1 Silver Gym had two different kinds of business under operation One kind of business was discontinued and sold at a gain How should this gain be reported A As extraordinary gain B As gain from discontinued operation C Both of the above D None of the above 2 The Robinson suffered damage from a hurricane and had a loss of $10,000 Assuming a tax rate of 10 , what is the effect the loss net of tax A $1,000 gainB $9,000 gainC $11,000 gainD $9,000 loss 3 A company had Service Revenue of $120,000, wages expense of $40,000, interest revenue of $3,000,loss on discontinued operations of $12,000,and a tax rate of 20 What is the amount of income from continuing operations (After tax) A $56,800B $60,000C $66,400D $83,000E 80,000 4 A company changed its inventory costing method from weighted average to FIFO inventory Identify the appropriate treatment for this situation A Prospective treatmentC Retrospective treatment B Discontinued operationsD Extraordinary item 5 The MacGruber Co sold equipment that it was not using for $21,000 cash In what section of the Statement of Cash Flows should the transaction be reported A Operating activities C Investing activities B Liquidity activities D Financing activities 6 The O'Malley Corp paid cash dividends to stockholders In what section of the Statement of Cash Flows should it be reported A operating activities B investing activitiesC financing activitiesD Should not be reported 7 The Sylvia Co has an investment portfolio consisting trading securities, held to maturity securities, and available for sale securities Which of those investments is (are) NOT reported at fair value A Trading securitiesB Held to maturity securitiesC Available for sale securitiesD Both A C 8 Which of the following investments in never an equity security A Held to maturity securityB Trading securitiesC Available for sale securityD Both B C 9 Which of the following assets of the Santos Co would not be classified as a current asset A goodwill B property, plant and equipment C notes receivable due in 18 months D All of the above 10 You are asked to rank five assets in the order of liquidity These assets are accounts receivable, short term investment in stocks, goodwill, machinery, and inventory Which asset is most liquid A GoodwillB inventoryC Accounts receivableD short term investment in stocks 11 The following information is available for Criminy Company Accounts Receivable, 12 31 10 $83,000 Allowance for doubtful accounts at 12 31 10 $3,000 (credit balance) As a result of a review and aging of accounts receivable , it has been estimated that 10 of the accounts receivable will never be collected There is no write off of A R Grover is getting ready to record its 12 31 10 adjusting journal entries By what amount should it debit bad debt expense A $3,000B $5,300C $8,300D $11,300 12 Which of the following is true A When an account is written off, Allowance for Doubtful Accounts is credited B When an account is written off, bad debt expense is credited C When an account is written off, Allowance for Doubtful Accounts is debited D When an account is written off, Bad debt expense is debited 13 Which of the following entry is correct for estimating bad debt expense under the allowance method A Debit bad debt expense, credit accounts receivable B Debit bad debt expense, credit allowance for doubtful accounts C Debit Allowance for doubtful accounts, credit accounts receivable D Debit accounts receivable, credit allowance for doubtful accounts 14 Tom Grouper will need $360,000 four years from today, how much must he invest today, assuming an earnings rate of 10 Choose the closest answer A $327,273B $527,076C $245,885D $693,000 15 What is the present value of a 100,000 (face value) bond issued at coupon rate 20 , due in 3 years, interest payable annually Assume the effective market interest rate is 12 100,000B 71,178C 119,215D 48,037 16 What is the present value of a 200,000 (face value) bond issued at coupon rate 10 , due in 3 years, interest payable semi annually Assume the effective market interest rate is 12 A 200,000B 140,992C 190,165D 49,173 17 The Showman Co issued a bond with the following characteristics $60,000 principal, four year duration, 10 annual coupon rate , interest paidsemi annually The effective market rate at the time of issue was 8 annually What should be the market price of this bond on the date of issue A $49,656B 50,491C $60,000D $64,040E 56,769 18 Joseph will start school on 9 1 14 He is expected to attend school for four years and will need to pay tuition of $50,000 on September 1st of each year His uncle wants to make an investment on 9 1 10 that will provide sufficient funds for four years of tuition Assuming he can earn 5 annually, how much must invest on 9 1 10 Choose the closest answer A $27,282B $37,976C $104,167D $200,000E $153,156 19 Quanto Co is evaluating a contingent liability For which case below, may the company make no disclosure A The likelihood of the liability is probable B The liability is reasonably possible C The liability is remote D Both A C 20 In preparing its bank reconciliation for the month of April 2010, Johnson, Inc has available the following information Balance per bank statement, 4 30 10$30,140 NSF check returned with April 2010 bank statement450 Deposits in transit, 4 30 104,000 Outstanding checks, 4 30 105,200 Bank service charges for April20 What should be the true cash balance at April 30, 2010 Hint you can solve this problem without knowing the balance per books A $28,470B $31,340C $28,940D $30,870

Question

1  Silver Gym had two different kinds of business under operation  One kind of business was discontinued and sold at a gain  How should this gain be reported  A As  extraordinary gain   B As  gain from discontinued operation  C Both of the above D None of the above  2 The Robinson suffered damage from a hurricane and had a loss of $10,000 Assuming a tax rate of 10 , what is the effect the loss net of tax  A $1,000 gainB  $9,000 gainC  $11,000 gainD $9,000 loss  3 A company had Service Revenue of $120,000, wages expense of $40,000, interest revenue of $3,000,loss on discontinued operations of $12,000,and a tax rate of 20   What is the amount of income from continuing operations (After tax)  A $56,800B  $60,000C  $66,400D  $83,000E  80,000 4  A company changed its inventory costing method from weighted average to FIFO inventory  Identify the appropriate treatment for this situation  A  Prospective treatmentC  Retrospective treatment B  Discontinued operationsD  Extraordinary item 5  The MacGruber Co  sold equipment that it was not using for $21,000 cash  In what section of the Statement of Cash Flows should the transaction be reported  A  Operating activities C  Investing activities B  Liquidity activities D  Financing activities 6  The O'Malley Corp  paid cash dividends to stockholders In what section of the Statement of Cash Flows should it be reported  A operating activities B  investing activitiesC  financing activitiesD  Should not be reported  7 The Sylvia Co  has an investment portfolio consisting trading securities, held to maturity securities, and available for sale securities Which of those investments is (are) NOT reported at fair value  A  Trading securitiesB  Held to maturity securitiesC  Available for sale securitiesD  Both A   C 8  Which of the following investments in never an equity security  A  Held to maturity securityB  Trading securitiesC  Available for sale securityD  Both B C 9 Which of the following assets of the Santos Co  would not be classified as a current asset  A goodwill B property, plant and equipment C notes receivable due in 18 months D All of the above 10  You are asked to rank five assets in the order of liquidity  These assets are accounts receivable, short term investment in stocks, goodwill, machinery, and inventory  Which asset is most liquid  A  GoodwillB  inventoryC  Accounts receivableD  short term investment in stocks 11  The following information is available for Criminy Company  Accounts Receivable, 12 31 10   $83,000  Allowance for doubtful accounts at 12 31 10  $3,000 (credit balance) As a result of a review and aging of accounts receivable , it has been estimated that 10  of the accounts receivable will never be collected There is no write off of A R  Grover is getting ready to record its 12 31 10 adjusting journal entries By what amount should it debit  bad debt expense   A  $3,000B $5,300C  $8,300D  $11,300 12 Which of the following is true  A When an account is written off, Allowance for Doubtful Accounts is credited  B When an account is written off, bad debt expense is credited  C When an account is written off, Allowance for Doubtful Accounts is debited  D When an account is written off, Bad debt expense is debited  13  Which of the following entry is correct for estimating bad debt expense under the allowance method  A  Debit bad debt expense, credit accounts receivable  B  Debit bad debt expense, credit allowance for doubtful accounts  C  Debit Allowance for doubtful accounts, credit accounts receivable  D  Debit accounts receivable, credit allowance for doubtful accounts  14 Tom Grouper will need $360,000 four years from today, how much must he invest today, assuming an earnings rate of 10   Choose the closest answer  A  $327,273B  $527,076C  $245,885D  $693,000 15  What is the present value of a 100,000 (face value) bond issued at coupon rate 20 , due in 3 years, interest payable annually  Assume the effective market interest rate is 12   100,000B  71,178C  119,215D  48,037 16  What is the present value of a 200,000 (face value) bond issued at coupon rate 10 , due in 3 years, interest payable semi annually  Assume the effective market interest rate is 12   A  200,000B  140,992C  190,165D  49,173 17 The Showman Co issued a bond with the following characteristics $60,000 principal, four year duration, 10  annual coupon rate , interest paidsemi annually The effective market rate at the time of issue was 8  annually What should be the market price of this bond on the date of issue  A  $49,656B  50,491C $60,000D  $64,040E 56,769 18 Joseph will start school on 9 1 14 He is expected to attend school for four years and will need to pay tuition of $50,000 on September 1st of each year His uncle wants to make an investment on 9 1 10 that will provide sufficient funds for four years of tuition Assuming he can earn 5  annually, how much must invest on 9 1 10  Choose the closest answer A $27,282B  $37,976C  $104,167D  $200,000E  $153,156 19 Quanto Co  is evaluating a contingent liability For which case below, may the company make no disclosure  A  The likelihood of the liability is  probable  B  The liability is  reasonably possible  C  The liability is remote  D  Both A   C 20 In preparing its bank reconciliation for the month of April 2010, Johnson, Inc  has available the following information  Balance per bank statement, 4 30 10$30,140 NSF check returned with April 2010 bank statement450 Deposits in transit, 4 30 104,000 Outstanding checks, 4 30 105,200 Bank service charges for April20 What should be the  true cash balance  at April 30, 2010 Hint  you can solve this problem without knowing the balance per books  A $28,470B  $31,340C  $28,940D $30,870

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1. Silver Gym had two different kinds of business under operation. One kind of business was discontinued and sold at a gain. How should this

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