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ACCT 553 Final Exam | DeVry Online Help

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1. (TCO E) For federal tax purposes, income attributable to the direct efforts of the tax payer, such as salary, is classified as:

2. (TCO D) Which of the following is an example of a nontaxable like-kind exchange?

3. (TCO H) Alex and Amy file a joint return for the 2012 tax year. Their adjusted gross income is $90,000. They had net investment income of $8,000. In 2012, they had the following interest expenses:
• Personal credit card interest: $5,000
• Home mortgage interest: $10,000
• Interest paid on qualified education loans: $2,000
• Investment interest (on loans used to buy stocks): $10,000
What is the interest deduction for Alex and Amy for the 2012 tax year?

4. (TCO B) Unreimbursed expenses of employees are considered to be deductions:

5. (TCO A) Which of the following expenditures is always an itemized deduction for individual taxpayers?

6. (TCO E) Adam sold a piece of business equipment that had an adjusted basis to him of $50,000. In return for the equipment, Adam received $80,000 cash and a painting with a fair market value of $20,000 from the buyer. The buyer also assumed Adam’s $25,000 loan on the equipment. Adam paid $5,000 in selling expenses. What is the amount of Adam’s gain on the sale?

7. (TCO I) Gary and Gerdy Gray purchased a home for $125,000 on September 15, 2010. On October 7, 2011 they were divorced, and as part of the divorce agreement, the home was transferred to Gerda, who sold the home on October 18, 2012 for $350,000. How much can Gerda exclude?

8. (TCO I) Under the accrual method of accounting, expenses are generally accrued when:

9. (TCO D) Sean, a calendar year taxpayer, purchased stock on June 18, 2011 for $8,000. The stock became worthless on June 4, 2012. What is Sean’s loss in 2012?

10. (TCO A) Which of the following is a primary source of tax authority?

11. (TCO F) A nonbusiness bad debt is deductible for tax purposes as a(n):

12. (TCO A) The art of using existing tax laws to pay the least amount of tax legally possible is known as:

13. (TCO C) Which of the following items is not taxable?

14. (TCO B) Under the terms of their divorce agreement executed in October 2011, Keith transferred Corporation M stock to his former wife, Karen, as a property settlement. At the time of the transfer, the stock had a basis to Keith of $20,000 and a fair market value of $50,000. What is the tax consequence of this transaction to Keith, and what is Karen’s basis in the Corporation M stock?

15. (TCO G) During 2012, Edward East had wages of $10,000 and received unemployment compensation of $6,200 from the state. Edward is single and 45 years old. What is the amount of unemployment compensation to be included in his gross income?

16. (TCO F) Hobby expenditures are deductible to the extent of:

1. (TCO E) In 2012, Uriah Stone received the following payments:

• Interest on refund of federal income tax for 2011: $400

• Interest on award for personal injuries in 2009 automobile accident: $300

• Interest on municipal bonds: $1,500

• United States savings bonds interest (Series H): $1,000

What amount, if any, should Mr. Stone report as interest income on his 2012 tax return?

2. (TCO G) Would any of the following items be deductible on an individual’s income tax return? If so, would the item be deductible for or from AGI? Explain each item.

(a) Hobby expenditures of $2,000 in excess of hobby gross income

(b) $3,000 loss on the sale of a personal sailboat

(c) Interest of $8,000 on money borrowed to purchase tax-exempt securities

3. (TCO F) Michael and Mary Mason sold for $380,000 in November of 2012 their residence that they had purchased in 2002 for $75,000. They made major capital improvements during their 10-year ownership totaling $25,000.

(a) What is their excluded gain? How much must they recognize?

(b) Suppose, instead, that the Masons sold their home for $720,000. They moved into a smaller house costing $220,000. What is their excluded gain? How much must they recognize?

4. (TCO G) John Baron, a professional baseball player, raises Black Angus cattle under circumstances that would indicate that the activity is a hobby. His adjusted gross income for the year is $50,000, and he has $500 of other miscellaneous itemized deductions, all of which are subject to the two-percent floor. During the taxable year, the feed for the cattle cost $1,500. The income from the sale of cattle was $1,400.

(a) Under the hobby loss rule, to what extent is the expense of $1,500 deductible?

(b) Under the two-percent-of-adjusted-gross-income limitation, how much is the overall deductible amount of his itemized deductions?

5. (TCO I) Rick, a single individual with a salary of $45,000, incurred and paid the following expenses during the year:

Student loan interest: $800

Medical expenses: $5,000

Alimony: $11,000

Mortgage interest on personal residence: $3,000

State income taxes: $4,000

Moving expenses: $1,500

Contribution to a traditional IRA: $2,000

Analyze the above expenses, and determine which ones are deductible for AGI. Please support your position.

6. (TCO I) Kim had the following transactions for 2012:

Salary: $48,000

Damage award (compensatory) for city bus accident: $18,000

Loss on sale of stock investment: $5,600

Loan from father to purchase auto: $14,000

Alimony paid to ex-wife: $8,000

What is Kim’s AGI for 2012?

7. (TCO F) Sara owns a sole proprietorship, and Phil is the sole shareholder of a C (regular) corporation. Each business sustained a $9,000 operating loss and a $2,000 capital loss for the year. Evaluate how these losses will affect the taxable income of the two owners?

8. (TCO B) Dave forms a corporation and transfers property having a basis to him of $22,000 and a fair market value of $29,000 to the corporation for 1,000 shares of $11 par stock. One year later, Hank transfers property having a basis to him of $3,500 and a fair market value of $4,500 for 100 shares of the stock. Hank is not related to Dave. The corporation issued no other stock.
(a) How much gain does Dave recognize on his exchange? What is the basis to Dave of his 1,000 shares?
(b) What gain or loss is recognized by the corporation when it issues its shares to Dave? What is the basis to the corporation of the property it received from Dave?
(c) What is the gain or loss that Hank recognizes on this transaction, and what is his basis in his 100 shares?

9. (TCO F) In 2012, OK Company had a net loss of $82,000 from operations. Jane owns OK Company and works 20 hours a week in the business. She has a large amount of income from other sources and is in the 35% marginal tax bracket. Would Jane’s tax situation be better if OK Company were a proprietorship or a C corporation? Explain why.

10. (TCO H) On May 18, 2012, Sara purchased 30 shares of ABC stock for $210, and on October 29, 2012, she purchased 90 additional shares for $900. On November 28, 2012, she sold 48 shares, which could not be specifically identified, for $576, and on December 8, 2012, she sold another 25 shares for $150. What is her recognized gain or loss?

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ACCT 505 Final Exam | DeVry Online Help

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1. (TCO F) Buckhorn Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below. Estimated machine hours – 85,000 Estimated variable manufactruring overhead – $5.55 per machine hour Estimated total fixed manufacturing overhead – $951,888 Compute the company’s predetermined overhead rate.

2. (TCO F) Payment Inc. is preparing its cash budget for February. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $136,000 and budgeted cash disbursements total $128,000. The desired ending cash balance is $50,000. The company can borrow up to $110,000 at any time from a local bank, with interest not due until the following month.

3. (TCO C) Nic Saybin Enterprises Accounting Department collects all pertinent monthly operating data. Selected data is presented below for the current month. From the data provided, please provide Saybin Enterprises Management with a flexible budget analysis to see how costs were controlled

4. (TCO D) McMullen Co. manufactures automatic door openers. The company uses 15,000 electronic hinges per year as a component in the assembly of the openers. You have been engaged by McMullen to assist with an evaluation of whether the company should continue producing the hinges or purchase them from an outside vendor.

5. (TCO E) Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below:

6. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just completed year.

7. (TCO F) Carter Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

8. (TCO G) (Ignore income taxes in this problem.) Five years ago, the City of Paranoya spent $30,000 to purchase a computerized radar system called W.A.S.T.E. (Watching Aliens Sent To Earth). Recently, a sales rep from W.A.S.T.E. Radar Company told the city manager about a new and improved radar system that can be purchased for $50,000. The rep also told the manager that the company would give the city $10,000 in trade on the old system. The new system will last 10 years. The old system will also last that long but only if a $4,000 upgrade is done in 5 years. The manager assembled the following information to use in the decision regarding which system is more desirable:

(TCO B) Madlem, Inc., produces and sells a single product whose selling price is $240.00 per unit and whose variable expense is $86.40 per unit. The company’s fixed expense is $720,384 per month.

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ACCT 504 Final Exam | DeVry Online Help

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1. (TCO A) Which of the following is an advantage of the sole proprietorship relative to the corporate form of business organization?

2. (TCO A) Dividends _____.

3. (TCOs A, B) Below is a partial list of account balances for LBJ Company

4. (TCOs B, E) Why is the accrual basis of accounting preferred by GAAP?

5. (TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the highest amount of net income?

6. (TCOs A, E) Equipment was purchased for $75,000 on January 1, 2011. Freight charges of $3,200 were incurred and there was a cost of $6,000 for installation. It is estimated the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense for 2011 using the straight-line method will be _____

7. (TCO D,G) Payne Corporation issues 100 twenty-year, 6%, $1,000 bonds dated July 1, 2010, at 94. The journal entry to record the issuance will show a _____.

8. (TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $100,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____.

9. (TCO F) If you are making comparisons within a company to detect changes in financial relationships and significant trends, you are performing what type of analysis?

10. (TCO F) The formula for performing horizontal analysis is _____.

11. (TCO F) Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time _____.

12. (TCO F) A common measure of liquidity is _____

13. (TCO F) Short-term creditors would be most interested in which of the following ratios?

14. (TCO G) To calculate the market value of a bond, we need to _____.

1. (TCO A) Use the following partial financial statement information below to calculate the liquidity and profitability ratios. This information can be used to correctly solve each of the ratios below

2. (TCO D) The Oxford Company has budgeted sales revenues as follows

3. (TCOs B, E) The following items are taken from the financial statements of Lansing Company for 2010

4. (TCO D) Your friend James has hired you to evaluate the following internal control procedures

5. (TCOs D, E) Please prepare the following journal entries. Indicate which account should be debited with the abbreviation DR in front of the account name and which account should be credited with the abbreviation CR in front of the account name along with the dollar amount of the debit and credit

6. (TCO C) Please indicate which section of the statement of cash flows should contain each of the following items and whether each item would result in an inflow or outflow of cash. The sections are Operating, Investing, and Financing

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ACCT 346 Final Exam | DeVry Online Help

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

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

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

4. (TCO 2) An allocation base is

5. (TCO 3) Equivalent units are calculated by

6. (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?

7. (TCO 4) Regression analysis

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

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

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

11. (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)

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

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

 

1. (TCO 7) Common costs

2. (TCO 8) Target costing

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

4. (TCO 9) Present value techniques

5. (TCO 9) The internal rate of return

6. (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

7. (TCO 10) Which budget is prepared first?

8. (TCO 10) The standard cost is

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

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

11. (TCO 10) Responsibility accounting holds managers responsible for

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

1. (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.

2. (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

3. (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:

4. (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

 

1. (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?

2. (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

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

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ACCT 301 Final Exam

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1. (TCO 10) Not all pricing methods apply to the market place.  In manufacturing it is common practice to determine the cost of a product as it moves through it transformation to a finished product. (1) Explain how a transfer price could be used to make other financial decisions (10 points) and (2) provide an example of the application of transfer price data (10 points). (Points : 20)

2. (TCO 11) Terry LeMay is unclear as to the difference between the income statement of a merchandising company and a manufacturing company.  (1) Describe and provide an example of an income statement of a merchandising company and (2) compare to an example of an income statement of a manufacturing company (10 points). (Points : 20)

3. (TCO 3) Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how proper approvals 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 7) To promote better management control of business centers financial responsibilities are assigned to managers. There are three basic types of responsibility centers.  (1) Explain how a investment center operates (10 points) and (2) provide an example of its application in business. (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 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 8)  Planning for capital investments is an important function of management.  You are responsible for considering purchasing new equipment for $450,000.  It is expected that the equipment will produce net annual cash flows of $55,000 over its 10-year useful life.  Annual depreciation will be $45,000.  Compute the cash payback period.  (1) Explain the pros and cons of using this method to evaluate a capital expenditure (10 points) and (2)  show all computations required to arrive at the correct solution. (15 points). (Points : 25)

2. (TCO 6)  To adequately plan for the success of the business a budget must be developed.  (1) Indicate the benefits of budgeting (10 points) and (2) state the essentials of effective budgeting (15 points).  Include textbook page references to identify where the correct answer was located. (Points : 25)

3. (TCO 4) Financial statement analysis is used by investors, creditors and managers of business to evaluate the operation and health of the business.  This information is in part the basis for decision making.  (1) Identify ratios use to evaluate the ability to pay current and long-term liabilities (10 points) and (2) provide an example of how the results of this analysis could be used to make business decisions. (15 points). (Points : 25)

4. (TCO 2) There are three different forms of business; sole-proprietor, partnership and corporation.  (1) Explain why a corporation’s taxation may not be considered a positive (10 points) and (2) as a stockholder explain why a stockholder would want to own common stock. (15 points). (Points : 25)

5. (TCO 5) Allgood Inc. has fixed costs of $480,000.  It has a unit selling price of $6, unit variable cost of $4.50, and a target net income of $1,500,000.  Compute the required sales in units to achieve its target net income.  (1) Explain how the analysis is to be performed (10 points) and (2) Show all computations required to arrive at the correct answer. (20 points). (Points : 30)

6. (TCO 9) Warsaw Products has a factory machine with a book value of $90,000 and a remaining useful life of 4 years.  A new machine is available at a cost of $250,000.  This machine will have a 4-year useful life with no salvage value.  The new machine will lower annual variable manufacturing costs from $600,000 to $500,000.  Prepare an analysis showing whether the old machine should be replaced or retained.  (1) Explain how the analysis is to be performed (10 points) and (2) Show all computations required to arrive at the correct answer. (20 points). (Points : 30)

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ACCT 550 Final Exam

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1. (TCO A) Listed below are several information, characteristics, and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application

2. (TCO B) Adjusting Entries: Unearned rent at 1/1/10 was $5,300 and at 12/31/10 was $6,000. The records indicate cash receipts from rental sources during 2010 amounted to $60,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit

3. (TCO B) Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Interest receivable at 1/1/10 was $1,000. During 2010 cash received from debtors for interest on outstanding notes receivable amounted to $1,000. The 2010 income statement showed interest revenue in the amount of $2,900. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit.

4. (TCO B) Adjusting Entries: Accumulated depreciation-machinery at 1/1/10 was $150,000. At 12/31/10, the balance of the account was $300,000. During 2010, one piece of equipment was sold. The equipment had an original cost of $100,000 and was 1/2 depreciated when sold. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

5. (TCO B) Adjusting Entries: Allowance for doubtful accounts on 1/1/10 was $70,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $70,000 and during 2010 bad debts written off amounted to $40,000. You are to provide the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

1. (TCO B) Adjusting Entries: Prepaid rent at 1/1/10 was $30,000. During 2010 rent payments of $100,000 were made and charged to “rent expense.” The 2010 income statement shows as a general expense the item “rent expense” in the amount of $130,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit.

2.(TCO B) Adjusting Entries: Retained earnings at 1/1/10 were $100,000 and at 12/31/10 it was $300,000. During 2010, cash dividends of $40,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. For each journal entry write Dr. for debit and Cr. for credit.

3. (TCO C) Presented below is information related to Bruce Van Company.

4. (TCO D) The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011 Purple Company Balance Sheet as of December 31, 2011

5. (TCO E) Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $2,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors

6. (TCO F) Daniels Company deposits all receipts and makes all payments by check. The following information is available from the cash records:

7. (TCO G) Rye Company was formed on December 1, 2010. The following information is available from Rye’s inventory record for Product Bread

8. (TCO H) A machine cost $500,000 on April 1, 2010. Its estimated salvage value is $50,000 and its expected life is eight years.
Instructions
Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used.
(a) Straight-line for 2010
(b) Double-declining balance for 2011
(c) Sum-of-the-years’-digits for 2011

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ACCT 504 Final Exam (Set 3) | DeVry Online Help

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1. (TCO A) Which one of the following is an advantage of corporations relative to partnerships and sole proprietorships?

2. (TCO A) When a corporation distributes a dividend, _____.

3. (TCOs A, B) Below is a partial list of account balances for Cerner Company

4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____.

5. (TCO D) Three companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____.

6. (TCOs A, E) Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be _____.

7. (TCOs D, G) Mendez Corporation issues 2,000 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 103. The journal entry to record the issuance will show a _____.

8. (TCO C) Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____.

9. (TCO F) One variation of the horizontal analysis is known as _____.

10. (TCO F) In a common-size balance sheet, the 100% figure is _____.

11. (TCO F) In vertical analysis, the base amount for studying salary and wages expense is generally _____.

12. (TCO F) A common measure of profitability is the _____.

13. (TCO F) Return-on-assets ratio is most closely related to _____.

14. (TCO G) To calculate the market value of a bond, we need to _____.

1. (TCO A) Below you will find selected information (in millions) from Coca-Cola Co.’s 2012 Annual Report:

2. (TCO B) The following selected data was retrieved from the Wal-Mart, Inc. financial statements for the year ending January 31, 2013:

3. (TCO C) Please review the following real-world Hewlett Packard Statement of Cash flows and address the 2 questions below:

4. (TCO D) You are CFO of Goforit, Inc., a wholesale distribution company specializing in emerging technologies. Your CEO is a brilliant marketer, but relies on you to explain issues and choices in accounting and finance. She has heard from other members of a CEO organization to which she belongs that a company’s net income can vary widely depending on which accounting choices are made from the “GAAP menu.”

Assuming the goal is to maximize net income, choose an accounting treatment from each of the following scenarios, and explain to your CEO why the choice will produce the desired effect on reported Net Income for the current year. Include in your answer the effect of the choice on both the income statement and balance sheet.

Required:

a. Goforit carries significant electronics inventory in a competitive environment where prices are actually falling. Which inventory valuation method would you choose—LIFO, FIFO, or average cost? Assume that unit purchases exceed unit sales.

b. Goforit has a large investment in warehouse equipment including conveyor belts, forklifts, and automated packaging systems. Which depreciation method would you choose: Straight line (SL) or double declining balance (DDB)?

5. (TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below.

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ACCT 346 Final Exam (Set 2) | DeVry Online Help

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(TCO 1) Performance reports often compare current period performance with

(TCO 1) A company has a cost that is $2.00 per unit at a volume of 12,000 units and $2.00 per unit at a volume of 16,000 units. What type of cost is this?

(TCO 2) Which of the following is a manufacturing cost?

(TCO 2) An allocation base is

(TCO 3) Equivalent units are calculated by

(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?

(TCO 4) The range of activity for which estimates of cost behavior are likely to be accurate is the

(TCO 4) Beaudreaux Motors is operating at its break-even point of 16,000 units. Which of the following statements is not true?

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

(TCO 5) When the number of units sold is equal to the number of units produced, net income using full costing will be

(TCO 6) A major problem with cost-plus contracts is that they

(TCO 6) Which of the following steps is not involved in the ABC approach?

(TCO 7) Which of the following is not a term used to describe the additional costs incurred as a result of selecting one decision over another?

(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

(TCO 6) Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance. Costs of these departments are allocated to two revenue producing departments, domestic and international flights. Costs for the service departments are not separated into fixed and variable and the totals are as follows

(TCO 10) Gina’s Boutique makes custom jewelry. One item, the guru necklace, is a best seller and sales in units for the first quarter are as follows:

(TCO 2) Coyote Trading uses a predetermined manufacturing overhead rate of $12 per machine hour. Last year the company had actual overhead of $898,000 and 75,000 machine hours.

(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?

(TCO 4) Legal Beagals 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:

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

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ACCT 301 Final Exam (Set 2) | DeVry Online Help

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1.(TCO 1) What is the accounting equation? Suppose your company sold $12,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation?(Points : 17)

2.(TCO 2) What are the four basic financial statements? Describe the balance sheet, and explain why it is important.(Points : 17)

3.(TCO 3) What is the Sarbanes-Oxley Act? Do you think this act has more importance for the accounting profession or for investors? Why?(Points : 17)

4.(TCO 4) What is horizontal analysis of financial statements? How does horizontal analysis differ from vertical analysis?(Points : 17)

1.(TCO 8) Why is capital budgeting important? What is the IRR method? How is it calculated?(Points : 26)

2.(TCO 9) What are five different types of decisions that could use incremental analysis? What are the relevant costs in a make-or-buy decision?(Points : 26)

3.(TCO 10) How is a transfer price determined? Describe the cost-based method. Do you think it is better than the market-based method?(Points : 26)

4.(TCO 11) What are direct materials? Give an example of a direct material. How do direct materials differ from indirect materials? Give an example of an indirect material.(Points : 26)

1.(TCO 5) What is CVP analysis? Why is this an important analysis for a company to perform?(Points : 26)

2.(TCO 6) What is an operating budget? What does it result in? What is the first step in completing an operating budget?(Points : 26)

3.(TCO 7) What is responsibility accounting? What is a cost center? How does a cost center differ from a profit center?(Points : 26)

1.(TCO 8) Why is capital budgeting important? What is the IRR method? How is it calculated? (Points : 26)

2.(TCO 9) What are five different types of decisions that could use incremental analysis? What are the relevant costs in a make-or-buy decision? (Points : 26)

3.(TCO 10) How is a transfer price determined? Describe the cost-based method. Do you think it is better than the market-based method? (Points : 26)

4.(TCO 11) What are direct materials? Give an example of a direct material. How do direct materials differ from indirect materials? Give an example of an indirect material. (Points : 26)

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ACCT 212 Final Exam | DeVry Online Help

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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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