1.On January 1, a machine with a useful life of four years and a salvage value of $15000 was purchased for $120000.
1.On January 1, a machine with a useful life of four years and a salvage value of $15000 was purchased for $120000. What is the depreciation expense for year 2 under straight-line depreciation?
$26250.
$30000.
$13125.
$52500.
2. A plant asset was purchased on January 1 for $46300 with an estimated salvage value of $10000 at the end of its useful life. The current year’s depreciation expense is $3300 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $16500. The remaining useful life of the plant asset is
5 years.
6 years.
11 years.
14 years.
3. Oriole Company bought equipment for $420000 on January 1, 2021. Oriole estimated the useful life to be 4 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2022, Oriole decides that the business will use the equipment for a total of 6 years. What is the revised depreciation expense for 2022?
$52500.
$105000.
$63000.
$84000.
4. Equipment costing $100000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 6 years and no change in the salvage value, the depreciation expense for Year 3 would be
$14167.
$21250.
$10625.
$15938.
5. The following totals for the month of April were taken from the payroll records of Concord Corporation.
Salaries
$96000
FICA taxes withheld
7340
Income taxes withheld
20000
Medical insurance deductions
3600
Federal unemployment taxes
260
State unemployment taxes
1730
The entry to record the accrual of federal unemployment tax would include a
debit to Federal Unemployment Taxes Expense for $260.
credit to Federal Unemployment Taxes Payable for $260.
credit to Payroll Tax Expense for $260.
debit to Federal Unemployment Taxes Payable for $260.
6. Pina Colada Corp. issued a five-year interest-bearing note payable for $330000 on January 1, 2019. Each January the company is required to pay $66000 on the note. How will this note be reported on the December 31, 2020, balance sheet?
Long-term debt, $264000
Long-term debt of $264000; Long-term Debt due within one year, $66000
Long-term debt, $330000
Long-term debt, $198000; Long-term Debt due within one year, $66000
7. A corporation issues $201000, 10%, 5-year bonds on January 1, 2020, for $192600. Interest is paid annually on January 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized in December 31, 2020’s adjusting entry is
$18420.
$20100.
$1680.
$21780.
8. If the market rate of interest is 10%, a $9500, 11%, 10-year bond that pays interest annually would sell at an amount
less than face value.
that cannot be determined.
equal to face value.
greater than face value.
9. The board of directors of Wildhorse Co. declared a cash dividend of $1.80 per share on 39000 shares of common stock on July 15, 2020. The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020. The correct entry to be recorded on August 15, 2020, will include a
debit to Dividends Payable.
credit to Dividends Payable.
debit to Cash Dividends.
credit to Cash Dividends.
10. The board of directors of Oriole Company declared a cash dividend of $1.15 per share on 44000 shares of common stock on July 15, 2020. The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020. The effects of the journal entry to record the payment of the dividend on August 15, 2020, are to
decrease liabilities and decrease assets.
increase stockholders’ equity and decrease assets.
decrease stockholders’ equity and decrease liabilities.
increase stockholders’ equity and increase liabilities.
11. Metlock, Inc. has 900 shares of 8%, $100 par value, cumulative preferred stock and 45000 shares of $1 par value common stock outstanding at December 31, 2020. What is the annual dividend on the preferred stock?
$7200 in total.
$80 per share.
$0.80 per share.
$800 in total.
12. Sheridan Company’s December 31, 2020 balance sheet showed the following:
6% preferred stock, $20 par value, cumulative,
30000 shares authorized; 21000 shares issued
$ 420000
Common stock, $10 par value, 3,000,000 shares authorized;
1,950,000 shares issued, 1,920,000 shares outstanding
19200000
Paid-in capital in excess of par value – preferred stock
64000
Paid-in capital in excess of par value – common stock
27800000
Retained earnings
9150000
Treasury stock (30,000 shares)
759000
Sheridan declared and paid a $89800 cash dividend on December 15, 2020. If the company’s dividends in arrears prior to that date were $25800, Sheridan’s common stockholders received
no dividend.
$64600.
$38800.
$49800.
13. Nash’s Trading Post, LLC reported a net loss of $8880 for the year ended December 31, 2022. During the year, accounts receivable decreased $20720, inventory increased $14800, accounts payable increased by $22200, and depreciation expense of $17760 was recorded. During 2022, operating activities
provided net cash of $54760.
used net cash of $10360.
provided net cash of $37000.
used net cash of $37000.
14. Blossom Company had net income of $1050200 for the year ending 12/31/2022. Depreciation expense for 2022 is $129800. During the year, accounts receivable and inventory increased $70800 and $188800, respectively. Prepaid expenses and accounts payable decreased $9440 and $18880, respectively. There was also a loss on the sale of equipment of $14160. How much cash was provided by operating activities in 2022?
$925120.
$1331040.
$1274400.
$896800.
15. A company had net income of $219960. Depreciation expense is $20280. During the year, accounts receivable and inventory increased $11700 and $31200, respectively. Prepaid expenses and accounts payable decreased $1560 and $10920, respectively. There was also a loss on the sale of equipment of $13260. How much cash was provided by operating activities?
$201240.
$248040.
$187980.
$264420.
16. In Sunland Company, land decreased $278100 because of a cash sale for $278100, the equipment account increased $92700 as a result of a cash purchase, and bonds payable increased $309000 from issuance for cash at face value. The net cash provided by investing activities is
$216300.
$278100.
$185400.
$494400.
17. Windsor, Inc. has the following income statement (in millions):
WINDSOR, INC. Income Statement For the Year Ended December 31, 2023
Net Sales
$560
Cost of Goods Sold
308
Gross Profit
252
Operating Expenses
63
Net Income
$ 189
Using vertical analysis, what percentage is assigned to cost of goods sold?
100%
55%
42%
50%
18. Larkspur, Inc. has the following income statement (in millions):
LARKSPUR, INC. Income Statement For the Year Ended December 31, 2023
Net Sales
$300
Cost of Goods Sold
100
Gross Profit
200
Operating Expenses
62
Net Income
$ 138
Using vertical analysis, what percentage is assigned to net income?
100%
54%
46%
138%
19. Sunland Company had net credit sales of $4151700 and cost of goods sold of $3518000 for the year. The Accounts Receivable balances at the beginning and end of the year were $611000 and $707000, respectively. The accounts receivable turnover was
5.8 times.
6.9 times.
3.2 times.
6.3 times.
20. Sandhill Co. reported net sales of $415000, $450000, and $601750 in the years 2021, 2022, and 2023, respectively. If 2021 is the base year, what is the trend percentage for 2023?
134%
108%
145%
69%
21. On January 1, Vaughn Manufacturing has a beginning cash balance of $226000. During the year, the company expects cash disbursements of $1010000 and cash receipts of $810000. If Vaughn requires an ending cash balance of $150000, Vaughn Manufacturing must borrow
$176000.
$426000.
$124000.
$150000.
22. Sunland Company has 18000 units in beginning finished goods. If sales are expected to be 60000 units for the year and Sunland desires ending finished goods of 24000 units, how many units must the company produce?
60000
66000
84000
54000
23. Sheffield Corp. has 11000 units in beginning finished goods. The sales budget shows expected sales to be 32000 units. If the production budget shows that 37000 units are required for production, what was the desired ending finished goods?
6000.
16000.
11000.
21000.
24. Vaughn Manufacturing plans to sell 420 potted plants during April and 340 units in May. Vaughn Manufacturing keeps 15% of the next month’s sales as ending inventory. How many units should Vaughn Manufacturing produce during April?
471
432
420
408
25. Direct materials inventories are kept in pounds in Bramble Company, and the total pounds of direct materials needed for production is 9300. If the beginning inventory is 800 pounds and the desired ending inventory is 2200 pounds, the total pounds to be purchased are
10700.
9600.
9900.
9700.
26. An investment center generated a contribution margin of $300000, fixed costs of $200000 and sales of $1000000. The center’s average operating assets were $500000. How much is the return on investment?
100%
20%
60%
200%
27. Bramble Corp. is evaluating its Piquette division, an investment center. The division has a $54000 controllable margin and $400000 of sales. How much will Bramble’s average operating assets be when its return on investment is 10%?
$400000
$594000
$346000
$540000
28. Swifty Corporation produced 210000 units in 95000 direct labor hours. Production for the period was estimated at 220000 units and 110000 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at
95000 hours and 95000 hours.
105000 hours and 95000 hours.
110000 hours and 95000 hours.
105000 hours and 110000 hours.
29. At zero direct labor hours in a flexible budget graph, the total budgeted cost line intersects the vertical axis at $48000. At 16000 direct labor hours, a horizontal line drawn from the total budgeted cost line intersects the vertical axis at $208000. Fixed and variable costs may be expressed as:
$48000 fixed plus $10 per direct labor hour variable.
$48000 fixed plus $13 per direct labor hour variable.
$160000 fixed plus $10 per direct labor hour variable.
$160000 fixed plus $3 per direct labor hour variable.
30. Sunland Company prepared a 2019 budget for 180000 units of product. Actual production in 2019 was 190000 units. To be most useful, what amounts should a performance report for this company compare?
The actual results for 190000 units with a new budget for 190000 units.
It doesn’t matter. All of these choices are equally useful.
The actual results for 190000 units with last year’s actual results for 196000 units.
The actual results for 190000 units with the original budget for 180000 units.
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