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ACCT 346 Week 4 Midterm 2

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John's insight:

Page:

1.

Question :

(TCO 1) Which of the following is not a difference between financial accounting and managerial accounting?

Points Received:

4 of 4

2.

Question :

TCO 1) Which of the following statements regarding fixed costs is true?

Points Received:

4 of 4

3.

Question :

(TCO 1) You own a car and are trying to decide whether or not to trade it in and buy a new car. Which of the following costs is an opportunity cost in this situation?

Points Received:

4 of 4

4.

Question :

(TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. How much is the budgeted variable cost per unit?

Points Received:

4 of 4

5.

Question :

(TCO 1) Which of the following is an example of a manufacturing overhead cost?

Points Received:

4 of 4

6.

Question :

(TCO 1) Product costs

Points Received:

4 of 4

7.

Question :

(TCO 1) At December 31, 2010, WDT Inc. has a balance in the Work in Process Inventory account of $62,000. At January 1, 2010, the balance was $55,000. Current manufacturing costs for the year are $292,000, and cost of goods sold is $284,000. How much is cost of goods manufactured?

Points Received:

4 of 4

8.

Question :

(TCO 2) BCS Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for August follows:

Estimated

Actual

Overhead cost

$174,000

$171,000

Direct labor hours

5,800

5,900

Direct labor cost

$87,000

$89,975




How much overhead should be applied in total during August?

Points Received:

4 of 4

9.

Question :

(TCO 2) Citrus Company incurred manufacturing overhead costs of $300,000. Total overhead applied to jobs was $306,000. What was the amount of overapplied or underapplied overhead?

Points Received:

4 of 4

10.

Question :

(TCO 3) Companies in which of the following industries would notbe likely to use process costing?

Points Received:

4 of 4

11.

Question :

(TCO 3) The Blending Department began the period with 20,000 units. During the period the department received another 80,000 units from the prior department and at the end of the period 30,000 units remained, which were 40% complete. How much are equivalent units in The Blending Department’s work in process inventory at the end of the period?

Points Received:

4 of 4

12.

Question :

(TCO 3) Ranger Glass Company manufactures glass for French doors. At the start of May, 2,000 units were in-process. During May, 11,000 units were completed and 3,000 units were in process at the end of May. These in-process units were 90% complete with respect to material and 50% complete with respect to conversion costs. Other information is as follows:

Work in process, May 1:

Direct material

$36,000

Conversion costs

$45,000

Costs incurred during May:

Direct material

$186,000

Conversion costs

$255,000




Calculate the cost per equivalent unit for conversion costs.

Points Received:

4 of 4

13.

Question :

(TCO 4) Clearance Depot has total monthly costs of $8,000 when 2,500 units are produced and $12,400 when 5,000 units are produced. What is the estimated total monthly fixed cost?

Points Received:

4 of 4

Page:

Page:

1.

Question :

(TCO 4) Which of the following will have no effect on the break-even point in units?

Points Received:

4 of 4

2.

Question :

(TCO 4) Circle K Furniture has a contribution margin ratio of 16%. If fixed costs are $176,800, how many dollars of revenue must the company generate in order to reach the break-even point?

Points Received:

4 of 4

3.

Question :

(TCO 4) Randy Company produces a single product that is sold for $85 per unit. If variable costs per unit are $26 and fixed costs total $47,500, how many units must Randy sell in order to earn a profit of $100,000?

Points Received:

4 of 4

4.

Question :

(TCO 5) In full costing, when does fixed manufacturing overhead become an expense?

Points Received:

4 of 4

5.

Question :

(TCO 5) Variable costing income is a function of:

Points Received:

4 of 4

6.

Question :

(TCO 5) Peak Manufacturing produces snow blowers. The selling price per snow blower is $100. Costs involved in production are:

Direct Material per unit

$20

Direct Labor per unit

12

Variable manufacturing overhead per unit

10

Fixed manufacturing overhead per year

$148,500


In addition, the company has fixed selling and administrative costs of $150,000 per year. During the year, Peak produces 45,000 snow blowers and sells 30,000 snow blowers. How much fixed manufacturing overhead is in ending inventory under full costing?

Points Received:

4 of 4

7.

Question :

(TCO 6) Which of the following is not a reason that companies allocate costs?

Points Received:

4 of 4

8.

Question :

(TCO 6) Which of the following statements about cost pools is not
true?

Points Received:

4 of 4

9.

Question :

(TCO 6) The building maintenance department for Jones Manufacturing Company budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases:

Production Dept. 1

Production Dept. 2

Square footage

15,000

45,000

Direct labor hours

25,000

50,000



If Jones assigns costs to departments based on square footage, how much total costs will be allocated to Production Department 1?

Points Received:

4 of 4

10.

Question :

(TCO 7) A company is currently making a necessary component in house (the company is producing the component for its own use). The company has received an offer to buy the component from an outside supplier. A machine is being rented to make the component. If the company were to buy the component, the machine would no longer be rented. The rent on the machine, in relation to the decision to make or buy the component, is:

Points Received:

4 of 4

11.

Question :

(TCO 7) Ricket Company has 1,500 obsolete calculators that are carried in inventory at a cost of $13,200. If these calculators are upgraded at a cost of $9,500, they could be sold for $22,500. Alternatively, the calculators could be sold "as is" for $9,000. What is the net advantage or disadvantage of reworking the calculators?

Points Received:

4 of 4

12.

Question :

(TCO 7) YXZ Company’s market for the Model 55 has changed significantly, and YXZ has had to drop the price per unit from $275 to $135. There are some units in the work in process inventory that have costs of $160 per unit associated with them. YXZ could sell these units in their current state for $100 each. It will cost YXZ $10 per unit to complete these units so that they can be sold for $135 each.

When the incremental revenues and expenses are analyzed, what is the financial impact?

Points Received:

4 of 4

1.

Question :

(TCO 3) What are transferred-in costs? Which departments will never have transferred-in costs?

Points Received:

20 of 20

right

2.

Question :

(TCO 7) Computer Boutique sells computer equipment and home office furniture. Currently, the furniture product line takes up approximately 50% of the company's retail floor space. The president of Computer Boutique is trying to decide whether the company should continue offering furniture or just concentrate on computer equipment. If furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of computer equipment can increase by 13%. Allocated fixed costs are assigned based on relative sales.

Computer

Home Office

Equipment

Furniture

Total

Sales

$1,200,000

$800,000

$2,000,000

Less cost of goods sold

700,000

500,000

1,200,000

Contribution margin

500,000

300,000

800,000

Less direct fixed costs:

Salaries

175,000

175,000

350,000

Other

60,000

60,000

120,000

Less allocated fixed costs:

Rent

14,118

9,882

24,000

Insurance

3,529

2,471

6,000

Cleaning

4,117

2,883

7,000

President's salary

76,470

53,350

130,000

Other

7,058

4,942

12,000

Total costs

340,292

380,708

649,000

Net Income

$159,708

($ 8,708)

$151,000



Prepare an incremental analysis to determine the incremental effect on profit of discontinuing the furniture line.

Points Received:

25 of 25

on target!

3.

Question :

(TCO 4) The following monthly data are available for RedEx, which produces only one product that it sells for $84 each. Its unit variable costs are $28 and its total fixed expenses are $64,960. Sales during April totaled 1,600 units.

(a) How much is the breakeven point in sales dollars for RedEx?
(b) How many units must RedEx sell in order to earn a profit of $24,640?
(c) A new employee suggests that RedEx sponsor a company softball team as a form of advertising. The cost to sponsor the team is $1,792. How many more units must be sold to cover this cost?

Points Received:

25 of 25

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ACCT 346 Entire Course

http://www.devrygenius.com/product/acct-346-managerial-accounting--complete-course

John's insight:

ACCT-346 Managerial Accounting - Complete Course ACCT346

Course Project on Bravo Baking Company - All 6 tabs completed

Quiz - Week 3 - 2 Sets included

Midterm - Week 4 - 2 Sets included

Quiz - Week 6 - 2 Sets included

Final Exam - Week 8

All 7 Weeks Discussions

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ACCT 212 Course Project

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John's insight:

This course has two course projects due. The first, Course Project 1, reinforces the basic principles of accounting and application of the accounting information system. It is completed in two parts. The second, Course Project 2, is an opportunity to show the ability to analyze financial statements to arrive at conclusions based upon the analysis.

Course Project 1 - Overview and Guidelines | Course Project 2 - Overview and Guidelines

Course Project 1 - Overview and Guidelines

Course Project 1 consists of two parts, A and B, respectively. There are 10 requirements for you to complete in this exercise, Part A has 1-3 and Part B has 4-10. Part A is due at the end of Week 3. Part B is due at the end of Week 5. See Syllabus/"Due Dates for Assignments & Exams" for due date information.

The Course Project 1 template has all of the information you will need to complete Parts A & B of the project. The template also includes:

Detailed Project Instructions (with requirements) A reference list of October transactions A Chart of Accounts reference sheet A Grading Rubric to help explain what is expected. Each worksheet has the Check Figures embedded as a comment.

1. Download the Excel template named ACCT212_CourseProject1 located on the Doc Sharing tab in the course shell.

2. To complete Part A (due at the end of Week 3):

Complete Requirements 1-3 on the Journal Entries, General Ledger, and Trial Balance worksheets. Type your work directly into the worksheets. Save your workbook as "CourseProject1A_ ACCT212_YourLastName". Submit your workbook to the Dropbox under "Course Project 1-Part A" by the end of Week 3. Submit your assignment to the Dropbox located on the silver tab at the top of this page. For instructions on how to use theDropbox, read these Step-by-Step Instructions or watch this Dropbox Tutorial.

3. To complete Part B (due at the end of Week 5):

Using feedback from your instructor and the worksheets from Part A, complete requirements 4-10. Type your work directly into the worksheets. Save your workbook as "CourseProject1B_ACCT212_YourLastName". Submit the workbook to the Dropbox under "Course Project 1-Part B" by the end of Week 5. Submit your assignment to the Dropbox located on the silver tab at the top of this page. For instructions on how to use theDropbox, read these Step-by-Step Instructions or watch this Dropbox Tutorial.

Course Project 2 - Overview and Guidelines

Course Project 2 consists of Problem 13-52A from your textbook. At the end of Course Project 2, you will be able to prepare common-size statements, analyze profitability; and make comparisons with the industry. Course Project 2 is due at the end of Week 7.

The Course Project 2 template has all of the information you will need to complete the project including:

Detailed requirements A worksheet to enter your solutions A Grading Rubric to help explain what is expected.

1. Download the Excel template named ACCT212_CourseProject2 located on the Doc Sharing tab in the course shell.

2. To complete Course Project 2 (due at the end of Week 7):

Using the requirements worksheet for reference, complete requirements 1-3 on the Your Solution worksheet. Type your work directly into the worksheet. Save your workbook as "CourseProject2_ACCT212_YourLastName". Submit your workbook to the Dropbox under "Course Project 2" by the end of Week 7. Submit your assignment to the Dropbox located on the silver tab at the top of this page. For instructions on how to use theDropbox, read these Step-by-Step Instructions or watch this Dropbox Tutorial.

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ACCT 212 All 7 Weeks Discussions

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John's insight:

w1 dq1 Financial Statements

w2 dq1 Prepaid Expenses vs. Unearned Revenue

w2 dq2 Accrual vs. Cash Accounting

w3 dq1 Ethical Business Decisions

w3 dq2 Trade Credit - Accounts Payable

w4 dq1 Inventory Management

w4 dq2 LIFO

w5 dq1 Non-current Assets and Related Liabilities

w5 dq2 Raising Capital (Cash)

w6 dq1 Stockholders Equity

w6 dq2 Net Income vs. Net Operating Cash

w7 dq1 Financial Statement Analysis

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ACCT 212 Final Exam

http://www.devrygenius.com/product/acct-212-final-exam-financial-accounting

John's insight:

1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (10 points) and (2) provide an example of the closing of an expense account, Salary Expense in the form of a journal entry. (10 points) (Points : 20)

2. (TCO 2) As required to complete Course Project 1, one must follow the cycle that includes 10 steps to complete the accounting cycle. (1) Explain how the debit/credit rules are used when developing journal entries (10 points) and (2) provide an example of the application of the debit/credit rules in the form of a journal entry. (10 points)(Points : 20)

3. (TCO 5) Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how limited access can satisfy the purpose of internal control (10 points) and (2) provide an example of how this control could be implemented. (10 points) (Points : 20)

4. (TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the First in First out (FIFO) method is applied (10 points) and (2) provide an example of the impact that this method of inventory valuation will have on Gross Profit. (10 points) (Points : 20)

5. (TCO 1) To evaluate the financial operation and health of a business ratio analysis is used. (1) Provide the formula for the Current Ratio and explain how it is computed (10 points) and (2) provide an example of how this ratio can be used in decision-making in business. (10 points) (Points : 20)

1. (TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles). BagODonuts’ accountant estimated that the truck’s residual value would be $2,400 at the end of its useful life. The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year. 

1. Calculate depreciation expense for the truck for each year (2010-2013) using the:
a. Straight-line method.
b. Double-declining balance method.
c. Units of Production method.
(For units-of-production and double-declining balance, round to the nearest two decimals after each step of the calculation.)
2. Which method best tracks the wear and tear on the van? 
3. Which method would BagODonuts prefer to use for income tax purposes? Explain in detail why BagODonuts prefers this method. (Points : 25)

2. (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock: Preferred Stock: 7%, par value $100 per share, 100,000 shares. Common Stock: $1 par value, 500,000 shares.

The following transactions occurred during the year:

1/19/12 – Issued 100,000 shares of common stock for $17 cash per share.
1/31/12 – Issued 3,000 shares of preferred stock for $115 cash per share.
11/1/12 – Repurchased 30,000 shares of common stock for $22 cash per share.
12/1/12 – Declared and paid a total dividend of $95,000. 

Required: 
1. Prepare the journal entry for each transaction listed above.
2. In your own words, explain the main differences between common and preferred stock.
(Points : 25)

3. (TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.

4. (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions. Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented (Points : 25)

5. (TCO2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.

Account Balance 
Common stock $5,100 
Accounts payable $4,400 
Service revenue $17,100 
Land $28,800 
Note payable $9,500 
Cash $5,200 
Dividends $6,100 
Utilities expense $2,100 
Accounts receivable $10,600 
Delivery expense $700 
Retained earnings $25,600 
Salary expense $8,200

Prepare the company’s trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter. For example, Accounts Receivable comes before Land. List the expense with the largest balance first, the expense with the next largest balance second, and so on.

(Points : 25)

6.

(TCO4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions:

Journals - Jan. 2001

Purchases

Supplier Date Received Quantity Unit Cost Amount

Donna 01/10/01 110 12.00 1320.00

Thomas 01/15/01 160 14.00 2240.00

Cindy 01/18/01 150 15.00 2250.00

Sales

Customer Date shipped Quantity Sel. Price Amount

Norilene 01/16/01 200 25.00 5000.00

1. Calculate the ending inventory, using the perpetual inventory method: 

A. Using FIFO

B. Using LIFO

C. Using Average Cost

2. Prepare the following statement 

Using

FIFO LIFO Average Cost

Sales

Cost of Sales 
Gross Profit

(Points : 25)

1. Depreciation is a process to allocate the cost of long-life assets to each period's income statement and adjusts the value of the asset on the balance sheet. (1) Explain how the Units-of-Production method is computed (10 points) and (2) provide an example of how this method could be used on a new delivery truck purchased for $25,000 to be used for 100,000 miles with a salvage value of $5,000 for year one only (25,000 miles driven in year one)

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ACCT 346 Week 8 Final Exam

http://www.devrygenius.com/product/acct-346-managerial-accounting--week-8-final-exam

John's insight:

1.

Question :

(TCO 1) The principle managers follow when they only investigate significant departures from the plan is commonly known as

Points Received:

4 of 4

2.

Question :

(TCO 1) Which of the following is not likely to be a fixed cost?

Points Received:

4 of 4

3.

Question :

(TCO 2) Which of the following is not a manufacturing cost?

Points Received:

4 of 4

4.

Question :

(TCO 2) An allocation base is

Points Received:

4 of 4

5.

Question :

(TCO 3) Equivalent units are calculated by

Points Received:

4 of 4

6.

Question :

(TCO 3) In the assembly department, all the direct materials are added at the beginning of the processing. Beginning Work in Process inventory consists of 2,000 units with a direct materials cost of $31,860. During the period, 15,000 units are started and direct materials costing $250,000 are charged to the department. If there are 1,000 units in ending inventory, what is the cost per equivalent unit?

Points Received:

4 of 4

7.

Question :

(TCO 4) Regression analysis

Points Received:

4 of 4

8.

Question :

(TCO 4) The number of units that must be sold to exactly cover its fixed and variable costs is the

Points Received:

4 of 4

9.

Question :

(TCO 5) Which of the following is treated as a product cost in variable costing?

Points Received:

4 of 4

10.

Question :

(TCO 5) If the number of units sold is less than the number of units produced

Points Received:

4 of 4

11.

Question :

(TCO 6) A contract which specifies that the suppler will be paid for the cost of production as well as some fixed amount or percentage of cost is called a(n)

Points Received:

4 of 4

12.

Question :

(TCO 6) Which of the following is not generally true when a company compares ABC and traditional costing?

Points Received:

4 of 4

13.

Question :

(TCO 7) Fixed costs that will be eliminated if a particular course of action is undertaken are called

Points Received:

4 of 4

Page:

1.

Question :

(TCO 7) Common costs

Points Received:

4 of 4

2.

Question :

(TCO 8) Target costing

Points Received:

4 of 4

3.

Question :

(TCO 8) Which of the following are relevant in deciding whether to accept or reject a special order?

Points Received:

4 of 4

4.

Question :

(TCO 9) Present value techniques

Points Received:

4 of 4

5.

Question :

(TCO 9) The internal rate of return

Points Received:

4 of 4

6.

Question :

(TCO 10) A method of budget preparation that requires all budgeted amounts to be justified by the department, even if the amounts were supported in prior periods, is called

Points Received:

4 of 4

7.

Question :

(TCO 10) Which budget is prepared first?

Points Received:

4 of 4

8.

Question :

(TCO 10) The standard cost is

Points Received:

4 of 4

9.

Question :

(TCO 10) In general, an unfavorable material variance arises from

Points Received:

4 of 4

10.

Question :

(TCO 10) The type of center that has responsibility for generating revenue as well as controlling costs is a(n)

Points Received:

4 of 4

11.

Question :

(TCO 10) Responsibility accounting holds managers responsible for

Points Received:

4 of 4

12.

Question :

(TCO 10) Which ratio measures the rate earned on total capital provided by the owners?

Points Received:

4 of 4

Page:

1.

Question :

(TCO 1) Distinguish managerial accounting from financial accounting. Include a brief discussion of the differences in the types of information provided to users as well as the differences of the users of the accounting information.

Points Received:

20 of 20

2.

Question :

(TCO 6) Booth Financial Services, LLC has two revenue producing departments, Financial Planning and Business Consulting. The accounting department is trying to determine the best method to allocate $1,000,000 of common costs (secretarial staff, reception personnel, etc), either by salary or number of employees. Information on the revenue departments are as follows:

Department

Employees

Salaries

Financial Planning

150 employees

$10,000,000

Business Consulting

50 employees

$5,000,000




(a) Allocate the $1,000,000 common costs to the two revenue departments using both methods.
(b) Why are allocations called arbitrary?

Points Received:

25 of 25

3.

Question :

(TCO 10) Charlie Corp sells it products on both credit and cash basis. Monthly sales are sold 20% for cash, 80% for credit. Credit sales are collected 40% in the month of sale and 60% the following month. Sales for the first quarter are as follows: 


January $100,000
February $150,000
March $125,000


Compute cash collections for February.

Points Received:

25 of 25

4.

Question :

(TCO 2) Acme Fireworks uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual hours worked were 195,000 and actual overhead was $978,000. 


(a) Compute the predetermined manufacturing overhead rate.
(b) Compute the applied manufacturing overhead.
(c) Compute the amount of over/under applied manufacturing overhead.

Points Received:

25 of 25

Page:

1 2 3 4

1.

Question :

(TCO 9) An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next four years. What is the investment's internal rate of return?

Points Received:

25 of 25

2.

Question :

(TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application. This year's income statement shows the following: 


Sales $1,295,000
Variable Expenses $1,023,000
Contribution margin $272,000
Fixed costs $250,000
Profit $22,000


Required:
(a) Compute the break-even point in units.
(b) Compute the contribution margin ratio.
(c) Compute the current margin of safety.
(d) How many applications must the company sell to make a profit of $350,000?

Points Received:

25 of 25

3.

Question :

(TCO 5) The following data has been taken from Air-Tite company in its first year of business. 


Units produced 100,000
Units sold 80,000
Units in ending inventory 20,000
Fixed manufacturing overhead $400,000


(a) Compute the amount of fixed manufacturing overhead that would be expensed in the current year if full absorption costing is used.
(b) Compute the amount of fixed manufacturing overhead that would be expensed in the current year if variable costing is used.
(c) Compute the amount of fixed manufacturing overhead that would be included in ending inventory under full absorption costing.

Points Received:

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ACCT 557 Final Exam

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John's insight:
1. (TCO A) Amazon Building, Inc. won a bid for a new warehouse building contract.
Below is information from the project accountant.
Total Construction Fixed Price $15,000,000
Construction Start Date June 13, 2012
Construction Complete Date December 16, 2013

As of Dec. 31… 2012 2013
Actual cost incurred $6,500,000 $4,360,000
Estimated remaining costs $5,250,000 $-
Billed to customer $5,000,000 $7,000,000
Received from customer $4,500,000 $6,500,000
Assuming Amazon Building, Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013? (Points : 5)

$4,140,000
$2,342,128
$2,390,000
$2,290,213

2. (TCO B) At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%.
Pretax income included:
Interest income from municipal bonds $15,000
Accrued warranty costs, estimated to be used in 2013 $74,000
Prepaid rent expense, will be used in 2013 $31,000
Installment sales revenue, to be collected in 2013 $56,000
Operating loss carryforward $71,000
What is taxable income for 2012? (Points : 5)

$727,000
$826,000
$915,000
$1,073,000

3. (TCO C) Presented below is pension information related to Amazing Goods, Inc. for the year 2013.
Service cost $96,000
Interest on projected benefit obligation $53,000
Interest on vested benefits $25,000
Amortization of prior service cost due to increase in benefits $10,000
Expected return on plan assets $19,000
The amount of pension expense to be reported for 2013 is (Points : 5)

$130,000.
$140,000.
$165,000.
$184,000

4. (TCO C) Apple Dumpling, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2013.
Service cost $280,000
Contributions to the plan $270,000
Actual return on plan assets $260,000
Projected benefit obligation (beginning of year) $2,900,000
Fair value of plan assets (beginning of year ) $2,700,000
The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2013 is (Points : 5)

$280,000.00.
$310,000.00.
$300,000.00.
$570,000.00

5. (TCO D) Animal, Inc. leased equipment from Zoo Enterprises under a 4-year lease requiring equal annual payments of $51,000, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. Animal, Inc.’s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Assuming that this lease is properly classified as a capital lease, what is the amount of interest expense recorded by Animal, Inc. in the first year of the asset’s life?
PV Annuity Due PV Ordinary Annuity
8%, 5 periods 4.31213 3.99271
10%, 5 periods 4.16986 3.79079 (Points : 5)

0
$13,513
$16,290
$17,593

6. (TCO E) On December 31, 2013, Bob’s Trucking, Inc. appropriately changed its inventory valuation method from weighted-average cost to FIFO method for financial statement and income tax purposes. The change will result in an $800,000 increase in the beginning inventory at January 1, 2013. Assume a 40% income tax rate. The cumulative effect of this accounting change on beginning retained earnings is (Points : 5)

$-.
$800,000.
$480,000.
$320,000

7. (TCO E) Which of the following is not a change in accounting estimate? (Points : 5)

Change in amortization period for an intangible asset.
Change from straight-line to sum-of-the-years’-digits method of depreciation.
Change because of understatement of inventory.
Change in residual value of a depreciable plant asset

8. (TCO F) Amazing Glory, Inc. recognized a net income of $95,000 including $20,500 in depreciation expense.
Additional changes from the balance sheet are as follows.
Accounts Receivable $800 decrease
Prepaid Expenses $14,000 decrease
Inventory $25,000 increase
Accrued Liabilities $6,500 decrease
Accounts Payable $12,000 increase
Compute the net cash from operating activities based on the above information. (Points : 5)

$79,000
$50,700
$110,800
$132,000

9. (TCO G) Items that affect the realizability of accounts receivable that are revealed after the balance sheet date but before the financial statements are issued should be (Points : 5)

disclosed only in the Notes to the Financial Statements.
discussed only in the MD&A (Management’s Discussion and Analysis) section of the annual report.
used to record an adjustment to Bad Debt Expense for the year ending December 31, 2013.
used to record an adjustment directly to the retained earnings account

10. (TCO G) Adventure, Inc. is a company that operates in four different divisions. The following information relating to each segment is available for 2013.
Sales revenue Operating profit (loss) Identifiable assets

A $85,000 $31,000 $56,000
B $105,000 $(16,000) $82,000
C $250,000 $112,000 $640,000
D $20,000 $4,000 $35,000

Required:
For which of the segments would information have to be disclosed in accordance with professional pronouncements? (Points : 5)

Segments A, B, C, and D
Segments A, B, and C
Segments A and B
Segments A and D

1. (TCO A) Adam’s Adorable Creations Company
Adam’s Adorable Creations Company provided the following financial information for its installment-sales for the current year.
Financial Data:
Installment sales for current year $2,500,000
Cost of goods sold on installment basis $2,000,000
Repossessed merchandise: Estimated value $32,000
Repossessed merchandise: Unpaid balances $45,000
Payments by customers $1,600,000
Required:
a) Prepare journal entries for the end of the year based on the information above.
b) Prepare the entry to record the gross profit realized in the current year.

2. (TCO B) The Accent Corporation shows the following information.
On January 1, 2012, Accent purchased a donut machine for $600,000.
A) Pretax financial income is $3,200,000 in 2012 and $3,500,000 in 2013.
B) Taxable income is expected in future years with an expected tax rate of 40%.
C) The company recognized an extraordinary gain of $200,000 in 2013 (which is fully taxable).
D) Tax-exempt municipal bonds yielded interest of $240,000 in 2013.
E) Half-year convention for 6 years for financial reporting (See Appendix 11A.)
F) Straight-line basis depreciation for 4 years for tax purposes
Required:
1) Compute taxable income and income taxes payable for 2013.
2) Prepare the journal entries for income tax expense, income taxes payable, and deferred taxes for 2013.
3) Prepare the deferred income taxes presentation for December 31, 2013 balance sheet

3. (TCO D) Absolute Leasing, Inc. agrees to lease equipment to Allen, Inc. on January 1, 2012. They agree on the following terms:
1) The normal selling price of the equipment is $600,000 and the cost of the asset to Absolute Leasing, Inc. was $475,000.
2) At the end of the lease, the equipment will revert to Absolute Leasing, Inc. and have an unguaranteed residual value of $60,000. Their implicit interest rate is 10%.
3) The lease is noncancelable with no renewal option. The lease term is 10 years (the same as the estimated economic life).
4) Absolute Leasing, Inc. incurred costs of $10,000 in negotiating and closing the lease. There are no uncertainties regarding additional costs yet to be incurred and the collectability of the lease payments is reasonably predictable.
5) The lease begins on January 1, 2012 and payments will be in equal annual installments.
6) Allen will pay all maintenance, insurance, and tax costs directly and annual payments of $65,000 on January 1 of each year.

Required:
a) Determine what type of lease this would be for the lessee and calculate the initial obligation.
b) Prepare Allen, Inc.’s amortization schedule for the lease terms.
c) Prepare all the journal entries for Allen, Inc. for 2012. Assume a calendar year fiscal year

4. (TCO F) Cash flows from operating activities (indirect and direct methods).

Presented below is the income statement of Angola, Inc.
Sales $324,000
Cost of goods sold $214,000
Gross profit $110,000
Operating expenses $67,000
Income before income taxes $43,000
Income taxes $17,200
Net income $25,800

In addition, the following information related to net changes in working capital is presented.
Debit Credit
Cash $10,600
Accounts receivable $2,400
Inventories $3,600
Salaries payable (operating expenses) $12,000
Accounts payable $15,000
Income taxes payable $1,400

Depreciation expense for the year was $14,700
Deferred tax liability account increased $1,800

Required:
Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows
-(a) using the indirect method.
-(b) using the direct method

5. (TCO G) Selected financial ratios.
The following information pertains to Allbright, Inc.
Cash $75,000
Accounts receivable $190,000
Inventory $130,000
Plant assets (net) $650,000
Total assets $1,045,000

Accounts payable $140,000
Accrued taxes and expenses payable $32,000
Long-term debt $165,000
Common stock ($10 par) $265,000
Paid-in capital in excess of par $120,000
Retained earnings $495,000
Total equities $1,045,000

Net sales (all on credit) $1,800,000
Cost of goods sold $1,200,000
General & Admin Expenses $430,000
Net income $170,000

Required
Compute the following: (It is not necessary to use averages for any balance sheet figures involved.)
(a) Current ratio
(b) Inventory turnover
(c) Receivables turnover
(d) Book value per share
(e) Earnings per share
(f) Debt to total assets
(g) Profit margin on sales
(h) Return on common stock equity

6. (TCO E) Please describe the requirements for a change in accounting principle and at least four reasons why companies might implement a change in accounting principle

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ACCT 212 Week 4 Midterm

http://www.devrygenius.com/product/acct-212-week-4-midterm
John's insight:

(TCO 1) The Accounting Equation is used to develop the organizations financial reports. (1) Describe what owners' equity values would be if Assets are $100,000 and Liabilities are $27,000 by showing the Accounting Equation (10 points) and (2) provide an explanation of what accounts could be found in owners' equity. (10 points)

(TCO 1) The financial statements present a company to the public in financial terms. (1) Which financial statement identifies where cash was generated and where it was spent during the year (10 points) and (2) identify the three major parts of this statement. (10 points)

(TCO 1) The accounting profession follows a set of guidelines for measurement and disclosure of financial information called the Generally Accepted Accounting Principles (GAAP). (1) Explain what the International Financial Reporting Standards (IFRS) are (10 points) and (2) provide an example of its application. (10 points)

(TCO 2) Transaction analysis results in the development of a journal entry. Supplies are purchased on account agreeing to pay $500 within 30 days. (1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points) and (2) explain how the Accounting Equation is impacted. (10 points)

(TCO 3) Adjusting Entries are required at the end of the period to ensure that accrual accounting principles are applied. At the beginning of the month $1,350 of office supplies were purchased. There was not a beginning balance and the one purchase was the only one for the month. At the end of the month $500 of supplies remained. Develop the adjusting entry. (1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points) and (2) explain how the Accounting Equation is impacted. (10 points)

(TCO 5) Internal Controls are required to safeguard assets and to ensure ethical business practices. (1) Identify and explain the reason for any two of the seven internal control procedures (10 points) and (2) provide examples of how your two selected internal control procedures will meet the goal of safeguarding assets and promoting ethical business practices. (15 points)

(TCO 5) The bank account as a control device helps to protect cash. One of the requirements is to conduct periodic bank statement reconciliations. Using the following data, complete the bank statement reconciliation. (Use the format shown on page 255 of your textbook) (25 points)

Prepare a bank reconciliation using B & B’s Restaurant Supply Inc.’s information for August 31.
· A NSF check from Johnny Jones for $3,164.·Two deposits made on August 31 were not on the bank statement, totaling $2,897.·The bank collected an EFT payment for Rent for $2,600.·August 31 balance in Cash was $2,005.·The owner had written check # 1598 for $500 and recorded this check as $5,000.·The balance on the bank statement as of August 31 was $5,316.·Bank service charge of $28 was shown on the bank statement.·Checks #1572, 1606, 1116, and 1242 for $419, $126, $650, and $1,105, respectively, were not shown on the bank statement, even though the company had sent the checks.

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ACCT 212 Entire Course

http://www.devrygenius.com/product/acct-212-financial-accounting--complete-course

John's insight:

Course Project - Week 3 (CP 1A), Week 5 (CP 1B) and 7(CP 2)

Week 4 Midterm

All 7 Weeks Discussions

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