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10/3/2015

TheAceStudent:UMUCACC311/ACC311Quiz12015

UMUCACC311/ACC311Quiz12015
UMUCACC311/ACC311Quiz12015
1.Whichofthefollowingisgenerallyassociatedwithpayablesclassifiedasaccountspayable?
PeriodicPaymentSecured
ofInterestbyCollateral
a.NoNo
b.NoYes
c.YesNo
d.YesYes
2.OnJanuary1,2013,HersheyCo.leasedabuildingtoMars,Corp.foratenyeartermatan
annualrentalof$80,000.Atinceptionofthelease,Hersheyreceived$320,000coveringthefirsttwo
yearsrentof$160,000andasecuritydepositof$160,000.ThisdepositwillnotbereturnedtoMars
uponexpirationoftheleasebutwillbeappliedtopaymentofrentforthelasttwoyearsofthelease.
Whatportionofthe$320,000shouldbeshownasacurrentandlongtermliability,respectively,in
HersheysDecember31,2013balancesheet?
CurrentLiabilityLongtermLiability
a.$0$320,000
b.$80,000$160,000
c.$160,000$160,000
d.$160,000$80,000
3.OnSeptember1,2012,TavaniCo.issuedanotepayabletoNationalBankintheamountof
$1,200,000,bearinginterestat12%,andpayableinthreeequalannualprincipalpaymentsof
$400,000.Onthisdate,thebanksprimeratewas11%.Thefirstpaymentforinterestandprincipal
wasmadeonSeptember1,2013.AtDecember31,2012,Tavanishouldrecordaccruedinterest
payableof
a.$48,000.
b.$44,000.
c.$32,000.
d.$29,334.
4.FocusCompanyssalariedemployeesarepaidbiweekly.Occasionally,advancesmadeto
employeesarepaidbackbypayrolldeductions.Informationrelatingtosalariesforthecalendaryear
2013isasfollows:
12/31/1212/31/13
Employeeadvances$12,000$18,000
Accruedsalariespayable$65,000?
Salariesexpenseduringtheyear$650,000
Salariespaidduringtheyear(gross)$625,000
AtDecember31,2013,whatamountshouldFocusreportforaccruedsalariespayable?
a.$90,000.
b.$84,000.
c.$72,000.
d.$25,000.
5.SmithCo.sellsmajorhouseholdapplianceservicecontractsforcash.Theservicecontractsare
foraoneyear,twoyear,orthreeyearperiod.Cashreceiptsfromcontractsarecreditedtounearned
servicecontractrevenues.Thisaccounthadabalanceof$480,000atDecember31,2013before
yearendadjustment.Servicecontractcostsarechargedasincurredtotheservicecontract
expenseaccount,whichhadabalanceof$120,000atDecember31,2013.Outstandingservice
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TheAceStudent:UMUCACC311/ACC311Quiz12015

contractsatDecember31,2013expireasfollows:
During2014During2015During2016
$100,000$160,000$70,000
WhatamountshouldbereportedasunearnedservicecontractrevenuesinSmithsDecember31,
2013balancesheet?
a.$360,000.
b.$330,000.
c.$240,000.
d.$220,000.
6.DukeTradingStampCo.recordsstampservicerevenueandprovidesforthecostofredemptions
intheyearstampsaresoldtolicensees.Dukespastexperienceindicatesthatonly80%ofthe
stampssoldtolicenseeswillberedeemed.Dukesliabilityforstampredemptionswas$7,500,000
atDecember31,2011.Additionalinformationfor2012isasfollows:
Stampservicerevenuefromstampssoldtolicensees$5,000,000
Costofredemptions$3,400,000
Ifallthestampssoldin2012werepresentedforredemptionin2013,theredemptioncostwouldbe
$2,500,000.WhatamountshouldDukereportasaliabilityforstampredemptionsatDecember31,
2012?
a.$9,100,000.
b.$6,600,000.
c.$6,100,000.
d.$4,100,000.
Usethefollowinginformationforquestions7through9:
OnJanuary1,2012,HuttonCo.issuedeightyearbondswithafacevalueof$1,000,000anda
statedinterestrateof6%,payablesemiannuallyonJune30andDecember31.Thebondswere
soldtoyield8%.Tablevaluesare:
Presentvalueof1for8periodsat6%.627
Presentvalueof1for8periodsat8%.540
Presentvalueof1for16periodsat3%.623
Presentvalueof1for16periodsat4%.534
Presentvalueofannuityfor8periodsat6%6.210
Presentvalueofannuityfor8periodsat8%5.747
Presentvalueofannuityfor16periodsat3%12.561
Presentvalueofannuityfor16periodsat4%11.652
7.Thepresentvalueoftheprincipalis
a.$534,000.
b.$540,000.
c.$623,000.
d.$627,000.
8.Thepresentvalueoftheinterestis
a.$344,820.
b.$349,560.
c.$372,600.
d.$376,830.
9.Theissuepriceofthebondsis
a.$883,560.
b.$884,820.
c.$889,560.
d.$999,600.
10.Thetermusedforbondsthatareunsecuredastoprincipalis
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a.junkbonds.
b.debenturebonds.
c.indebenturebonds.
d.callablebonds.
11.ShelbyInc.issuedbondswithamaturityamountof$200,000andamaturitytenyearsfrom
dateofissue.Ifthebondswereissuedatapremium,thisindicatesthat
a.theeffectiveyieldormarketrateofinterestexceededthestated(nominal)rate.
b.thenominalrateofinterestexceededthemarketrate.
c.themarketandnominalratescoincided.
d.nonecessaryrelationshipexistsbetweenthetworates.
12.Therateofinterestactuallyearnedbybondholdersiscalledthe
a.statedrate.
b.yieldrate.
c.effectiverate.
d.effective,yield,ormarketrate.
13.Theresidualinterestinacorporationbelongstothe
a.management.
b.creditors.
c.commonstockholders.
d.preferredstockholders.
14.Inacorporateformofbusinessorganization,legalcapitalisbestdefinedas
a.theamountofcapitalthestateofincorporationallowsthecompanytoaccumulateoverits
existence.
b.theparvalueofallcapitalstockissued.
c.theamountofcapitalthefederalgovernmentallowsacorporationtogenerate.
d.thetotalcapitalraisedbyacorporationwithinthelimitssetbytheSecuritiesandExchange
Commission.
15.Thecumulativefeatureofpreferredstock
a.limitstheamountofcumulativedividendstotheparvalueofthepreferredstock.
b.requiresthatdividendsnotpaidinanyyearmustbemadeupinalateryearbeforedividendsare
distributedtocommonshareholders.
c.meansthattheshareholdercanaccumulatepreferredstockuntilitisequaltotheparvalueof
commonstockatwhichtimeitcanbeconvertedintocommonstock.
d.enablesapreferredstockholdertoaccumulatedividendsuntiltheyequaltheparvalueofthe
stockandreceivethestockinplaceofthecashdividends.
PresentedbelowisinformationrelatedtoLewisCorporation,question1617:
CommonStock,$1par$4,300,000
PaidinCapitalinExcessofParCommonStock550,000
Preferred81/2%Stock,$50par2,000,000
PaidinCapitalinExcessofParPreferredStock400,000
RetainedEarnings1,500,000
TreasuryCommonStock(atcost)150,000
16.ThetotalstockholdersequityofLewisCorporationis
a.$8,600,000.
b.$8,750,000.
c.$7,100,000.
d.$7,250,000.
17.Thetotalpaidincapital(cashcollected)relatedtothecommonstockis
a.$4,300,000.
b.$4,850,000.
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c.$5,250,000.
d.$4,700,000.
18.ThomasCompanyhasoutstandingbothcommonstockandnonparticipating,noncumulative
preferredstock.Theliquidationvalueofthepreferredisequaltoitsparvalue.Thebookvalueper
shareofthecommonstockisunaffectedby
a.thedeclarationofastockdividendonpreferredpayableinpreferredstockwhenthemarketprice
ofthepreferredisequaltoitsparvalue.
b.thedeclarationofastockdividendoncommonstockpayableincommonstockwhenthemarket
priceofthecommonisequaltoitsparvalue.
c.thepaymentofapreviouslydeclaredcashdividendonthecommonstock.
d.a2for1splitofthecommonstock.
19.AssumecommonstockistheonlyclassofstockoutstandingintheOchsCorporation.Total
stockholdersequitydividedbythenumberofcommonstocksharesoutstandingiscalled
a.bookvaluepershare.
b.parvaluepershare.
c.statedvaluepershare.
d.marketvaluepershare.
20.Incomputationsofweightedaverageofsharesoutstanding,whenastockdividendorstocksplit
occurs,theadditionalsharesare
a.weightedbythenumberofdaysoutstanding.
b.weightedbythenumberofmonthsoutstanding.
c.consideredoutstandingatthebeginningoftheyear.
d.consideredoutstandingatthebeginningoftheearliestyearreported.
21.Whateffectwilltheacquisitionoftreasurystockhaveonstockholdersequityandearningsper
share,respectively?
a.Decreaseandnoeffect
b.Increaseandnoeffect
c.Decreaseandincrease
d.Increaseanddecrease
22.Duetotheimportanceofearningspershareinformation,itisrequiredtobereportedbyall
PublicCompaniesNonpublicCompanies
a.YesYes
b.YesNo
c.NoNo
d.NoYes
23.Aconvertiblebondissueshouldbeincludedinthedilutedearningspersharecomputationasif
thebondshadbeenconvertedintocommonstock,iftheeffectofitsinclusionis
DilutiveAntidilutive
a.YesYes
b.YesNo
c.NoYes
d.NoNo
24.Stockholdersofabusinessenterprisearesaidtobetheresidualowners.Thetermresidual
ownermeansthatshareholders
a.areentitledtoadividendeveryyearinwhichthebusinessearnsaprofit.
b.havetherightstospecificassetsofthebusiness.
c.beartheultimaterisksanduncertaintiesandreceivethebenefitsofenterpriseownership.
d.cannegotiateindividualcontractsonbehalfoftheenterprise.
25.BobichCorp.had600,000sharesofcommonstockoutstandingonJanuary1,issued900,000
sharesonJuly1,andhadincomeapplicabletocommonstockof$1,050,000fortheyearending
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December31,2012.Earningspershareofcommonstockfor2012wouldbe
a.$1.75.
b.$.83.
c.$1.00.
d.$1.17.
UMUCACC311/ACC311Quiz12015

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