UOP ACC 291 Final NEW

UOP ACC 291 Final NEW

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Question 21
If a plant asset is retired and is fully depreciated
phantom depreciation must be taken as though the asset were

still on the books.
a gain on disposal will be recorded.
a loss on disposal will be recorded.
no gain or loss on disposal will be recorded.

Multiple Choice Question 86
An aging of a company's accounts receivable indicates that
$4,500 are estimated to be uncollectible. If Allowance for
Doubtful Accounts has a $1,200 credit balance, the adjustment

to record bad debts for the period will require a
• debit to Bad Debt Expense for $4,500.

• debit to Bad Debt Expense for $3,300.
• credit to Allowance for Doubtful Accounts for $4,500.
• debit to Allowance for Doubtful Accounts for $3,300.

Multiple Choice Question 182
The financial statements of the Melton Manufacturing Company

reports net sales of $300,000 and accounts receivable of
$50,000 and $30,000 at the beginning of the year and end of
year, respectively. What is the average collection period for

accounts receivable in days?
• 60.8
• 96.1
• 36.5
• 48.7

Multiple Choice Question 119
Stine Company purchased machinery with a list price of
$64,000. They were given a 10% discount by the manufacturer.
They paid $400 for shipping and sales tax of $3,000. Stine
estimates that the machinery will have a useful life of 10 years
and a residual value of $20,000. If Stine uses straight-line

depreciation, annual depreciation will be
• $3,760.
• $4,072.

• $6,100.
• $4,100.

Multiple Choice Question 198

Given the following account balances at year end, compute the
total intangible assets on the balance sheet of Janssen
Enterprises.

Cash $1,500,000

Accounts Receivable 4,000,000

Trademarks 1,000,000

Goodwill 2,500,000

Research & Development Costs 2,000,000

• $7,500,000.

• $5,500,000.

• $3,500,000.

• $9,500,000.

Multiple Choice Question 207

On January 1, a machine with a useful life of five years and a
residual value of $40,000 was purchased for $120,000. What is

the depreciation expense for year 2 under the double-
declining-balance method of depreciation?

• $38,400.

• $48,000.

• $23,040.

• $28,800.

IFRS Multiple Choice Question 01

As a recent graduate of State University you're aware that IFRS
requires component depreciation for plant assets. A friend has
asked you to succinctly explain what component depreciation
means. Which of the following correctly describes component

depreciation?

• The method that requires that significant parts of a
plant asset with different useful lives be depreciated
separately.

• The method used to ensure that the depreciation rate
remains constant from year to year.

• The method used to prorate annual depreciation on a
time basis.

• The method of depreciation recommended for an asset
that is expected to be significantly more productive in the first

half of its useful life.

Multiple Choice Question 146

Bonds with a face value of $300,000 and a quoted price of 97¼
have a selling price of

• $292,500.

• $291,075.

• $291,750.

• $291,006.

Multiple Choice Question 188

Sparks Company received proceeds of $423,000 on 10-year, 8%
bonds issued on January 1, 2013. The bonds had a face value of
$400,000, pay interest annually on December 31st, and have a

call price of 102. Sparks uses the straight-line method of
amortization. What is the carrying value of the bonds on

January 1, 2015?

• $400,000

• $420,700

• $418,400

• $381,600

Multiple Choice Question 90

S. Lawyer performed legal services for E. Corp. Due to a cash
shortage, an agreement was reached whereby E. Corp. would
pay S. Lawyer a legal fee of approximately $15,000 by issuing
8,000 shares of its common stock (par $1). The stock trades on
a daily basis and the market price of the stock on the day the
debt was settled is $1.80 per share. Given this information, the
best journal entry for E. Corp. to record for this transaction is

• Legal Expense 14,400

Common Stock 8,000

Paid-in Capital in Excess of Par - Common 6,400
7,000
• Legal Expense 15,000

Common Stock 15,000

• Legal Expense 15,000

Common Stock 8,000

Paid-in Capital in Excess of Par - Common

• Legal Expense 14,400

Common Stock 14,400

Multiple Choice Question 110

Logan Corporation issues 50,000 shares of $50 par value
preferred stock for cash at $60 per share. The entry to record
the transaction will consist of a debit to Cash for $3,000,000

and a credit or credits to

• Preferred Stock for $2,500,000 and Paid-in Capital in
Excess of Par Value—Preferred Stock for $500,000.

• Preferred Stock for $2,500,000 and Retained Earnings
for $500,000.

• Paid-in Capital from Preferred Stock for $3,000,000.

• Preferred Stock for $3,000,000.

IFRS Multiple Choice Question 01

Jahnke Corporation issued 8,000 shares of €2 par value
ordinary shares for €11 per share. The journal entry to record

the sale will include
• a credit to Share Capital–Ordinary for €88,000.

• a debit to Retained Earnings for €72,000.
• a debit to Cash for €16,000.

• a credit to Share Premium–Ordinary for €72,000.

Multiple Choice Question 80
Zoum Corporation had the following transactions during 2014:

1. Issued $125,000 of par value common stock for cash.
2. Recorded and paid wages expense of $60,000.

3. Acquired land by issuing common stock of par value
$50,000.

4. Declared and paid a cash dividend of $10,000.
5. Sold a long-term investment (cost $3,000) for cash of

$3,000.
6. Recorded cash sales of $400,000.
7. Bought inventory for cash of $160,000.
8. Acquired an investment in Zynga stock for cash of $21,000.
9. Converted bonds payable to common stock in the amount

of $500,000.
10. Repaid a 6 year note payable in the amount of $220,000.

What is the net cash provided by financing activities?
• $395,000.

• $<605,000>.
• $<105,000>.

• $115,000.

Multiple Choice Question 176
Colie Company had an increase in inventory of $120,000. The
cost of goods sold was $490,000. There was a $30,000 decrease

in accounts payable from the prior period. Using the direct
method of reporting cash flows from operating activities, what

were Colie's cash payments to suppliers?
• $580,000.
• $370,000.
• $310,000.
• $640,000.

IFRS Multiple Choice Question 04
Each of the following items may be classified as operating or

financing activities under IFRS except
• dividends paid.

• dividends received.
• interest paid. (Incorrect)

• all of these answer choices may be classified as such.

Multiple Choice Question 165
The current assets of Orangatte Company are $227,500. The
current liabilities are $130,000. The current ratio expressed as

a proportion is
• 1.75:1.
• 175%.
• $210,000 ÷ $120,000.
• .57:1.

Multiple Choice Question 41
All of the following requirements about internal controls were

enacted under the Sarbanes Oxley Act of 2002 except:
• independent outside auditors must eliminate redundant

internal control.
• companies must continually assess the functionality of

internal controls.
• independent outside auditors must attest to the level of

internal control.
• companies must develop sound internal controls over

financial reporting.

Multiple Choice Question 85
Which of the following is not an internal control activity for

cash?
• The number of persons who have access to cash should

be limited.
• The functions of record keeping and maintaining

custody of cash should be combined.
• Surprise audits of cash on hand should be made

occasionally.
• All cash receipts should be recorded promptly.

Multiple Choice Question 92
Before a check authorization is issued, the following documents

must be in agreement, except for the
• purchase order.
• invoice.

• remittance advice.
• receiving report.

Multiple Choice Question 115
Mitchell Corporation bought equipment on January 1, 2014
.The equipment cost $180,000 and had an expected salvage
value of $30,000. The life of the equipment was estimated to be

6 years. The book value of the equipment at the beginning of
the third year would be

• $50,000.

• $180,000.

• $150,000.

• $130,000.

Multiple Choice Question 142

Brevard Corporation purchased a taxicab on January 1, 2013
for $25,500 to use for its shuttle business. The cab is expected

to have a five-year useful life and no salvage value. During
2014, it retouched the cab's paint at a cost of $1,200, replaced

the transmission for $3,000 (which extended its life by an
additional 2 years), and tuned-up the motor for $150. If
Brevard Corporation uses straight-line depreciation, what

annual depreciation will Brevard report for 2014?

• $4,100.

• $5,100.

• $4,125.

• $3,900.

Multiple Choice Question 164

On July 1, 2014, Fleming Company sells machinery for
$120,000. The machinery originally cost $300,000, had an
estimated 5-year life and an expected salvage value of $50,000.

The Accumulated Depreciation account had a balance of
$175,000 on January 1, 2014, using the straight-line method.

The gain or loss on disposal is
• $20,000 gain.
• $5,000 loss.
• $10,000 loss.
• $5,000 gain.

Multiple Choice Question 180
On July 1, 2014, Linden Company purchased the copyright to
Norman Computer Tutorials for $140,000. It is estimated that
the copyright will have a useful life of 5 years. The amount of
Amortization Expense recognized for the year 2014 would be

• $14,000.
• $25,900.
• $28,000.
• $13,125.

Multiple Choice Question 120
The following totals for the month of April were taken from the

payroll records of Metz Company.
Salaries $30,000

FICA taxes withheld 2,295

Income taxes withheld 6,600
Medical insurance deductions 1,200

Federal unemployment taxes 240
State unemployment taxes 1,500
The entry to record accrual of employer’s payroll taxes would

include a
• credit to FICA Taxes Payable for $1,740.
• credit to Payroll Tax Expense for $1,740.
• debit to Payroll Tax Expense for $4,035.
• credit to Payroll Tax Expense for $4,035.

Multiple Choice Question 242
Thayer Company purchased a building on January 2 by signing

a long-term $2,520,000 mortgage with monthly payments of
$23,100. The mortgage carries an interest rate of 10 percent.
The amount owed on the mortgage after the first payment will

be
• $2,499,000.
• $2,496,900.
• $2,520,000.
• $2,517,900.

Multiple Choice Question 96

The following data is available for BOX Corporation at
December 31, 2014:

Common stock, par $10 (authorized 30,000 shares)
$250,000

Treasury stock (at cost $15 per share) $1,200

Based on the data, how many shares of common stock are
outstanding?

• 30,000.

• 24,920.

• 25,000.

• 29,920. (Incorrect)

Multiple Choice Question 144

Indicate the respective effects of the declaration of a cash
dividend on the following balance sheet sections:

Total Assets Total Liabilities Total Stockholders' Equity

• Decrease Increase Decrease

• Increase Decrease No change

• Decrease No change Increase

• No change Increase Decrease

Multiple Choice Question 102

Assume the following cost of goods sold data for a company:
2015 $1,300,000
2014 1,200,000
2013 1,000,000

If 2013 is the base year, what is the percentage increase in cost
of goods sold from 2013 to 2015?
• 30%
• 70%
• 130%
• 20%

Multiple Choice Question 179
A company has an average inventory on hand of $75,000 and its
average days in inventory is 36.5 days. What is the cost of goods

sold?
• $1,680,000
• $876,000
• $750,000
• $1,752,000

Multiple Choice Question 199

The following information is available for Patterson Company:

2014 2013

Accounts receivable $ 360,000 $ 340,000

Inventory 280,000 320,000

Net credit sales 3,000,000 2,600,000

Cost of goods sold 1,500,000 840,000

Net income 300,000 170,000

The accounts receivable turnover for 2014 is

• 4.3 times.

• 8.6 times.

• 7.6 times.

• 8.3 times.

Multiple Choice Question 221

All of the following situtations below might indicate a company
has a low quality of earnings except

• Maintenance costs are capitalized and then depreciated
(Incorrect).

• Revenue is recognized when earned.

• A lack of disclosure about guaranteed payments that
were mentioned in the MD&A of the annual report.

• Adoption of a different inventory method for each of the
last three years.

IFRS Multiple Choice Question 05

IFRS

• implies that receivables with different characteristics
should be reported as one unsegregated amount.

• implies that receivables with different characteristics
should be reported separately.

• requires that receivables with different characteristics
should be reported as one unsegregated amount.

• requires that receivables with different characteristics
should be reported separately.