# Accounting Exam questions

\$63.00

Category:

## Description

Pleas take a look attachment below.

1.

 The following standards for variable overhead have been established for a company that makes only one product:

 Standard hours per unit of output 6.0 hours Standard variable overhead rate \$14.00 per hour
 The following data pertain to operations for the last month:

 Actual hours 9,500 hours Actual total variable overhead cost \$125,150 Actual output 1,570 units

 Required: a. What is the variable overhead rate variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Variable overhead rate variance \$ (Click to select) F U None

 b. What is the variable overhead efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Variable overhead efficiency variance \$ (Click to select) F U None

2.

 The following labor standards have been established for a particular product:

 Standard labor hours per unit of output 4.4 hours Standard labor rate \$20.20 per hours
 The following data pertain to operations concerning the product for the last month:

 Actual hours worked 7,000 hours Actual total labor cost \$142,100 Actual output 1,500 units

 Required: a. What is the labor rate variance for the month?(Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Labor rate variance \$ (Click to select) F U None

 b. What is the labor efficiency variance for the month?(Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Labor efficiency variance \$ (Click to select) F U None

3.

 Silmon Corporation makes a product with the following standard costs:

 Standard Quantity or Hours Standard Price or Rate Direct materials 5.6 grams \$ 5.00 per gram Direct labor 0.5 hours \$ 12.00 per hour Variable overhead 0.5 hours \$ 2.00 per hour

 In June the company produced 4,900 units using 28,690 grams of the direct material and 2,650 direct labor-hours. During the month the company purchased 24,800 grams of the direct material at a price of \$4.80 per gram. The actual direct labor rate was \$12.60 per hour and the actual variable overhead rate was \$1.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.

 Required: Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase:(Input all amounts as positive values. Do not round intermediate calculations. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 a. Direct materials quantity variance \$ (Click to select) F U None b. Direct materials price variance \$ (Click to select) F U None c. Direct labor efficiency variance \$ (Click to select) F U None d. Direct labor rate variance \$ (Click to select) F U None e. Variable overhead efficiency variance \$ (Click to select) F U None f. Variable overhead rate variance \$ (Click to select) F U None

4.

 The following materials standards have been established for a particular product:

 Standard quantity per unit of output 4.7 grams Standard price \$13.00 per grams

 The following data pertain to operations concerning the product for the last month:

 Actual materials purchased 3,600 grams Actual cost of materials purchased \$ 41,940 Actual materials used in production 2,900 grams Actual output 550 units
 The direct materials purchases variance is computed when the materials are purchased.
 Required: a. What is the materials price variance for the month?(Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Materials price variance \$ (Click to select) F U None

 b. What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Materials quantity variance \$ (Click to select) F U None The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:

 â€¢ Actual variable manufacturing overhead cost incurred: \$25,260 â€¢ Actual machine-hours worked: 2,800 hours â€¢ Variable overhead rate variance: \$5,220 Unfavorable â€¢ Total variable overhead spending variance: \$7,260 Unfavorable The variable overhead efficiency variance for July is:

\$12,480
Unfavorable

\$12,480
Favorable

\$2,040
Unfavorable

\$2,040
Favorable

6

 A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.

 Standard hours per unit of output 5.40 machine-hours Standard variable overhead rate \$11.67 per machine-hour

 The following data pertain to operations for the last month:

 Actual hours 8,900 machine-hours Actual total variable manufacturing overhead cost \$95,880 Actual output 1,500 units

 What is the variable overhead efficiency variance for the month?

\$3,152 U

\$7,033 F

\$9,336 U

\$7,033 U

7.

 The following labor standards have been established for a particular product:
 Standard labor-hours per unit of output 9.2 hours Standard labor rate \$16.10 per hour
 The following data pertain to operations concerning the product for the last month:
 Actual hours worked 11,300 hours Actual total labor cost \$179,105 Actual output 1,800 units
 What is the labor rate variance for the month?

\$2,825 F

\$450 U

\$2,825 U

\$450 F

 The Fischer Corporation uses a standard costing system. The following data have been assembled for December:
 Actual direct labor-hours worked 5,200 hours Standard direct labor rate \$12 per hour Labor efficiency variance \$3,000 unfavorable
 The standard hours allowed for December’s production is:

4,700
hours

4,950
hours

5,200
hours

5,450
hours

9.

 Krizum Industries makes heavy construction equipment. The standard for a particular crane calls for 24 direct labor-hours at \$16 per direct labor-hour. During a recent period 1,500 cranes were made. The labor rate variance was zero and the labor efficiency variance was \$5,600 unfavorable. How many actual direct labor-hours were worked?

41,600

36,000

36,350

34,500

10.

 Blue Corporation’s standards call for 3,200 direct labor-hours to produce 1,600 units of product. During May 1,450 units were produced and the company worked 1,500 direct labor-hours. The standard hours allowed for May production would be:

3,200
hours

1,500
hours

2,900
hours

1,750
hours

11.

 The Wright Company has a standard costing system. The following data are available for September:
 Actual quantity of direct materials purchased 50,000 pounds Standard price of direct materials \$5 per pound Material price variance \$5,000 unfavorable Material quantity variance \$3,500 favorable
 The actual price per pound of direct materials purchased in September is:(Round your answer to 2 decimal places.)

\$4.87

\$5.00

\$5.10

\$5.13

12.

 Holtrop Corporation has received a request for a special order of 9,100 units of product Z74 for \$46.60 each. The normal selling price of this product is \$51.70 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product Z74 is computed as follows:
 Direct materials \$17.40 Direct labor 6.70 Variable manufacturing overhead 3.90 Fixed manufacturing overhead 6.80 Unit product cost \$34.80

 Direct labor is a variable cost. The special order would have no effect on the company’s total fixed manufacturing overhead costs. The customer would like some modifications made to product Z74 that would increase the variable costs by \$6.30 per unit and that would require a one-time investment of \$46,100 in special molds that would have no salvage value. This special order would have no effect on the company’s other sales. The company has ample spare capacity for producing the special order.

 Required: Determine the effect on the company’s the incremental net operating income of accepting the special order.(Omit the “\$” sign in your response.)

 Incremental net operating income \$

13.

 Humes Corporation makes a range of products. The company’s predetermined overhead rate is \$17 per direct labor-hour, which was calculated using the following budgeted data:

 Variable manufacturing overhead \$ 80,000 Fixed manufacturing overhead \$ 260,000 Direct labor-hours 20,000
 Management is considering a special order for 710 units of product J45K at \$65 each. The normal selling price of product J45K is \$76 and the unit product cost is determined as follows:
 Direct materials \$ 38.00 Direct labor 17.00 Manufacturing overhead applied 17.00 Unit product cost \$ 72.00

 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order.

 Required: If the special order were accepted, what would be the impact on the company’s overall profit?(Input the amount as a positive value. Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the “\$” sign in your response.)

 Total (Click to select) decrease increase in profit \$

14.

 Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs \$43 to buy from farmers and \$14 to crush in the company’s plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for \$19 or processed further for \$18 to make the end product industrial fiber that is sold for \$51. The beet juice can be sold as is for \$34 or processed further for \$22 to make the end product refined sugar that is sold for \$51.

 How much more profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is?

\$(63)

\$(5)

\$(37)

\$(20)

15.

 Brown Corporation makes four products in a single facility. These products have the following unit product costs:
 Products A B C D Direct materials \$17.10 \$21.00 \$14.00 \$16.70 Direct labor 19.10 22.50 16.90 10.90 Variable manufacturing overhead 5.90 7.10 9.60 6.60 Fixed manufacturing overhead 29.00 15.90 16.00 18.00 Unit product cost \$71.10 \$66.50 \$56.50 \$52.20

Additional data concerning these products are listed below.

 Products A B C D Grinding minutes per unit 2.20 1.25 0.80 1.10 Selling price per unit \$86.20 \$78.60 \$75.40 \$70.10 Variable selling cost per unit \$2.85 \$3.55 \$4.30 \$5.00 Monthly demand in units 4,500 3,500 3,500 5,500.00
 The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines. Direct labor is a variable cost in this company.

Which product
makes the MOST profitable use of the grinding machines?

Product A

Product B

Product D

Product C

16.

 Broze Company makes four products in a single facility. These products have the following unit product costs:

 Products A B C D Direct materials \$14.90 \$10.80 \$11.60 \$11.20 Direct labor 20.00 28.00 34.20 41.00 Variable manufacturing overhead 4.90 3.30 3.20 3.80 Fixed manufacturing overhead 27.10 35.40 27.20 37.80 Unit product cost \$66.90 \$77.50 \$76.20 \$93.80

 Additional data concerning these products are listed below.

 Products A B C D Grinding minutes per unit 4.40 5.90 4.90 4.00 Selling price per unit \$76.70 \$94.10 \$88.00 \$104.80 Variable selling cost per unit \$2.80 \$1.80 \$3.90 \$2.20 Monthly demand in units 4,600 4,600 3,600 2,600

 The grinding machines are potentially the constraint in the production facility. A total of 54,200 minutes are available per month on these machines.

 Direct labor is a variable cost in this company.

 How many minutes of grinding machine time would be required to satisfy demand for all four products?

55,180

17,740

54,200

75,420

17.

 Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 52,000 units per month is as follows:
 Direct materials \$48.60 Direct labor \$9.30 Variable manufacturing overhead \$2.30 Fixed manufacturing overhead \$19.70 Variable selling & administrative expense \$4.20 Fixed selling & administrative expense \$20
 The normal selling price of the product is \$110.10 per unit. An order has been received from an overseas customer for 3,200 units to be delivered this month at a special discounted price. This order would have no effect on the company’s normal sales and would not change the total amount of the company’s fixed costs. The variable selling and administrative expense would be \$2.40 less per unit on this order than on normal sales. Direct labor is a variable cost in this company.
 Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is \$88.40 per unit. By how much would this special order increase (decrease) the company’s net operating income for the month?

\$(63,000)

\$21,440

\$84,480

\$(50,240)

18

 The management of Freshwater Corporation is considering dropping product C11B. Data from the company’s accounting system appear below:

 Sales \$929,000 Variable expenses \$408,500 Fixed manufacturing expenses \$343,000 Fixed selling and administrative expenses \$250,000

 All fixed expenses of the company are fully allocated to products in the company’s accounting system. Further investigation has revealed that \$210,500 of the fixed manufacturing expenses and \$121,500 of the fixed selling and administrative expenses are avoidable if product C11B is discontinued.

 What would be the effect on the company’s overall net operating income if product C11B were dropped?

Overall
net operating income would decrease by \$188,500.

Overall
net operating income would increase by \$72,500.

Overall
net operating income would decrease by \$72,500.

Overall
net operating income would increase by \$188,500.

One way restriction message

You may not interact with questions in this series after
you have submitted them.

Ok

19.

 Tawstir Corporation has 300 obsolete personal computers that are carried in inventory at a total cost of \$432,000. If these computers are upgraded at a total cost of \$120,000, they can be sold for a total of \$180,000. As an alternative, the computers can be sold in their present condition for \$30,000.
 What is the net advantage or disadvantage to the company from upgrading the computers rather than selling them in their present condition?

\$480,000

\$60,000

\$150,000

20.

 Consider the following production and cost data for two products, L and C:

 Product L Product C Contribution margin per unit \$24 \$18 Machine-hours needed per unit 2 hours 1 hours

 The company can only perform 10,000 machine hours each period, due to limited skilled labor and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period?

rev:
01_23_2015_QC_CS-5061

\$170,000

\$177,500

\$180,000

\$190,000

21.

 A customer has requested that Inga Corporation fill a special order for 2,800 units of product K81 for \$32 a unit. While the product would be modified slightly for the special order, product K81’s normal unit product cost is \$17.70:

 Direct materials \$ 5.20 Direct labor 3.00 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 7.20 Unit product cost \$17.70

 Direct labor is a variable cost. The special order would have no effect on the company’s total fixed manufacturing overhead costs. The customer would like modifications made to product K81 that would increase the variable costs by \$1.30 per unit and that would require an investment of \$16,000 in special molds that would have no salvage value.

 This special order would have no effect on the company’s other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company’s overall net operating income would increase (decrease) by:

\$40,560

\$(15,700)

\$16,200

\$(2,600)

22.

 Wiacek Corporation has received a request for a special order of 4,200 units of product F65 for \$26.80 each. Product F65’s unit product cost is \$26.20, determined as follows:
 Direct materials \$2.50 Direct labor 7.80 Variable manufacturing overhead 6.90 Fixed manufacturing overhead 9.00 Unit product cost \$26.20
 Direct labor is a variable cost. The special order would have no effect on the company’s total fixed manufacturing overhead costs. The customer would like modifications made to product F65 that would increase the variable costs by \$3.20 per unit and that would require an investment of \$21,000 in special molds that would have no salvage value. This special order would have no effect on the company’s other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company’s overall net operating income would increase (decrease) by:

\$(31,920)

\$5,880

\$2,520

\$(51,240)

23.

 Farnsworth Television makes and sells portable television sets. Each television regularly sells for \$270. The following cost data per television are based on a full capacity of 15,500 televisions produced each period:
 Direct materials \$60 Direct labor \$40 Manufacturing overhead (70% variable, 30% unavoidable fixed) \$40
 A special order has been received by Farnsworth for a sale of 2,600 televisions to an overseas customer. The only selling costs that would be incurred on this order would be \$11 per television for shipping. Farnsworth is now selling 7,600 televisions through regular distributors each period. What should be the minimum selling price per television in negotiating a price for this special order?

\$270

\$128

\$140

\$139

One way restriction message

You may not interact with questions in this series after
you have submitted them.

Ok

24.

 Barrus Corporation makes 39,000 motors to be used in the productions of its power lawn mowers. The average cost per motor at this level of activity is as follows:
 Direct materials \$9.80 Direct labor \$8.80 Variable manufacturing overhead \$3.60 Fixed manufacturing overhead \$4.55
 This motor has recently become available from an outside supplier for \$24.85 per motor. If Barrus decides not to make the motors, none of the fixed manufacturing overhead would be avoidable and there would be no other use for the facilities. If Barrus decides to continue making the motor, how much higher or lower will the company’s net operating income be than if the motors are purchased from the outside supplier? Assume that direct labor is a variable cost in this company.

\$74,100
lower

\$243,750
higher

\$103,350
higher

\$177,450
higher

One way restriction message

You may not interact with questions in this series after
you have submitted them.

Ok

25.

 The management of Heider Corporation is considering dropping product H58S. Data from the company’s accounting system appear below:
 Sales \$980,000 Variable expenses \$394,000 Fixed manufacturing expenses \$376,000 Fixed selling and administrative expenses \$256,000
 In the company’s accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that \$245,000 of the fixed manufacturing expenses and \$206,000 of the fixed selling and administrative expenses are avoidable if product H58S is discontinued. What would be the effect on the company’s overall net operating income if product H58S were dropped?

Overall
net operating income would decrease by \$46,000.

Overall
net operating income would increase by \$135,000.

Overall
net operating income would increase by \$46,000.

Overall
net operating income would decrease by \$135,000.

One way restriction message

You may not interact with questions in this series after
you have submitted them.

Ok

26.

 Fabio Corporation is considering eliminating a department that has a contribution margin of \$29,000 and \$71,000 in fixed costs. Of the fixed costs, \$13,500 cannot be avoided. The effect of eliminating this department on Fabio’s overall net operating income would be:

a decrease of \$42,000.

an increase of \$42,000.

a decrease of \$28,500.

an increase of \$28,500.

One way restriction message

You may not interact with questions in this series after
you have submitted them.

Ok

## Reviews

There are no reviews yet.

# Accounting Exam questions.

\$26.00

Category:

## Description

Â 1.
.mheducation.com/1325270302974288326.tp4?REQUEST=SHOWmedia&showActualMedia=true&media=,”>
 The following standards for variable overhead have been established for a company that makes only one product:
 Â Â Â Â Â Standard hours per unit of output 6.0 Â hours Â Â Standard variable overhead rate \$14.00 Â per hour
Â
 The following data pertain to operations for the last month:
 Â Â Â Â Â Actual hours 9,500 Â hours Â Â Actual total variable overhead cost \$125,150 Â Â Â Â Actual output 1,570 Â units
 Required: a. What is the variable overhead rate variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)
 Â Â Variable overhead rate variance \$ Â Â (Click to select)FUNone
 b. What is the variable overhead efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)
 Variable overhead efficiency variance \$ (Click to select)FUNone

—————————————————————————————————————–

2.

 The following labor standards have been established for a particular product:

 Standard labor hours per unit of output 4.4 hours Standard labor rate \$20.20 per hours

 The following data pertain to operations concerning the product for the last month:

 Actual hours worked 7,000 hours Actual total labor cost \$142,100 Actual output 1,500 units

 Required: a. What is the labor rate variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Labor rate variance \$ (Click to select)FUNone

 b. What is the labor efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Labor efficiency variance \$ (Click to select)FUNone

————————————————————————————————————–

3.

Silmon Corporation makes a product with the following standard costs:

 Standard Quantity or Hours Standard Price or Rate Direct materials 5.6 grams \$ 5.00 per gram Direct labor 0.5 hours \$ 12.00 per hour Variable overhead 0.5 hours \$ 2.00 per hour

 In June the company produced 4,900 units using 28,690 grams of the direct material and 2,650 direct labor-hours. During the month the company purchased 24,800 grams of the direct material at a price of \$4.80 per gram. The actual direct labor rate was \$12.60 per hour and the actual variable overhead rate was \$1.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.

 Required: Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: (Input all amounts as positive values. Do not round intermediate calculations. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 a. Direct materials quantity variance \$ (Click to select)FUNone b. Direct materials price variance \$ (Click to select)FUNone c. Direct labor efficiency variance \$ (Click to select)FUNone d. Direct labor rate variance \$ (Click to select)FUNone e. Variable overhead efficiency variance \$ (Click to select)FUNone f. Variable overhead rate variance \$ (Click to select)FUNone

—————————————————————————————————————

4.

 The following materials standards have been established for a particular product:

 Standard quantity per unit of output 4.7 grams Standard price \$13.00 per grams

 The following data pertain to operations concerning the product for the last month:

 Actual materials purchased 3,600 grams Actual cost of materials purchased \$ 41,940 Actual materials used in production 2,900 grams Actual output 550 units

 The direct materials purchases variance is computed when the materials are purchased.

 Required: a. What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Materials price variance \$ (Click to select)FUNone

 b. What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “\$” sign in your response.)

 Materials quantity variance \$ (Click to select)FUNone
———————————————————————————————————–

## Reviews

There are no reviews yet.

# Accounting exam questions

\$26.00

Category:

## Description

During
2007, Taub Company issued at 104 three hundred, \$1,000 bonds due in ten years.
One detachable stock warrant entitling the holder to purchase 15 shares of Taub
s common stock was attached to each bond. At the date of issuance, the market
value of the bonds, without the stock warrants, was quoted at 96. The market
value of each detachable warrant was quoted at \$40. What amount, if any, of the
proceeds from the issuance should be accounted for as part of Taub s
stockholders’ equity?

On
May 1, 2007, Logan Co. issued \$300,000 of 7% bonds at 103, which are due on
April 30, 2017. Twenty detachable stock warrants entitling the holder to
purchase for \$40 one share of Logan s common stock, \$15 par value, were
attached to each \$1,000 bond. The bonds without the warrants would sell at 96.
On May 1, 2007, the fair value of Logan s common stock was \$35 per share and of
the warrants was \$2. On May 1, 2007, Logan should record the bonds with a

The
data below were taken from the accounting records of Fosel Inc. for 2006:Net
income – \$150,000;Income tax expense – 55,000;Interest expense –
35,000;Preferred stock dividends – 30,000;Common stock dividends –
45,000;Beginning shares of common stock- 54,000 shares;Shares of common stock
issued February 28- 12,000 shares;Shares of treasury stock purchased July 1-
6,000 shares.Assuming that Fosel Inc. had split its stock 2 for 1 on June 1,
compute the weighted-average number of shares outstanding at December 31, 2006.

On
January 2, 2007, Ramos Co. issued at par \$10,000 of 6% bonds convertible in
total into 1,000 shares of Ramos’s common stock. No bonds were converted during
2007. Throughout 2007, Ramos had 1,000 shares of common stock outstanding.
Ramos’s 2007 net income was \$3,000, and its income tax rate is 30%. No
potentially dilutive securities other than the convertible bonds were
outstanding during 2007. Ramos’s diluted earnings per share for 2007 would be
(rounded to the nearest penny)

Ross
Co. purchased \$300,000 of bonds for \$315,000. If Ross intends to hold the
securities to maturity, the entry to record the investment includes

A
company invests in the common stock of XYZ Inc. with the intent to sell the
stock within a couple of months. The company should classify the investment as

17-Which
of the following is not a held-to-maturity security?

a-Investment
in bonds that the company intends to hold until the maturity date

b-Investment
in debt securities acquired exclusively as a fixed-income investment, which the
company intends to keep until the end of the bond term

c-Investment
in preferred stock that the company intends to hold for 20 years

d-Investment
in bonds purchased four years after issue that the company intends to hold
until the due date

18-Held-to-maturity
securities are reported at

acquisition
cost.

acquisition
cost plus amortization of a discount.

acquisition
cost plus amortization of a premium.

fair
value.

On
August 1, 2007, Bettis Company acquired \$200,000 face value 10% bonds of Hanson
Corporation at 104 plus accrued interest. The bonds were dated May 1, 2007, and
mature on April 30, 2012, with interest payable each October 31 and April 30.
The bonds will be held to maturity. What entry should Bettis make to record the
purchase of the bonds on August 1, 2007?

On
August 1, 2007, Witten Co. acquired 200, \$1,000, 9% bonds at 97 plus accrued
interest. The bonds were dated May 1, 2007, and mature on April 30, 2013, with
interest paid each October 31 and April 30. The bonds will be added to Witten s
available-for-sale portfolio. The preferred entry to record the purchase of the
bonds on August 1, 2007 is

Miley,
Inc. began work in 2007 on a contract for \$8,400,000. Other data are as
follows: For 2007: Costs incurred to date: \$3,600,000, Estimated costs to
complete: \$2,400,000, Billings to date: \$2,800,000, Collections to date:
\$2,000,000. For 2008: Costs to date: \$5,600,000, Estimated costs to complete:
\$0, Billings to date: \$8,400,000, Collections to date: \$7,200,000. If Miley
uses the completed-contract method, the gross profit to be recognized in 2008
is

Stone
Co. owns 4,000 of the 10,000 outstanding shares of Maye Corp. common stock.
During 2007, Maye earns \$120,000 and pays cash dividends of \$40,000. Stone
should report investment revenue for 2007 of

## Reviews

There are no reviews yet.

# Accounting exam questions

\$16.00

Category:

## Description

Last Exam
Exam #3

1. Explain why a company would offer terms on
their sales invoice such as 2/10, n/30. (10 Points)

2. The
HeadSet Company sells headsets (very creative name for a company). The management of the HeadSetcompany does not
like to prepare journal entries so they called you for help. .

Following is the information they
provided you

Selling price of Headset is \$45

is \$29.

May
1 Purchased 3,000 Headsets from Vendor
#1 with terms of 2/10, n/30, FOB Destination.

May
2 Freight bill for May 1 purchase was
\$350, and was paid on May 2.

May
3 Returned 250 Headsets to Vendor #1

May 10
Paid the amount owed to Vendor #1

May 12
Collaborate.

May 14
Customer Collaborate returned 75 injured

May 20
Received amount owed from Customer Collaborate

Required

A. Prepare
the journal entries for the above transactions

B. Prepare
a partial income statement (Gross sales through Gross Profit)

C. Compute
the gross profit % from your partial income statement

D. Explain

(Total Points for Problem 30)

3. The
Did Our Customers Pay on Time Company wants to prepare their aging schedule for
December 3, 2013. They started the aging
schedule but decided to call you to help them finish You are such a nice person
so you said yes. Following is the
information that was provided to you.

 Name Total Not Past Due 1-30 days Past Due 31 â€“ 60 Days Past Due 61 -90 Days Past Due 91 â€“ 120 Days Past Due Over 120 Days Past Due Sub Total \$654,000 \$320,400 \$137,340 \$78.480 \$52,320 \$45,748 \$19,620 Estimated % uncollectible 3% 7% 18% 26% 47% 72%

The following customers were not include in the above Aging
Schedule

Customer A Invoice
Due Date 11/14/2013 Invoice
amount \$2,500

Customer B Invoice
Due Date 9/09/2013 Invoice Amount \$3,700

Customer C Invoice
Due Date 01/21/2014 Invoice Amount \$4,200

The current balance in the Allowance for Doubtful
Account is \$27,450 credit.

Required:

1. Finish the aging schedule with the remaining
information.

2. Prepare the journal entry to update the
Allowance for Doubtful Accounts

3. Based on your aging schedule determine the
dollar amount that will be reported on the balance sheet for net receivables.

4. Your
boss told you that the estimated % that were used in the aging schedule for
Estimated Uncollectible Percentages should be reduced in half (each % reduced
by half). How will that change affect
the income statement and balance sheet?

(Total Points for the Problem 25)

#4. Assume that on
Jan 18, 2014, your Customer Late Pay declared bankruptcy. The customer owes the company \$5,800.

a. Prepare
the journal entry to write of the balance for Customer Late Pay

b. Explain
how the journal entry affect the income statement

(Total
Points for the Problem 10)

## Reviews

There are no reviews yet.