ACCT504 Week 4 Midterm Exam v3 Complete Solution

Question: #9304

ACCT504 Week 4 Midterm Exam v.3 A++ Graded 1.Question : (TCO A, B, C) External users want answers to all of the following questions except: 2.Question :(TCO C) Debt securities sold to investors that must be repaid at a particular date some years in the future are called: 3.Question :(TCO C) Which activities involve putting the resources of the business into action to generate a profit? 4.Question :(TCO A) The cost of assets consumed or services used is also known as: 5.Question :(TCO C) Finley Company recorded the following cash transactions for the year: Paid $90,000 for salaries. Paid $40,000 to purchase office equipment. Paid $10,000 for utilities. Paid $4,000 in dividends. Collected $150,000 from customers. What was Finley's net cash provided by operating activities? 6.Question :(TCO A) In a classified balance sheet, assets are usually classified as: 7.Question :(TCO A) An intangible asset: 8.Question :(TCO A) These are selected account balances on December 31, 2007. -Land (location of the corporation's office building) $200,000 -Land (held for future use) 300,000 -Corporate Office Building 1,200,000 -Inventory 400,000 -Equipment 900,000 -Office Furniture 200,000 -Accumulated Depreciation 600,000 What is the total NET amount of property, plant, and equipment that will appear on the balance sheet? 9.Question :(TCO B) For 2010, Ford Corporation reported net income of $15,000; net sales $200,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share? 10.Question :(TCO B) Liondale Corporation had beginning retained earnings of $2,292,000 and ending retained earnings of $2,499,000. During the year, they issued common stock totaling $141,000. There were no dividends issued. What was their net income for the year? 11.Question :(TCO D) Is the purchase of equipment treated as an expense at the time of purchase? Why or why not? 12.Question :(TCO D) The left side of an account is: 13.Question :(TCO D) The classification and normal balance of the dividend account is: 14.Question :(TCO D) In recording an accounting transaction in a double-entry system: 15.Question :(TCO D) Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner? 1.Question :(TCO E) The time period assumption states that: 2.Question :(TCO E) In a merchandising business, revenue may be considered earned when: 3.Question :(TCO E) Expenses sometimes make their contribution to revenue in a different period than when the expense is paid. When wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the first period? 4.Question :(TCO E) The following is selected information from M Corporation for the fiscal year ending October 31, 2010: Cash received from customers $300,000 Revenue earned 350,000 Cash paid for expenses 170,000 Expenses incurred 200,000 Based on the accrual basis of accounting, what is M Corporation's net income for the year ending October 31, 2010? 5.Question :(TCO E) Adjusting entries are made to ensure that: 6.Question :(TCO A, B) A perpetual inventory system would most likely be used by a(n): 7.Question :(TCO B) Hunter Company purchased merchandise inventory with an invoice price of $3,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Hunter Company pays within the discount period? 8.Question :(TCO A, B) Lindy's Market recorded the following events involving a recent purchase of merchandise: Received goods for $80,000, terms 2/10, n/30. Returned $2,000 of the shipment for credit. Paid $500 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's merchandise inventory: 9.Question :(TCO A) The factor which determines whether or not goods should be included in a physical count of inventory is: 10.Question :(TCO A) Barnes Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count? 11.Question :(TCO A) A problem with the specific identification method is that: 12.Question :(TCO A) Which of the following statements is true regarding inventory cost flow assumptions? 13.Question :(TCO A) In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory? 14.Question :(TCO B) The figure for which of the following items is determined at a different time under the perpetual inventory method than under the periodic method? 15.Question :(TCO B) The primary source of revenue for a retailer is: 1.Question :(TCO D) Describe the process of preparing a trial balance. What is the purpose of preparing a trial balance? If a trial balance does not balance, identify what might be the reasons why it does not balance. If the trial balance does balance, does that insure that the ledger accounts are correct? Explain. 2.Question :(TCOs B & E) The Caltor Company gathered the following condensed data for the year ended December 31, 2010: Cost of goods sold $ 710,000 Net sales 1,279,000 Administrative expenses 239,000 Interest expense 68,000 Dividends paid 38,000 Selling expenses 45,000 Instructions: Prepare a multiple-step income statement for the year ended December 31, 2010. Compute the profit margin ratio and gross profit rate. Caltor Company s assets at the beginning of the year were $770,000 and were $830,000 at the end of the year. To qualify for full credit, you must state the formula you are using, show your computations and explain your findings.

Solution: #9341

ACCT504 Week 4 Midterm Exam v3 Graded

A+ Please look at the attach...