1.
\nA company changes from
\npercentage-of-completion to completed-contract, which is the method used for
\ntax purposes. The entry to record this change should include a
\n2.
\nWhich of the following is
\naccounted for as a change in accounting principle?
\n3.
\nA company changes from
\nstraight-line to an accelerated method of calculating depreciation, which will
\nbe similar to the method used for tax purposes. The entry to record this change
\nshould include a
\n4.
\nPresenting consolidated
\nfinancial statements this year when statements of individual companies were
\npresented last year is
\n5.
\nDuring 2008, a construction
\ncompany changed from the completed-contract method to the
\npercentage-of-completion method for accounting purposes but not for tax
\npurposes. The following lists include gross profit figures under both methods
\nfor the past 3 years:<\/p>\n
Completed-Contract<\/p>\n
Percentage-of-Completion<\/p>\n
2006<\/p>\n
$ 475,000<\/p>\n
$ 800,000<\/p>\n
2007<\/p>\n
625,000<\/p>\n
950,000<\/p>\n
2008<\/p>\n
700,000<\/p>\n
1,050,000<\/p>\n
$1,800,000<\/p>\n
$2,800,000<\/p>\n
Assuming an income tax rate of 40% for all years, the affect of
\nthis accounting change on prior periods should be reported by a credit of what?
\n6.
\nOn January 1, 2005, Baden Co. purchased a machine, which was its
\nonly depreciable asset, for $300,000. The machine has a 5-year life, and no
\nsalvage value. Sum-of-the-years’-digits depreciation has been used for
\nfinancial statement reporting and the elective straight-line method for income
\ntax reporting. Effective January 1, 2008, for financial statement reporting,
\nBaden decided to change to the straight-line method for depreciation of the
\nmachine. Assume that Baden can justify the change.
\nBaden’s income before depreciation, before income taxes, and before the
\ncumulative effect of the accounting change, if any, for the year ended December
\n31, 2008, is $250,000. The income tax rate for 2008, and for 2005 through 2007,
\nis 30%. What amount should Baden report as net income for the year ended
\nDecember 31, 2008?
\n7.
\nThe deferred tax expense is the
\n8.
\nA company records an unrealized loss on short-term securities.
\nThis might result in what type of difference and in what type of deferred
\nincome tax? <\/p>\n
Type of Difference<\/p>\n
Deferred Tax<\/p>\n
Option 1<\/p>\n
Temporary<\/p>\n
Liability<\/p>\n
Option 2<\/p>\n
Temporary<\/p>\n
Asset<\/p>\n
Option 3<\/p>\n
Permanent<\/p>\n
Liability<\/p>\n
Option 4<\/p>\n
Permanent<\/p>\n
Asset<\/p>\n
9.
\nA company uses the equity method to account for an investment.
\nThis would result in what type of difference and in what type of deferred
\nincome tax? <\/p>\n
Type of Difference<\/p>\n
Deferred Tax<\/p>\n
Option 1<\/p>\n
Permanent<\/p>\n
Asset<\/p>\n
Option 2<\/p>\n
Permanent<\/p>\n
Liability<\/p>\n
Option 3<\/p>\n
Temporary<\/p>\n
Asset<\/p>\n
Option 4<\/p>\n
Temporary<\/p>\n
Liability<\/p>\n
10.
\nNottingham Corporation had
\naccounts receivable of $100,000 on January 1st The only transactions affecting
\naccounts receivable were sales of $900,000 and cash collections of $850,000.
\nWhat is the accounts receivable turnover?
\n11.
\nIf a petty cash fund is
\nestablished in the amount of $250, and contains $150 in cash and $95 in
\nreceipts for disbursements when it is replenished, the journal entry to record
\nreplenishment should include credits to which of the following accounts?
\n12.
\nIf the month-end bank statement
\nshows a balance of $36,000, outstanding checks are $12,000, a deposit of $4,000
\nwas in transit at month end, and a check for $500 was erroneously charged by
\nthe bank against the account, what is the correct balance in the bank account
\nat month end?
\n13.
\nIf a short-term obligation is
\nexcluded from current liabilities because of refinancing, the footnote to the
\nfinancial statements describing this event should include all of the following
\ninformation EXCEPT:
\n14.
\nStock dividends distributable
\nshould be classified on the
\n15.
\nWhich of the following items is
\na current liability?
\n16.
\nA company borrows $10,000 and
\nsigns a 90-day nontrade note payable. In preparing a statement of cash flows
\n(indirect method), this event would be reflected as
\n17.
\nAn increase in inventory balance
\nwould be reported in a statement of cash flows using the indirect method
\n(reconciliation method) as
\n18.
\nThe primary purpose of the
\nstatement of cash flows is to provide information
\n19.
\nEller Co. received merchandise
\non consignment. As of January 31, Eller included the goods in inventory, but
\ndid not record the transaction. What would be the effect of this on its
\nfinancial statements for January 31?
\n20.
\nCross Co. accepted delivery of
\nmerchandise that it purchased on account. As of
\nDecember 31, Cross had recorded the transaction, but did not
\ninclude the merchandise in its inventory. What would be the effect of this on
\nits financial statements for December 31?
\n21.
\nThe failure to record a
\npurchase of merchandise on account even though the goods are properly included
\nin the physical inventory results in
\n22.
\nFences and parking lots are
\nreported on the balance sheet as
\n23.
\nWhich of these is not a major
\ncharacteristic of a plant asset?
\n24.
\nThe debit for a sales tax
\nproperly levied and paid on the purchase of machinery preferably would be a
\ncharge to
\n25.
\nOn November 1, 2007, Little
\nCompany purchased 600 of the $1,000 face value, 9% bonds of Player,
\nIncorporated, for $632,000, which includes accrued interest of $9,000. The
\nbonds, which mature on January 1, 2012, pay interest semiannually on March 1
\nand September 1. Assuming that Little uses the straight-line method of
\namortization and that the bonds are appropriately classified as
\navailable-for-sale, what would the net carrying value of the bonds be shown as
\non Little’s December 31, 2007, balance sheet?
\n26.
\nOn October 1, 2007, Lyman Co.
\npurchased to hold to maturity, 200 of the $1,000 face value, 9% bonds for
\n$208,000. An additional $6,000 was paid for accrued interest. Interest is paid
\nsemiannually on December 1 and June 1 and the bonds mature on December 1, 2011.
\nLyman uses straight-line amortization. Ignoring income taxes, what was the
\namount reported in Lyman’s 2007 income statement from this investment?
\n27.
\nOn October 1, 2007, Porter Co.
\npurchased to hold to maturity 1,000 of the $1,000 face value, 9% bonds for
\n$990,000 which includes $15,000 accrued interest. The bonds, which mature on
\nFebruary 1, 2016, pay interest semiannually on February 1 and August 1. Porter
\nuses the straight-line method of amortization. The bonds should be reported in
\nthe December 31, 2007 balance sheet at a carrying what value?
\n28.
\nAlthough only certain leases
\nare currently accounted for as a sale or purchase, there is theoretic
\njustification for considering all leases to be sales or purchases. The
\nprincipal reason that supports this idea is that
\n29.
\nAn essential element of a lease
\nconveyance is that the
\n30.
\nWhich of the following is a
\ncorrect statement of one of the capitalization criteria?
\n31.
\nDiscount on notes payable is
\ncharged to interest expense
\n32.
\nThe generally accepted method
\nof accounting for gains or losses from the early extinguishment of debt treats
\nany gain or loss as
\n33.
\nA corporation borrowed money
\nfrom a bank to build a building. The long-term note signed by the corporation
\nis secured by a mortgage that pledges title to the building as security for the
\nloan. The corporation is to pay the bank $80,000 each year for 10 years to
\nrepay the loan. Which of the following relationships can you expect to apply to
\nthe situation?
\n34.
\nBenton Company issues
\n$10,000,000 of 10-year, 9% bonds on March 1, 2007, at 97 plus accrued interest.
\nThe bonds are dated January 1, 2007, and pay interest on June 30 and December
\n31. What is the total cash received on the issue date?
\n35.
\nLimeway Company issues
\n$5,000,000, 6%, 5-year bonds dated January 1, 2007, on January 1, 2007. The
\nbonds pay interest semiannually on June 30 and December 31. The bonds are
\nissued to yield 5%. What are the proceeds from the bond issue?
\n2.5% 3.0% 5.0% 6.0% Present value of a single sum for 5 periods
\n.88385 .88261 .78353 .74726 Present value of a single sum for 10 periods .78120
\n.74409 .61391 .55839 Present value of an annuity for 5 periods 4.64583 4.57971
\n4.32948 4.21236 Present value of an annuity for 10 periods 8.75206 8.53020
\n7.72173 7.36009
\n36.
\nA company issues $20,000,000,
\n7.8%, 20-year bonds to yield 8% on January 1, 2007. Interest is paid on June 30
\nand December 31. The proceeds from the bonds are $19,604,145. Using
\neffective-interest amortization, how much interest expense will be recognized
\nin 2007?
\n37.
\nWhich of the following is not a
\ncharacteristic of a defined-contribution pension plan?
\n38.
\nIn accounting for a
\ndefined-benefit pension plan
\n39.
\nThe interest on the project ( help with nursing paper writing from experts with MSN & DNP degrees)ed
\nbenefit obligation component of pension expense
\n40.
\nWindsor Company has outstanding
\nboth common stock and nonparticipating, noncumulative preferred stock. The
\nliquidation value of the preferred is equal to its par value. The book value
\nper share of the common stock is unaffected by
\n41.
\nDividends are not paid on
\n42.
\nAssume common stock is the only
\nclass of stock outstanding in the B-Bar-B Corporation. Total stockholders’
\nequity divided by the number of common stock shares outstanding is called
\n43.
\nPreparation of consolidated
\nfinancial statements when a parent-subsidiary relationship exists is an example
\nof the
\n44.
\nIn presenting segment
\ninformation, which of the following items must be reconciled to the entity’s
\nconsolidated financial statements?
\n45.
\nPresenting consolidated
\nfinancial statements this year when statements of individual companies were
\npresented last year is<\/p>\n","protected":false},"excerpt":{"rendered":"
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