ACC 100 Unit 4 Milestone Sophia course

1

Don's Landscaping Service purchased a backhoe for $12,000. It has a useful life of five years and a residual value of $1,750. 

 

Based on this information, what is the straight-line depreciation for one year for this asset?

 

$10,250

 

$1,025

 

$2,400

 

$2,050

 

Straight Line Depreciation

2

Examine the partial balance sheet vertical analysis below.

ASSETS                     

Cash    $23,650           43%

Accounts Receivable  $31,350           57%

Total Assets    $55,000           100%

                       

LIABILITIES             

Accounts Payable       ______            ____

Notes Payable $15,400           28%

Total Liabilities                      62%

                       

EQUITY                     

Total Equity    $20,900           38%

                       

 

Based on the information shown, what is the correct amount and percentage of accounts payable?

 

$18,700; 34%

 

$39,600; 72%

 

$20,900; 38%

 

$49,500; 90%

 

Vertical Analysis and Horizontal Analysis

3

Ned used a journal entry in which a customer currently owed $9,200 to illustrate the damaging effects of uncollectible accounts.

 

In Ned's journal entry, he debited $9,200 for __________ and entered a credit of $9,200 for __________.

 

bad debt expense; accounts receivable

 

bad debt expense; allowance for bad debts

 

allowance for bad debts; bad debt expense

 

allowance for bad debts; accounts receivable

 

Uncollectible Accounts

4

Which of the following internal control systems does TAP Technology, Inc. use when it updates its employee handbook to reflect new company policies?

 

Control environment

 

Control activity

 

Information and communication system

 

Monitoring process

 

Internal Controls and Reconciliations

5

Jill purchased a lot (i.e., land) for $35,000 on which to build her store.

What kind of activity on a statement of cash flows does this exemplify?

 

Operating activity

 

Investing activity

 

Financing activity

 

Capital activity

 

Statement of Cash Flows

6

 

 

Which of the amounts below is the correct total uncollectible amount, given the above aging schedule?

 

$170

 

$340

 

 

$200

 

 

$260

 

 

Allowance Method: Aging Receivables

7

 

 

Using the information shown here, which of the following is the asset turnover ratio?

 

2.00

 

0.14

 

0.09

 

1.67

 

Ratio Analysis

8

All of the following assets may have a residual value EXCEPT ________.

 

a tractor

 

farmland

 

irrigation fixtures

 

a parking lot

 

Depreciation

9

LONG TERM ASSET

ASSET: ASSEMBLY EQUIPMENT

COST  $15,000

ACCUMULATED DEPRECIATION            $2,500

PREPAID INSURANCE        $500

MAINTENANCE COSTS     $1,500

BOOK VALUE          ______

 

Based on the information shown here, which of the following is the book value of the assembly equipment?

 

$13,500

 

 

 

$10,500

 

 

$12,000

 

$12,500

 

 

Financial Reporting of Long Term Assets

10

Ian's primary post-merger concern was fraud. Ian told his employees that he was concentrating on methods that address the identification, review and response to fraud.

 

Ian focused on the internal control of __________.

 

risk assessment

 

monitoring processes

 

control environment

 

control activities

 

Internal Controls and Reconciliations

11

 

 

Using these end of period figures, which of the following is the rate of return on sales?

 

1.70

 

1.42

 

 

1.20

 

 

2.59

 

 

Ratio Analysis

12

Which of the following is NOT an example of personal property?

 

One acre of farmland

 

Tractor

 

Milking machines

 

Barn

 

Long Term Assets

13

 

 

Based on the above information, what amount would be recorded in accounts receivable at 1-30 days?

 

$15,000

 

$50,000

 

$75,000

 

$25,000

 

Allowance Method: Aging Receivables

14

 

 

Considering the information in the general journal shown here, which of the following is the correct percent of credit sales that are uncollectible?

 

7%

 

5%

 

2%

 

9%

 

Allowance Method: Percentage of Net Credit Sales and Percentage of Receivables

15

The value of a machine was $400,000 when purchased new one year ago. It has an expected life of five years and the income statement shows the straight line depreciation rate as 20%. 

 

 

Using double declining balance depreciation, what is the value of the machine at the end of year two?

 

$144,000

 

 

$160,000

 

$96,000

 

 

$240,000

 

 

Accelerated Depreciation

16

 

 

Given the information shown here, which of the following is the current ratio? 

 

0.62

 

 

0.50

 

0.64

 

0.80

 

 

Ratio Analysis

17

Which of the following concerning unearned revenues is NOT true?

 

They are recorded as a revenue account entry.

 

Adjusting entries are made at the end of a period to report unearned revenues.

 

They are found on a balance sheet.

 

They are receipts for services or products that will be performed or delivered at a future date.

 

Current Liabilities

18

Which of the following is NOT depreciated because it does not get used up?

 

Land fixtures

 

Automobiles

 

Land

 

Buildings

 

Depreciation

19

What is the current ratio formula?

 

Current liabilities/ Current assets

 

Assets / Liabilities

 

Current assets / Current liabilities

 

Total assets / Total liabilities

 

Ratio Analysis

20

Which of the following examples can be classified as an accounts receivable?

 

Terry issued a paycheck to his receptionist.

 

Terry sent a specialty cage supplier a payment on account.

 

Terry took a $500 deposit for the upcoming stay of the boa constrictor.

 

Terry placed an order for food for the spotted genet. The terms of sale were cash in advance.

 

Accounts Receivable Subsidiary Ledgers

Accounts Payable Subsidiary Ledgers

21

If Joel took out a three-month loan at 6.5% for remodeling of his store that he estimates will cost $14,500, which of the following is the interest total for the remodeling?

 

$2,356.25

 

 

$235.63

 

 

$3,770.00

 

 

$231.86

 

Short Term Notes Payable

22

Which of the following allowances for bad debt should the company enter into their financials for an Accounts Receivable account with a balance of $50,000 if the company estimates that 1.9% of receivables will be uncollectible?

 

$950.00

 

$9,500.00

 

$10,250.00

 

$1,025.00

 

 

Allowance Method: Percentage of Net Credit Sales and Percentage of Receivables

23

Which asset below is a current asset?

 

Office building

 

Delivery truck

 

Commercial kitchen

 

Prepaid insurance premium

 

Long Term Assets

1

 

Using the aging schedule above, which of the following is the total uncollectible amount?

 

$4,745

$4,610

$3,975

$5,105

 

Allowance Method: Aging Receivables

2

Which of the following internal controls has Laura implemented at her company if the new system computerizes sales for the protection and security of her customers?

 

Monitoring processes

 

 

Information and communication systems

 

 

Risk assessment

 

 

Control activities

 

 

Internal Controls and Reconciliations

3

Which of the following describes unearned revenues?

 

$45,000 in total payroll owed to employees on May 1

 

 

The accounts payable totals $9,500

 

 

$3,500 paid to a company for services it will provide next week

 

 

$1,500 in sales tax collected

 

 

Current Liabilities

4

Which asset below is a current asset?

 

Fleet of company cars

 

 

Computer

 

 

Printer ink

 

 

Warehouse

 

 

Long Term Assets

5

__________________ includes policies, procedures and mindset of top management. A tangible representation can be found in the employee handbook or annual statement.

 

Risk assessment

 

 

Control activity

 

 

Control environment

 

 

Monitoring process

 

 

Internal Controls and Reconciliations

6

Which of the assets below CANNOT depreciate?

 

Two all-terrain vehicles

 

 

Two cabins

 

 

Two acres of land

 

 

Two chainsaws

 

 

Depreciation

7

 

 

Based on this information, which of the following is the correct rate of return on sales?

 

1.40

 

 

 

 

0.88

 

 

 

 

1.26

 

 

 

 

1.13

 

 

Ratio Analysis

8

On April 1, 2013, Maggie bought a new delivery truck for her business. The purchase price of the truck was $34,000. Maggie wrote a check for a 20% down payment. The interest rate on the loan is 8% and the loan period is nine months.

 

How much interest must Maggie record when she pays off the loan on December 31st?

 

$1,632

 

 

$2,448

 

 

$2,176

 

 

$2,720

 

 

Short Term Notes Payable

9

A business purchased a machine for $750,000. The expected life of the machine is five years and the straight line depreciation rate is 20%. The machine is expected to have a residual value of $10,000. 

 

 

Using the double-declining balance method of depreciation, what is the correct book value for the machine at the end of the first year?

 

$590,000

 

 

$450,000

 

 

$440,000

 

 

$602,000

 

 

Accelerated Depreciation

10

Which of the following allowances for bad debt should the company enter into their financials for an Accounts Receivable account with a balance of $1,500,000 if the company estimates that 3.3% of receivables will be uncollectible?

 

$90,000

 

 

$49,500

 

 

$37,500

 

 

$60,000

 

 

Allowance Method: Percentage of Net Credit Sales and Percentage of Receivables

11

 

 

Based on the information from the last six months (shown here), which of the following is the current ratio?

 

6.46

 

 

9.08

 

 

 

 

7.31

 

 

 

 

9.24

 

 

 

 

Ratio Analysis

12

Examine the partial balance sheet vertical analysis below. 

 

Based on the information shown, what is the correct amount and percentage of accounts payable?

 

$20,000; 25%

 

 

$18,000; 22.5%

 

 

$22,000; 25%

 

 

$20,000; 20%

 

 

Vertical Analysis and Horizontal Analysis

13

Marian received an extra principal payment on the loan her business made to another company.

What activity does this exemplify?

 

Financing activity

 

 

Investing activity

 

 

No activity to record on the statement of cash flows

 

 

Operating activity

 

 

Statement of Cash Flows

14

Which of the following examples can be classified as an accounts receivable?

 

Terry took a $500 deposit for the upcoming stay of the boa constrictor.

 

 

Terry placed an order for food for the spotted genet. The terms of sale were cash in advance.

 

 

Terry sent a specialty cage supplier a payment on account.

 

 

Terry issued a paycheck to his receptionist.

 

 

Accounts Receivable Subsidiary Ledgers

Accounts Payable Subsidiary Ledgers

15

Which asset below never has residual value?

 

Office building

 

 

Forklift

 

 

Land

 

 

Truck

 

 

Depreciation

16

What is the current ratio formula?

 

Current liabilities/ Current assets

 

 

Current assets / Current liabilities

 

 

Assets / Liabilities

 

 

Total assets / Total liabilities

 

 

Ratio Analysis

17

The aging schedule below lists the amount and percentage that the company estimates will be uncollectible.

 

 

Which amount would be recorded in accounts receivable at over 60 days?

 

$72,694

 

 

$65,475

 

 

$1,984

 

 

$5,234

 

 

Allowance Method: Aging Receivables

18

LONG TERM ASSET

ASSET: FORKLIFT

COST  $56,000

ACCUMULATED DEPRECIATION            $22,400

PREPAID INSURANCE        $1,500

MAINTENANCE       $6,500

BOOK VALUE          ______

 

Based on the following information from a company's asset record, what is the book value of the forklift?

 

$56,000

 

 

$25,600

 

 

$33,600

 

 

$32,100

 

 

Financial Reporting of Long Term Assets

19

Which group of assets contains ONLY personal property?

 

Vehicle, supplies and factory equipment

 

 

Land, supplies and vehicle

 

 

Vehicle, landscaping and office equipment

 

 

Landscaping, supplies and factory equipment

 

 

Long Term Assets

20

A company's sales for the year were $549,650 and a credit to Allowance for Bad Debt for $16,489.50 was made.

 

Based on this entry, what percentage of sales is considered uncollectible?

 

3%

 

 

3.5%

 

 

2.5%

 

 

4%

 

 

Allowance Method: Percentage of Net Credit Sales and Percentage of Receivables

21

A company's year-end financial information shows the following amounts. 

Current assets $75,000

Current liabilities       $30,000

Net income     $34,000

Net sales         $164,500

Average total assets    $150,000

 

Based on this information, what is the company's asset turnover ratio?

 

0.23

 

 

2.2

 

 

1.1

 

 

0.45

 

 

Ratio Analysis

22

Ned used a journal entry in which a customer currently owed $9,200 to illustrate the damaging effects of uncollectible accounts.

 

In Ned's journal entry, he debited $9,200 for __________ and entered a credit of $9,200 for __________.

 

bad debt expense; allowance for bad debts

 

 

allowance for bad debts; bad debt expense

 

 

allowance for bad debts; accounts receivable

 

bad debt expense; accounts receivable

 

 

Uncollectible Accounts

23

 

 

Based on the information above, which of the following is the straight line depreciation of the equipment?

$7,500

$7,300

$7,000

$7,700

 

Straight Line Depreciation

SmartExpert

(118)

Status NEW Posted 18 Apr 2020 11:04 AM My Price 20.00

ACC----------- 10-----------0 U-----------nit----------- 4 -----------Mil-----------est-----------one----------- So-----------phi-----------a c-----------our-----------se-----------

Attachments

file 1587208805-Milestone 4.docx preview (1584 words )

1----------- D-----------on'-----------s L-----------and-----------sca-----------pin-----------g S-----------erv-----------ice----------- pu-----------rch-----------ase-----------d a----------- ba-----------ckh-----------oeÂ----------- fo-----------r $-----------12,-----------000-----------. I-----------t h-----------as -----------a u-----------sef-----------ul -----------lif-----------e o-----------f f-----------ive----------- ye-----------ars----------- an-----------d a----------- re-----------sid-----------ual----------- va-----------lue----------- of----------- $1-----------,75-----------0.Â----------- Ba-----------sed----------- on----------- th-----------isÂ----------- in-----------for-----------mat-----------ion-----------, w-----------hat----------- is----------- th-----------e s-----------tra-----------igh-----------t-l-----------ine----------- de-----------pre-----------cia-----------tio-----------n f-----------or -----------one----------- ye-----------ar -----------for----------- th-----------is -----------ass-----------et?----------- ----------- $1-----------0,2-----------50 ----------- -----------$1,-----------025----------- ----------- $2-----------,40-----------0 ----------- $-----------2,0-----------50 ----------- CO-----------NCE-----------PT ----------- H-----------YPE-----------RLI-----------NK -----------&am-----------p;q-----------uot-----------;ht-----------tps-----------://-----------www-----------.so-----------phi-----------a.o-----------rg/-----------spc-----------c/a-----------cco-----------unt-----------ing------------2/-----------uni-----------t4/-----------stu-----------dy------------gui-----------de/-----------840-----------4&a-----------mp;-----------quo-----------t; -----------Str-----------aig-----------ht -----------Lin-----------e D-----------epr-----------eci-----------ati-----------on ----------- 2 ----------- Ex-----------ami-----------ne -----------the----------- pa-----------rti-----------al -----------bal-----------anc-----------e

Not Rated(0)

• Buy Answer