Question 1

 

 

 

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      An accrual of wages expense would produce what effect on the balance sheet?

Select one:

a. Decrease assets and decrease liabilities

b. Decrease liabilities and increase earned capital

c. Increase expenses and increase liabilities

d. Increase liabilities and decrease earned capital 

Question 2

 

 

 

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A company records an adjusting journal entry to record $5,000 depreciation expense. Which of the following describes the entry?

Select one:

a. Debit Depreciation expense and Credit Cash

b. Debit Property Plant and Equipment and Credit Depreciation expense

c. Debit Property Plant and Equipment and Credit Cash

d. Debit Depreciation expense and Credit Accumulated Depreciation: Property Plant and Equipment 

Question 3

 

 

 

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A list of assets, liabilities and equity can be found on which of the following?

Select one:

a. Statement of Stockholders' Equity

b. Statement of Assets and Liabilities

c. Statement of Cash Flows

d. Balance Sheet 

e. Income Statement

Question 4

In

 

 

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All of the following are potentially dilutive in computing diluted EPS except:

Select one:

a. Warrants

b. All of the above are dilutive securities

c. Employee stock options

d. Convertible bonds

e. Convertible preferred stock InIn

Question 5

In

 

 

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American Airlines' 2011 balance sheet reported the following (in millions)

 

Total Assets

$23,589

Total Liabilities

32,626

Contributed Capital

$  4,455

 

 

What was American Airlines' Total liabilities and Stockholders' Equity at December 31, 2011?

Select one:

a. $23,589 million

b. $32,626 million

c. There is not enough information to determine the answer.

d. $  4,455 million

e. $37,081 million InIn

Question 6

 

 

 

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As of 2012, Sommers Corp. has $10 par, 5% preferred stock, 4,000 shares outstanding, and $1 par common stock with 20,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2009. If the company wants to distribute $2 per share to the common stockholders in 2012, what is the total amount of dividends that the company must pay in the current year?

Select one:

a. $46,000 

b. $2,000

c. None of the above

d. $40,000

e. $6,000

Question 7

 

 

 

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Assets are recorded in the balance sheet in order of:

Select one:

a. Historic Value

b. Market Value

c. Liquidity 

d. Maturity

e. None of the above

Question 8

 

 

 

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Caterpillar Inc. reports net income for fiscal 2011 of $4,928 million, retained earnings at the end of the year of $25,219 million, dividends during the year of $1,176 million and other transactions that increased retained earnings by $83 million. What was the company's retained earnings balance at the start of fiscal 2011?

Select one:

a. $29,054 million

b. There is not enough information to calculate the amount.

c. $21,550 million

d. $21,384 million 

e. $28,888 million

Question 9

 

 

 

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Central Supply purchased a new printer for $30,000. The printer is expected to operate for eight (8) years, after which it will be sold for salvage value (estimated to be $3,000).  How much is the first year's depreciation expense if the company uses the double-declining-balance method?

Select one:

a. $3,375

b. $7,500 

c. $5,625

d. None of the above

e. $3,750

Question 10

 

 

 

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During fiscal 2009, Black & Decker Corporation reported Net income of $132.5 million and paid dividends of $47.3 million.  Which of the following describes how these transactions would affect Black and Decker's equity accounts? (in millions)

Select one:

a. Increase earned capital by $85.2 

b. None of the above

c. Increase contributed capital by $85.2

d. Decrease contributed capital by $47.3 and increase earned capital by $132.5

e. Increase contributed capital by $132.5 and decrease earned capital by $47.3

Question 11

 

 

 

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Elgin Experts, Inc., declares a small stock dividend of 17% of the outstanding shares of common stock. Currently, Elgin Experts has 1,400,000 shares of $1 par value common stock outstanding. The current market price of the stock is $82.53 per share. Elgin Experts will record a stock dividend of:

Select one:

a. $1,400,000

b. None of the above

c. $115,542,000

d. $19,642,140 

e. $19,404,140

Question 12

 

 

 

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How would a sale of $200 of inventory on credit affect the balance sheet if the cost of the inventory sold was $80?

Select one:

a. It would decrease noncash assets by $80 and decrease equity by $80

b. It would increase noncash assets by $200 and increase equity by $200

c. Both A and B, above happen simultaneously 

d. None of the above

e. It would increase cash by $200 and increase equity by $200

Question 13

 

 

 

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In 2011, Southwest Airlines had negative net working capital of $(188) million and current assets of $4,345 million. The firm's current liabilities are:

Select one:

a. There is not enough information to calculate the amount.

b. $4,533 million 

c. $4,157 million

d. $188 million

e. $4,345 million

Question 14

 

 

 

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In times of falling prices, choosing LIFO over FIFO as an inventory cost method would affect the financial statements as follows:

Select one:

a. Cost of goods sold will be lower and ending inventory will be higher 

b. None of the above

c. Cost of goods sold will be higher and ending inventory will be lower

d. Cost of goods sold will be lower and ending inventory will be lower

e. Cost of goods sold will be higher and ending inventory will be higher

Question 15

 

 

 

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On December 31, 2010, Harley-Davidson, Inc., reported, on its Form 10-K, the following (in millions):

 

 

2010

2009

Total assets

$9,431

$9,156

Total sales

4,859

4,782

Net income

   147

  (55)

 

 

Calculate return on assets (ROA) for 2010.

Select one:

a. 9.7%

b. 71.5%

c. None of the above

d. 1.6% 

e. 51.5%

Question 16

 

 

 

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On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions):

 

                                                                                                    2011                           2010

                                    Total expenses before taxes                 $10,452.40         $9,759.10

                                    Operating income                                    1,728.50           1,419.40

                                    Net earnings                                             1,248.00              948.30

 

What amount of revenues did Starbucks report for the year ending October 2, 2011?

Select one:

a. $12,180.90

b. $11,700.40 

c. None of the above

d. $10,452.40

e. $ 8,723.90

Question 17

 

 

 

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The 2010 balance sheet of E.I. du Pont de Nemours and Company shows average DuPont shareholders' equity of $8,247 million, net operating profit after tax of $3,435 million, net income attributable to DuPont of $3,031 million, and common shares issued of 1,004 million. Assume the company has no preferred shares issued. DuPont's return on equity (ROE) for the year is:

Select one:

a. 30.4%

b. 36.8% 

c. 88.2%

d. 41.7%

e. There is not enough information to calculate the ratio.

Question 18

 

 

 

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The 2012 annual report of Oracle Corporation included the following information relating to their allowance for doubtful accounts: Balance in allowance at the beginning of the year $372 million, accounts written off during the year of $141 million, balance in allowance at the end of the year $323 million. What did Oracle Corporation report as bad debt expense for the year?

Select one:

a. $190 million

b. None of the above

c. $182 million

d. $49 million

e. $92 million 

Question 19

In

 

 

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Tickets Now contracts with the producer of Riverdance to sell tickets online. Tickets Now charges each customer a fee of $4 per ticket and receives $10 per ticket from the producer. Tickets Now does not take control of the ticket inventory. Average ticket price for the event is $150. How much revenue should Tickets Now recognize for each Riverdance ticket sold?

Select one:

a. $14 because both the fee from the customer and the producer are earned

b. $186 because the $140 is cost of goods sold paid to the Riverdance producer

c. $4 because the $10 from the producer is similar to a negative cost of goods sold

d. $150 because the $140 is cost of goods sold paid to the Riverdance producer

e. None of the above InIn

Question 20

 

 

 

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Which of the following groups would likely not be interested in the financial statements of a large public company such as Berkshire Hathaway?

Select one:

a. Shareholders

b. Competitors

c. None of the above 

d. Taxing agencies

e. Employees

Question 21

 

 

 

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Which one of the following items is not a component of contributed capital?

Select one:

a. All of the above

b. Retained earnings 

c. Additional paid-in capital

d. Preferred stock

e. Common stock

Question 22

 

 

 

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Why might a company repurchase its own stock?

Select one:

a. All of the above 

b. To offset dilutive effects of employee stock options granted

c. To improve earnings per share by reducing the denominator

d. It believes that the market undervalues its shares

e. To recognize an economic gain when the treasury shares are later sold for a profit

Question 23

Complete

 

 

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Whole Foods reports the following items in their financial statements: (3 points).

 

($ thousands) 2010

Average assets $3,884,964

Sales 9,005,794

Net income 245,833

 

Compute ROA: __________________________________             

Compute PM: ___________________________________               

Compute Asset Turnover Ratio: _____________________               

 

 

Question 24

Complete

 

 

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The following balance sheet items, listed in alphabetical order, are available from the records of iDot.com company at December 31, 2011.    

 

Accounts payable $ 18,255

Accounts receivable 69,180

Accumulated depreciation- automobile 22,500

Accumulated depreciation-buildings 40,000

Automobiles 112,500

Bonds payable, due December 31, 2014 160,000

Buildings 200,000

Capital stock, $10 par value 150,000

Cash 13,230

Income taxes payable 6,200

Interest payable 1,500

Land 250,000

Long-term investments 85,000

Notes payable, due June 30, 2012 10,000

Office supplies 2,340

Paid-in capital in excess of par value 50,000

Patents 40,000

Prepaid rent 1,500

Retained earnings 311,095

Salaries and wages payable 4,200

 

Prepare in good form (and proper format) a classified balance sheet as of December 31, 2011. (23 points).  (Points will be taken off if not in good form and proper format.)

Compute iDot.com’s current ratio. (2 points).

 

Question 25

Complete

 

 

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Prepare journal entries to record the following transactions for World Foods, Inc. (in thousands). (16 points)

Sell stock in company for $14,000

Obtain long-term bank loan of $10,000.

Purchase manufacturing equipment for $6,800 cash.

Rent manufacturing and warehousing space and pay $1,400 in advance for the year.

Manufacture $10,000 of inventory. Of the total, $8,000 was the cost of raw materials purchased on credit. The balance was wages to manufacturing employees paid in cash.

Sell half of the inventory manufactured, for $11,300 on account.

Pay $7,000 to creditors.

Make loan payment of $1,600 of which interest is $160 and the rest is principal.

 

Question 26

Complete 

Question text

Carpenter Theatre purchased a new projector costing $44,000 on January 1, 2012. Because of changing technologies, the projector is estimated to last eight years after which it will be obsolete and have a salvage value of $4,000 as a collectors’ item.  Compute the depreciation expense and ending book value for the fifth  year, using the following methods: (6 points)

The straight-line method

150% declining-balance method

 

Question 27

Complete

 

 Question text

Big Apple Company’s inventory records for year 2011 are as follows: (6 points)

Year 2011 Number of Units Cost per Unit Total Cost

Beginning Inventory 3,300 $2.95 $9,735

First purchase 2,600 3.10 8,060

Second purchase 3,100 3.10 9,610

Third purchase 2,400 3.25 7,800

Fourth purchase 1,900 3.45 6,555

Goods available for sale 13,300  

Units sold during the year 12,000  

        

Compute the cost of ending inventory and cost of goods sold for 2011, using the following inventory costing methods: 

FIFO

LIFO

Weighted Average

 

 

 

4th Purchase                    1,900 x 3.45= 6,555

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Status NEW Posted 04 Jul 2017 09:07 PM My Price 25.00

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