ACC 610 Financial Reporting MCQs

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Description

At Ruth Company, events and transactions during 2012 included the following. The tax rate for all items is 30%.
(1) Depreciation for 2010 was found to be understated by $60,000.
(2) A strike by the employees of a supplier resulted in a loss of $50,000.
(3) The inventory at December 31, 2010 was overstated by $80,000.
(4) A flood destroyed a building that had a book value of $1,000,000. Floods are very uncommon in that area.
The effect of these events and transactions on 2012 net income net of tax would be

$777,000.

$833,000.

$35,000.

$735,000.

Prophet Corporation has an extraordinary loss of $600,000, an unusual gain of $420,000, and a tax rate of 40%. At what amount should Prophet report each item?
Extraordinary loss Unusual gain

$(600,000) $420,000

(360,000) 252,000

(600,000) 252,000

(360,000) 420,000

 In 2012, Benfer Corporation reported net income of $280,000. It declared and paid common stock dividends of $32,000 and had a weighted average of 70,000 common shares outstanding. Compute the earnings per share to the nearest cent.

$4.00

$3.54

$2.80

$3.60

Multiple Choice Question

Moorman Corporation reports the following information:
Correction of understatement of depreciation expense
in prior years, net of tax $ 615,000
Dividends declared 480,000
Net income 1,500,000
Retained earnings, 1/1/12, as reported 3,000,000
Moorman should report retained earnings, 12/31/12, as adjusted at

$4,665,000.

$4,020,000.

$3,405,000.

$2,355,000.

Multiple Choice Question

Korte Company reported the following information for 2012:
Sales revenue $1,500,000
Cost of goods sold 1,050,000
Operating expenses 165,000
Unrealized holding gain on available-for-sale securities 60,000
Cash dividends received on the securities 6,000
For 2012, Korte would report comprehensive income of

$291,000.

$345,000.

$60,000.

$351,000.

Multiple Choice Question

For Randolph Company, the following information is available:
Capitalized leases $ 560,000
Trademarks 180,000
Long-term receivables 210,000
In Randolph’s balance sheet, intangible assets should be reported at

$770,000

$210,000

$740,000

$180,000

Multiple Choice Question

Presented below are data for Antwerp Corp.
2012 2013 2014
Assets, January 1 $ 2,600 $ 3,360 ?
Liabilities, January 1 1,680 ? $ 2,016
Stockholders’ Equity, Jan. 1 ? ? 2,100
Dividends 560 420 476
Common Stock 504 448 500
Stockholders’ Equity, Dec. 31 ? ? 1,596
Net Income 560 448 ?
Stockholders’ Equity at January 1, 2012 is

$920

$1,424

$504

$560

Multiple Choice Question

Presented below are data for Caracas Corp.
2012 2013 2014
Assets, January 1 $ 3,800 $ 4,560 ?
Liabilities, January 1 2,280 ? $ 2,736
Stockholders’ Equity, Jan. 1 ? ? 2,750
Dividends 760 570 646
Common Stock 684 608 650
Stockholders’ Equity, Dec. 31 ? ? 2,166
Net Income 760 684 ?
Net income for 2014 is

$138 income.

$138 loss.

$584 income.

$62 income.
Multiple Choice Question

During 2012 the DLD Company had a net income of $55,000. In addition, selected accounts showed the following changes:
Accounts Receivable $ 3,000 increase
Accounts Payable 1,000 increase
Building 4,000 decrease
Depreciation Expense 1,500 increase
Bonds Payable 8,000 increase
What was the amount of cash provided by operating activities?

$64,500

$56,500

$54,500

$55,000

Multiple Choice Question

Packard Corporation reports the following information:
Net cash provided by operating activities $ 235,000
Average current liabilities 150,000
Average long-term liabilities 100,000
Dividends declared 60,000
Capital expenditures 110,000
Payments of debt 35,000
Packard’s cash debt coverage ratio is

2.35

1.59

3.92

0.94
Multiple Choice Question

(78.)
Measures of how effectively the company uses its assets are

liquidity ratios.

activity ratios.

coverage ratios.

profitability ratios.

Multiple Choice Question

Charlie Corp. is purchasing new equipment with a cash cost of $150,000 for an assembly line. The manufacturer has offered to accept $34,440 payment at the end of each of the next six years. How much interest will Charlie Corp. pay over the term of the loan?

$56,640.

$184,440.

$34,440.

$150,000.

Multiple Choice Question

John Jones won a lottery that will pay him $2,000,000 after twenty years. Assuming an appropriate interest rate is 5% compounded annually, what is the present value of this amount?

$753,780.

$24,924,420.

$2,000,000.

$5,306,600.

Multiple Choice Question

Jane wants to set aside funds to take an around the world cruise in four years. Jane expects that she will need $10,000 for her dream vacation. If she is able to earn 8% per annum on an investment, how much will she have to set aside today so that she will have sufficient funds available?

$2,219.

$13,604.

$7,350.

$6,806

Multiple Choice Question

Renfro Corporation will invest $50,000 every December 31st for the next six years (2012 – 2017). If Renfro will earn 12% on the investment, what amount will be in the investment fund on December 31, 2017?

$454,450.

$205,570

$230,240.

$405,760.

Multiple Choice Question

What would you pay for an investment that pays you $20,000 at the end of each year for the next ten years and then returns a maturity value of $300,000 after ten years? Assume that the relevant interest rate for this type of investment is 8%.

$273,158.

$138,958.

$134,202.

$144,936

Multiple Choice Question

What would you pay for an investment that pays you $15,000 at the end of each year for the next twenty years? Assume that the relevant interest rate for this type of investment is 12%.

$1,080,786.

$112,042.

$15,550.

$125,487.

Multiple Choice Question

The market price of a $500,000, ten-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10% is

$562,311.

$566,635.

$936,180.

$561,445.

Exercise 6-3

Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.)

(a) What is the future value of $8,160 at the end of 7 periods at 8% compounded interest? (Round answers to 0 decimal places, e.g. $458,581.)
The future value $

(b) What is the present value of $8,160 due 8 periods hence, discounted at 11%? (Round answers to 0 decimal places, e.g. $458,581.)
The present value $

(c) What is the future value of 16 periodic payments of $8,160 each made at the end of each period and compounded at 10%? (Round answers to 0 decimal places, e.g. $458,581.)
The future value $

(d) What is the present value of $8,160 to be received at the end of each of 18 periods, discounted at 5% compound interest? (Round answers to 0 decimal places, e.g. $458,581.)
The present value

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