembling materials 4
Buil...
