Tom just received his bank statement and wanted to make sure that the balance

Bank Reconciliation

Tom just received his bank statement and wanted to make sure that the balance in his check book was correct. Tom determined the following information:

  1. At the end of the month Tom’s check book showed a balance of $183
  2. The bank indicated that the balance in Tom’s account was $475
  3. Check number 104 for $60, check number 107 for $205 and check number 108 for $100 had not cleared the bank.
  4. A deposit of $140 did not show up in the bank statement.
  5. Since Tom wanted a paper statement the bank charged him $5
  6. A check of $70 which was previously deposited was returned by the bank plus a $10 service charge.
  7. Tom discovered that a check she had written for $236 had been incorrectly recorded in his check ledger at $263.
  8. A friend had wired directly to Tom’s account $125.

A.Determine the true cash balance for Tom’s checking account.

B.Determine the amount of change in cash as a result of this statement.

C.Determine the amount of change in expense as a result of this statement.

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Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore (A+ Guaranteed)

Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 135,000 kilometers during a year, the average operating cost is 14.5 cents per kilometer. If a truck is driven only 90,000 kilometers during a year, the average operating cost increases to 18.1 cents per kilometer.
1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places and Fixed cost answer to nearest whole dollar amount.)

High Level of Activity ___

Low Level of Activity ___

Change ___

Varaible cost pe kilometer ___

Fixed cost per year___

 

2.  Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.)

3.  If a truck were driven 112,000 kilometers during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations.)

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Wallowa Company is considering a long-term investment project called ZIP

Wallowa Company is considering a long-term investment project called ZIP. ZIP will require an investment of $121,080. It will have a useful life of 4 years and no salvage value. Annual revenues would increase by $79,460, and annual expenses (excluding depreciation) would increase by $40,590. Wallowa uses the straight-line method to compute depreciation expense. The company’s required rate of return is 11%.

Compute the annual rate of return. (Round answer to 0 decimal places, e.g. 15%.)

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ACC 400 FINAL EXAM – Zelma Company’s last financial statements provided

ACC 400 Final Exam

1.  Zelma Company’s last financial statements provided the following ratios:
Current ratio  3:2
Quick ratio  1:2
Accounts receivable turnover 9.0 times
Inventory turnover   8.0 times
Net income percentage  12.5%
Return on equity    22.6%
Return on assets     9.8%
To the nearest day, what is the operating cycle for Zelma?
a)      80 days
b)      86 days
c)      172 days
d)      129 days

 2.  The following events have been projected:
A. Cash sales and collections from customers totaling $980,000
B. Cash payments for operating expenses of $560,000
C. Cash payments for income taxes and interest expense of $45,000
D. Cash payments of prior period accruals of $80,000
E. Borrowed $50,000 cash by issuing a note payable
F. Cash dividends of $20,000
The beginning balance of cash is $45,000. What is the budgeted ending balance of cash?
a.      $325,000
b.     $370,000
c.      $275,000
d.     $245,000

3. On January 1, a business exchanged a plant asset with a cost of $18,000 and accumulated depreciation of $16,500 for a similar asset that had a list price of $23,000. The business received a trade-in allowance of $2,100 on the old plant asset. What was the result of the exchange?
a. A $600 gain on the disposal of a plant asset.
b. A $1,000 unrecognized gain on the exchange of a plant asset.
c. A cost basis of $22,400 for the new plant asset
d. A cost basis of $23,600 for the new plant asset

4. Which one of the following is not an objective of a system of internal controls?
a.   Safeguard company assets
b.   Overstate liabilities in order to be conservative
c.   Enhance the accuracy and reliability of accounting records
d.   Reduce the risks of errors

 5.    A company’s past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5 % in the second month after the sale; the remainder is never collected.  Budgeted credit sales were:
July                             $120,000
August                             72,000
September                    180,000
The cash inflow in the month of September is expected to be
a.   $135,600
b.   $102,600
c.   $108,000
d.   $129,600

6. A check for $275 is incorrectly recorded by a company as $257.  On the bank reconciliation, the $18 error should be
a.      Added to the balance per books.
b.      Deducted from the balance per book.
c.      Added to the balance per bank.
d.      Deducted from the balance per bank.

7.     The Allowance for Doubtful Accounts is necessary because
a.      when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay.
b.        uncollectible accounts that are written off must be accumulated in a separate account.
c.      a liability results when a credit sale is made.
d.      management  needs to accumulate all the credit losses over the years.

8.     Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited
a.   when a credit sale is past due.
b.   at the end of each accounting period.
c.   whenever a pre-determined amount of credit sales have been made.
d.   when an account is determined to be uncollectible

9. Manning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Manning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?
a.   Bad Debts Expense ………………………………………………..          10,000
Allowance for Doubtful Accounts ……………………..         10,000
b.   Bad Debts Expense ………………………………………………..            8,000
Allowance for Doubtful Accounts ……………………..           8,000
c.   Bad Debts Expense ………………………………………………..            8,000
Accounts Receivable ………………………………………            8,000
d.   Bad Debts Expense ………………………………………………..          10,000
Accounts Receivable …………………………………                                10,000

10.       The receivables turnover ratio
a.      Is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period.
b.      Can be used to compute the average collection period.
c.      Is a method of evaluating the solvency of net accounts receivable.
d.      Is only important to internal users of accounting information.

11.       A measure of a company’s solvency is the
a.   acid-test ratio.
b.   current ratio.
c.   times interest earned ratio.
d.   asset turnover ratio.

12.       The times interest earned ratio is computed by dividing
a.   net income by interest expense.
b.   income before income taxes by interest expense.
c.   income before interest expense by interest expense.
d.   income before interest expense and income taxes by interest expense.

13.       The 2007 financial statements of Shadow Co. contain the following selected data (in millions).
Current Assets                      $  75
Total Assets                            120
Current Liabilities                     40
Total Liabilities                         85
Cash                                            8
Interest Expense                         5
Income Taxes                            10
Net Income                               16
The debt to total assets ratio is
a.   70.8%
b.   53.3%
c.   1.41%
d.   6.2 times

14. The statement “Bond prices vary inversely with changes in the market rate of interest” means that if the
a.   market rate of interest increases, the contractual interest rate will decrease.
b.   contractual interest rate increases, then bond prices will go down.
c.   market rate of interest decreases, then bond prices will go up.
d.   contractual interest rate increases, the market rate of interest will decrease.

15.  A company would not acquire treasury stock
a.   in order to reissue shares to officers.
b.   as an asset investment.
c.   in order to increase trading of the company’s stock.
d.   to have additional shares available to use in acquisitions of other companies.

16.       Which of the following is the appropriate general journal entry to record the declaration of cash dividends?
a.   Retained Earnings
Cash
b.   Dividends Payable
Cash
c.   Paid-in Capital
Dividends Payable
d.   Retained Earnings
Dividends Payable

17.       Allstate, Inc., has 10,000 shares of 6%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2007. If the board of directors declares a $50,000 dividend, the
a.   preferred stockholders will receive 1/10th of what the common stockholders will receive.
b.   preferred stockholders will receive the entire $50,000.
c.   $50,000 will be held as restricted retained earnings and paid out at some future date.
d.   preferred stockholders will receive $25,000 and the common stockholders will receive $25,000.

18.    When a change in accounting principle occurs
a.   prior years’ financial statements should not be changed to reflect the newly adopted principle.
b.   the new principle should be used in reporting the results of operations of the current year.
c.   the cumulative effect of the change in principle should be reflected on the income statement as of the beginning of the next year.
d.   the cumulative effect of the change in accounting principle should be classified as an extraordinary item on the income statement.

19.     Which of the following is not an irregular item on the income statement?
a.   Discontinued operations
b.   Extraordinary items
c.   Other revenues and expenses

20.     Vertical analysis is a technique that expresses each item in a financial statement
a.   in dollars and cents.
b.   as a percent of the item in the previous year.
c.   as a percent of a base amount.
d.   starting with the highest value down to the lowest value.

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Vrable Corporation has a defined benefit pension plan. Two alternative possibilities

Vrable Corporation has a defined benefit pension plan. Two alternative possibilities for pension- related data for the current calendar year are shown below:

Case 1 Case 2

Net loss (gain), Jan. 1 $240,000 $(230,000)

Loss (gain) on plan assets (8,000) (6,000)

Loss (gain) on PBO (17,000) 12,000

ABO, Jan 1 (1,900,000) (1,500,000)

PBO, Jan 1 (2,500,000) (1,700,000)

Plan assets, Jan 1 2,100,000 2,000,000

Average remaining service period

of active employees (years) 10 12

 

REQUIRED:

For each independent case, calculate amortization of the net loss or gain that should be included as a component of pension expense for the current year.

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McBean Company has outstanding 18 million shares of $3 par value

McBean Company has outstanding 18 million shares of $3 par value common stock and 1.8 million shares of $5 par value preferred stock. The preferred stock has a 8% dividend rate. The company declares $10,800,000 in total dividends for the year. Preferred Dividends in arrears are $540,000.

A. Compute the amount of dividends to be distributed to preffered shareholders. (Enter your answer in dollars and not millions)

Preffered dividend -

B. Compute the amount of dividends to be distributed to common shareholders. (Enter your answer in dollars and not in millions)

Common dividend -

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Horton Company began business on January 1, 2014 by issuing

Horton Company began business on January 1, 2014 by issuing all of its 1,150,000 authorized shares of its $1 par value common stock for $22 per share. On June 30, they declared a cash dividend of $1.50 per share to stockholders of record on July 31. They paid the cash dividend on August 30. On November 1, Horton reacquired 230,000 of its own shares of stock for $27 per share. On December 22 they resold half of these shares for $33 per share.

a.
Prepare all of the necessary journal entries to record the events described above
Record the issue of 1,150,000 authorized shares of $1 par value for $22 per share.
Record the issue of 1,150,000 authorized shares of $1 par value for $22 per share.Record the declaration of the cash dividends of $1.50 per share.
Record the payment of the cash dividends of $1.50 per share.
Record the repurchase of 230,000 shares for $27 per share.
Record the reissue of 115,000 share for 33 per share

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Eric Baker began operations as a private investigator on January 1, 2014 (A+ Guaranteed)

Eric Baker began operations as a private investigator on January 1, 2014. The trial balance columns of the worksheet for Eric Baker, P.I., Inc. at March 31 are as follows.

Eric Baker P.I., Inc.

Worksheet

For the Quarter Ended March 31, 2014

Trial Balance

Account Titles     Dr.      Cr.

Cash             11,410

Accounts Receivable 5,920

Supplies           1,250

Prepaid Insurance 2,400

Equipment         30,000

Notes Payable              10,000

Accounts Payable           12,350

Common Stock               20,000

Dividends          600

Service Revenue             14,200

Salaries and Wages Expense 2,240

Travel Expense     1,300

Rent Expense        1,200

Miscellaneous Expense 230

56,550 56,550

Other data:

1.Supplies on hand total $480.

2.Depreciation is $720 per quarter.

3.Interest accrued on 6-month note payable, issued January 1, $300.

4.Insurance expires at the rate of $200 per month.

5.Services provided but unbilled at March 31 total $1,080.

Instructions

(a) Enter the trial balance on a worksheet and complete the worksheet.

(b) Prepare an income statement and a retained earnings statement for the quarter and a classified balance sheet at March 31.

(c) Journalize the adjusting entries from the adjustments columns of the worksheet.

(d) Journalize the closing entries from the financial statement columns of the worksheet.

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FIN 100 Week 7 Quiz 6 (A+ Guaranteed)

Question 1

The regulation of new security sales by individual states is referred to as:

Question 2

___________________ is when an investor borrows money and invests the borrowed funds along with his or her own funds in securities.

Question 3

An order to sell stock at the market price when the price of the stock falls to a specified level is called a:

Question 4

An order for immediate purchase or sale at the best possible price is called a:

Question 5

A market whereby large institutional investors arrange purchases and sales of securities among themselves without the benefit of a broker or dealer is referred to as the:

Question 6

Trades between large institutional investors that take place without the benefits of brokers or dealers occur in the:

Question 7

___________________ is the maximum purchase price or minimum selling price specified by an investor.

Question 8

__________________ is a technique for trading stocks as a group rather than individually, defined as a minimum of at least 15 different stocks with a maximum value of $1 million.

Question 9

___________________ is an order to sell stock at the market price when the price of the stock falls to a specified level.

Question 10

An order that remains in effect until the end of the day is called a:

Question 11

Which of the following is not a component of the security market line equation?

Question 12

Unsystematic risk is also known as:

Question 13

The security market line can be used to determine the expected return on a security based on the:

Question 14

An aggressive portfolio would have a beta of:

Question 15

The relevant measure of risk for a diversified portfolio of assets is the portfolio’s level of:

Question 16

The effect on revenues and expenses from variations in the value of the U.S. dollar in terms of other currencies is called:

Question 17

The total risk of a well-diversified portfolio of U.S. stocks appears to be about what proportion of the risk of an average one-stock portfolio?

Question 18

The linear relation between the returns on a stock and the returns on the market portfolio is called the:

Question 19

If the _____________ of a stock is known, an investor can use the security market line to determine the expected return on that stock.

Question 20

The risk cause by variations in interest expense unrelated to sales or operating income arising from changes in the level of interest rates in the economy is called:

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FIN 100 Week 8 Quiz 7 (A+ Guaranteed)

Question 1

Current liabilities would not include:

Question 2

Of the following forms of business organization, which have stockholders with limited liability?

Question 3

A business organization that receives the limited liability of a corporation but is taxed as a proprietorship or partnership is called a:

Question 4

Which one of the following alternatives is commonly used to reduce agency problems as they relate to corporate control?

Question 5

Which of the following business organizations limit the liability of some or all of their owners to the extent of their investment in the company?

Question 6

The actual disbursement of cash is recorded in which of the following financial statements?

Question 7

On the income statement, gross profit is defined as:

Question 8

What would be recorded in the common stock account on the balance sheet if 20,000 shares are issued at a par value of $2 and the market value is $5?

Question 9

The average tax rate on a corporation with $75,000 in income and a tax liability of $15,000 is:

Question 10

Generally accepted accounting principles are formulated by the:

Question 11

As part of the measurement of financial leverage, the total debt ratio is calculated as:

Question 12

Which one of the following financial statements reports a firm’s assets and the claims on assets?

Question 13

The method of calculating return on assets which highlights the importance of sales, profit margin, and asset turnover is known as:

Question 14

If a firm’s sale price per unit decreases, the firm’s operating breakeven point will

Question 15

The ________ method of developing a pro forma income statement forecasts sales and values for the cost of goods sold, operating expenses, and interest expense that are expressed as a ratio of projected sales.

Question 16

Which one of the following ratios indicates the average number of days that sales are outstanding?

Question 17

Which of the following is not a variable cost?

Question 18

Ratios used to compare different firms at the same point in time belong to a category of analysis called:

Question 19

The extent to which assets are financed by borrowed funds and other liabilities is indicated by:

Question 20

If a firm’s variable cost per unit increases, the firm’s operating breakeven point will

Question 1

The depreciation method currently used for tax purposes today is called the:

Question 2

Current liabilities would not include:

Question 3

On the income statement, net profit after tax is defined as:

Question 4

What would be recorded in the common stock account on the balance sheet if 20,000 shares are issued at a par value of $2 and the market value is $5?

Question 5

The goal of a business should be:

Question 6

The term ___________ conveys a relationship of equality between the assets of the business and the sources of funds for their acquisition.

Question 7

The actual disbursement of cash is recorded in which of the following financial statements?

Question 8

Of the following forms of business organization, which have the advantage of limited liability but no stockholders?

Question 9

The average tax rate on a corporation with $75,000 in income and a tax liability of $15,000 is:

Question 10

Which of the following business organizations limit the liability of some or all of their owners to the extent of their investment in the company?

Question 11

The equity multiplier is calculated as:

Question 12

Cost-volume-profit analysis can be used to estimate the firm’s operating profits at different levels of:

Question 13

The ability of a firm to meet its short-term debt obligations as they come due is indicated by which of the following ratios:

Question 14

Which one of the following types of ratios indicates the ability to meet short-term obligations to creditors as they come due?

Question 15

Which one of the following financial statements reports a firm’s assets and the claims on assets?

Question 16

The _______________ ratio is computed as earnings before interest and taxes divided by interest expense:

Question 17

Which group of ratios might be most interesting to potential creditors of a firm?

Question 18

If a firm’s variable cost per unit increases, the firm’s operating breakeven point will

Question 19

A firm’s sales forecast is usually based on

Question 20

The extent to which assets are financed by borrowed funds and other liabilities is indicated by:

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