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I need answers to these questions. 

Also, I must show my work.

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Name______________________

 

ACC121

 

Comprehensive Final

 

Multiple choice

 

5 points each

 


 

325 points

 


 

1. Which financial statement would you utilize to determine whether a company will be able to pay

 

liabilities which are due in 30 days?

 

A. Income statement

 

B. Balance sheet

 

C. Statement of retained earnings

 

D. Statement of cash flows

 

2. Which of the following is an objective of the external audit of a company's financial statements?

 

A. To provide a forecast of the company's future earnings.

 

B. To assure no fraud has been committed by the company's management.

 

C. To provide credibility and assurance that the financial statement information conforms with generally

 

accepted accounting principles in all material respects.

 

D. To detect all accounting errors made by the accounting system and employees.

 

3. Huron has provided the following year-end balances:

 

Cash, $25,000

 

Patents, $7,900

 

Accounts receivable, $9,300

 

Property, plant, and equipment, $98,700

 

Prepaid insurance, $3,600

 

Accumulated depreciation, $10,000

 

Inventory, $37,000

 

Trademarks, $12,600

 

How much are Huron's current assets?

 

A. $85,900.

 

B. $71,300.

 

C. $74,900.

 

D. $102,100.

 

4. Which group requires CPAs to follow a professional code of ethics and standards?

 

A. American Institute of Certified Public Accountants

 

B. Internal Revenue Service

 

C. Securities & Exchange Commission

 

D. Local taxing agency

 


 

5. Match each career with the related definition by entering the appropriate letter in the space

 

provided.

 

8 points

 

Careers

 


 

Definitions

 


 

_ ___(1) financial analyst

 


 

a. Chief executive officer who has primary responsibility for the

 

financial information presented in the financial statements.

 


 

_____(2) Independent auditor

 


 

b. Advisor who analyzes financial and other economic

 

information to form forecasts and stock recommendations.

 


 

_____(3) CEO

 


 

c. CPA who examines financial statements and attests to their

 

fairness.

 


 

_____(4) Tax practitioner

 


 

d. Individual who provides tax planning and tax services.

 


 

6. Phipps Company borrowed $25,000 cash on October 1, 2010, and signed a six-month, 8% interestbearing note payable with interest payable at maturity. Assuming that no adjusting entries have been

 

made during the year, what is the amount of accrued interest payable to be reported on the December

 

31, 2010 balance sheet?

 

Must show work 6 points

 

___________________________

 


 

7. On January 1, 2011 Miller Corporation had retained earnings of $18,000. During 2010, Miller reported

 

net income of $25,000, declared and paid dividends of $20,000, and issued stock for $10,000. What

 

were Miller's retained earnings on December 31, 2011?

 

Must show work 6 points

 

_____________________________

 


 

8. A corporation has $80,000 in total assets, $36,000 in total liabilities, and a $10,000 credit balance in

 

retained earnings. What is the balance in the contributed capital account? Must show work 6 points

 

_____________________________

 


 

9. During 2010, Sigma Company earned service revenues amounting to $900,000, of which $700,000 was

 

collected in cash; the balance will be collected in January 2011. What amount should the 2010 income

 

statement report for service revenues?

 

6 points

 

____________________________

 


 

10. A company receives a $55,000 cash deposit from a customer on December 15 but will not deliver the

 

goods until January 20. What month will revenue be recorded?

 

6 points

 

_____________________________

 


 

11. On January 1, 2011, the general ledger of Global Corporation included supplies inventory of $2,000.

 

During 2011, supplies purchases amounted to $6,000. A physical count of inventory on hand at

 

December 31, 2011 determined that the supplies inventory was $1,300. How much is the 2011 supplies

 

expense?

 

Must show work 6 points

 

____________________________

 


 

12. A company reported the following information for its most recent year of operation: purchases,

 

$300,000; beginning inventory, $20,000; and cost of goods sold, $10,000. How much was the company's

 

ending inventory?

 

Must show work 6 points

 

___________________________

 


 

13. Lauer Corporation uses the periodic inventory system and has provided the following information

 

about one of their laptop computers:

 

Date

 

1/1

 

5/5

 

8/10

 

10/15

 


 

Transaction

 

Beginning inventory

 

Purchase

 

Purchase

 

Purchase

 


 

Number of Units

 

100

 

200

 

300

 

200

 


 

During the year, 150 laptop computers were sold.

 


 

Cost per Unit

 

$800

 

$900

 

$1,000

 

$1,050

 

Must show work 6 points

 


 

What was cost of goods sold using the FIFO cost flow assumption? _________________

 


 

14. Lauer Corporation uses the periodic inventory system and has provided the following information

 

about one of their laptop computers:

 

Date

 

1/1

 

5/5

 

8/10

 

10/15

 


 

Transaction

 

Beginning inventory

 

Purchase

 

Purchase

 

Purchase

 


 

Number of Units

 

100

 

200

 

300

 

200

 


 

During the year, 150 laptop computers were sold.

 


 

Cost per Unit

 

$800

 

$900

 

$1,000

 

$1,050

 

Must show work 6 points

 


 

What was cost of goods sold using the LIFO cost flow assumption? _________________

 


 

15. On January 1, 2010, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid

 

$2,000 for transportation and installation. The expected useful life of the machine is 9 years and the

 

residual value is $6,000. How much is the annual depreciation expense assuming use of the straight-line

 

depreciation method?

 

Must show work 6 points

 

__________________________

 


 

16. A company purchased an oil well for $50,000. It is estimated that 100,000 barrels can be extracted

 

from the well. What is the depletion expense assuming 30,000 barrels are extracted and sold?

 

Must show work 6 points

 

____________________________________

 


 

17. The following data were provided by the detailed payroll records of Mountain Corporation for the

 

month of March 2011:

 

3 points each entry, 21 points total

 

Wages

 

Income Taxes Withheld

 

Union dues

 


 

$35,000

 

7,350

 

175

 


 

FICA taxes at a 7.65% rate (no employee has reached the maximum)

 

Requirements:

 

a) Prepare the journal entry to record the payroll and the related employee deductions.

 

b) Prepare the journal entry to record the employers FICA payroll tax expense.

 


 

18. For each of the transactions listed below, indicate whether it is an operating (O), investing (I) or

 

financing (F) activity on the statement of cash flows. Also, indicate if the transaction increases (+) or

 

decreases (-) cash.

 

1 point each, 12 points total

 


 

Transaction

 

A)

 


 

Sold stock for cash

 


 

B)

 


 

Collected cash from customers

 

on account

 


 

C)

 


 

Purchased equipment

 


 

D)

 


 

Paid operating expenses

 


 

E)

 


 

Repaid the bank loan

 


 

F)

 


 

Paid dividends to stockholders

 


 

Type of Activity

 


 

Effect on Cash

 


 

19. Record the following transactions indicating the account affected and whether the account

 

increased (+) or decreased (-)

 

3 points each, 42 points total

 


 

Transaction

 


 

Assets

 


 

Liabilities

 


 

Stockholders?

 

Equity

 


 

A)

 

B)

 

C)

 

D)

 

E)

 

F)

 

G)

 

H)

 

I)

 

J)

 

K)

 

L)

 

M)

 

N)

 

O)

 


 

20 .

 


 

Paid accounts payable of $15,000

 


 

-15,000

 


 

-15,000

 


 

Purchased $1,000 of supplies on

 

account

 

Borrowed $20,000 cash from the

 

bank

 

Purchased equipment for $18,000

 

and paid cash

 

Sold stock and received $50,000

 

cash

 

Earned $90,000 of revenue on

 

account

 

Collected $70,000 accounts

 

receivable

 

Paid dividends of $13,000

 

Paid operating expenses of $12,000

 

Depreciation expense for the year,

 

$23,000

 

Accrued year end wages of $4,000

 

Received cash for services

 

provided, $75,000

 

Paid $12,000 for a 2 year insurance

 

policy

 

Insurance expired for the year

 

$6,000

 

Accrued interest expense on note,

 

$1,000

 


 

Letter

 

A

 

B

 

C

 

D

 


 

Account Title

 

Cash

 

Accounts receivable

 

Supplies

 

Prepaid Insurance

 


 

Letter

 

G

 

H

 

I

 

J

 


 

Account Title

 

Notes payable

 

Contributed capital

 

Retained earning

 

Revenue

 


 

E

 

F

 


 

Equipment

 

Accounts payable

 


 

K

 


 

Operating expenses

 


 

During 2010, the company completed the transactions given below. Indicate the appropriate journal

 

entry for each transaction by giving the account letter and amount. 2 point each, 44 points total

 


 

1)

 

2)

 

3)

 

4)

 

5)

 

6)

 

7)

 

8)

 

9)

 

10)

 

11)

 


 

Transaction

 

Paid $500 in operating

 

expenses

 

Paid $12,000 for a two year

 

insurance policy

 

Purchased equipment for

 

$40,000. Paid $10,000 cash

 

and signed a $30,000 note

 

Issued capital stock and

 

received $8,000 cash

 

Received cash for services

 

provided $7,500

 

Received $2,100 on accounts

 

receivable

 

Insurance expired for the year,

 

$23,000

 

Accrued year end expenses of

 

$4,000

 

Paid accounts payable of

 

$1,2,00

 

Earned $9,000 of revenue on

 

account

 

Paid dividends to stockholders,

 

$3,000

 


 

Letter

 


 

Debit

 


 

Letter

 


 

Credit

 


 

21. National Shops, Inc. reported the following amounts on its balance sheet as of December 31, 2010:

 

Inventory

 

Notes payable

 

Cash

 

Contributed capital

 

Equipment

 

Accumulated depreciation

 

Accounts receivable

 

Accounts payable

 

Retained earnings

 


 

$325,000

 

100,000

 

150,000

 

250,000

 

700,000

 

600,000

 

30,000

 

45,000

 

210,000

 


 

Requirements:

 


 

5 points each, 15 points total

 


 

1. What is the amount of National's total assets?

 


 

_______________

 


 

2. What is the amount of National?s total liabilities?

 


 

_______________

 


 

3. What is the amount of National?s stockholders? equity

 


 

_______________

 


 

22. For each of the accounts listed below, indicate whether the normal balance is a

 

debit (DR) or credit (CR)

 

1 points each, 12 points

 


 

______ Inventory

 


 

______ Prepaid insurance

 


 

______ Notes payable

 


 

______Accounts payable

 


 

______ Retained earnings

 


 

______Cost of Goods Sold

 


 

______ Equipment

 


 

______Cash

 


 

______ Accounts receivable

 


 

______ Wage Expense

 


 

______Revenue

 


 

______Contributed capital

 


 

23. Indicate whether the following items would be added (+) or subtracted (-) from the company?s books

 

or the bank statement during the preparation of a bank reconciliation.

 

20 points

 


 

Reconciling item

 

Outstanding checks

 


 

Company?s Books

 


 

Bank Statement

 


 

Bank service charge

 

Interest earned on the account

 

Deposits in transit

 

A check written for $59 but was incorrectly

 

recorded in the check register for $95

 


 

24. The following data were taken from the records of Lilo Corporation for the year ended December 31,

 

2010:

 

Sales

 

Sales returns and allowances

 

Selling and administrative expenses

 

Cost of goods sold

 


 

900,000

 

10,000

 

170,000

 

510,000

 


 

The income tax rate is 35%.

 

Based on the above data, prepare a multiple-step income statement using good form. Include gross

 

profit and pretax income. Use the form below.

 

21 points

 


 

________________________________________________

 

________________________________________________

 

________________________________________________

 


 

25. For each of the accounts listed below, indicate whether they would be classified as an

 

ASSET (A) , LIABILITY (L), STOCKHOLDERS EQUITY (SE), REVENUE (R), EXPENSE (E)

 

1 point each, 12 points total

 


 

______ Inventory

 


 

______ Prepaid insurance

 


 

______ Notes payable

 


 

______Accounts payable

 


 

______ Retained earnings

 


 

______Cost of Goods Sold

 


 

______ Equipment

 


 

______Cash

 


 

______ Accounts receivable

 


 

______ Wage Expense

 


 

______Revenue

 


 

______Contributed capital

 


 

26. For each of the accounts listed below, indicate which financial statement they would be included on

 

Balance Sheet (BS) or Income Statement (IS)

 

1 point each, 12 points total

 


 

______ Inventory

 


 

______ Prepaid insurance

 


 

______ Notes payable

 


 

______Accounts payable

 


 

______ Retained earnings

 


 

______Cost of Goods Sold

 


 

______ Equipment

 


 

______Cash

 


 

______ Accounts receivable

 


 

______ Wage Expense

 


 

______Revenue

 


 

______Contributed capital

 


 

27. Compute the missing amounts for each independent case.

 


 

Total

 

Revenues

 

A)

 


 

Total

 

Expenses

 


 

231,820

 


 

B)

 


 

Net Income

 

(Loss)

 


 

C)

 


 

Total

 

Assets

 


 

196,700

 

175,780

 


 

36,590

 


 

12 points

 


 

Total

 

Liabilities

 


 

294,300

 

29,920

 


 

Beginning

 

Inventory

 


 

Purchases

 


 

A)

 


 

650

 


 

100

 


 

700

 


 

B)

 


 

1,000

 


 

900

 


 

Total

 

Available

 


 

348,400

 

189,675

 


 

28. Compute the missing amounts for each independent case.

 

Sales

 

Revenue

 


 

75,000

 


 

590,000

 


 

9,840

 


 

97,525

 


 

8 Points

 

Ending

 

Inventory

 


 

Cost of

 

Goods

 

Sold

 


 

500

 

1,100

 


 

Stockholders?

 

Equity

 


 

Gross

 

Profit

 

350

 


 

500

 


 

500

 


 

 







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