Accouting exam will be due friday August 7th 2016 during the day at 7pm EST

Question 1 (2.5 points) 1 Mendez Company provides the following information about its product: Targeted operating income $50,000 Selling price per unit 6.00 Variable cost per unit 1.50 Total fixed costs 125,000 What is the contribution margin ratio? Question 1 options: A) 75% B) 100% C) 125% D) 25% Save Question 2 (2.5 points) 2 The utility bill for a law firm consists of both fixed and variable costs. Refer to the 4-month data below and apply the high-low method to answer the question. Minutes Total Bill January 460 $3,000 February 200 $2,675 March 160 $2,625 April 300 $2,800 If the company uses 380 minutes in May, how much will the total bill be? Question 2 options: A) $2,425 B) $2,478 C) $2,900 D) $3767 Save Question 3 (2.5 points) 3 Vatsala Company provides the following financial information: Income from operations $200,000 Interest expense 45,000 Gains/(losses) on sale of equipment (2,500) Net income 152,500 Total assets at Jan 1 2,600,000 Total assets at Dec 31 3,200,000 Calculate return on investment based on the information given above. Question 3 options: A) 6.3% B) 5.3% C) 6.9% D) 7.2% Save Question 4 (2.5 points) 4 Venkat Inc. manufactures and sells pens for $5 each. Wolf Corp. has offered Venkat Inc. $3 per pen for a one-time order of 3,500 pens. The total manufacturing cost per pen, using traditional costing, is $1 per unit, and consists of variable costs of $0.85 per pen and fixed overhead costs of $0.15 per watch. Assume that Venkat Inc. has excess capacity and that the special order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? Question 4 options: A) increase of $7,000 B) decrease of $7,000 C) increase of $7,525 D) decrease of $7,525 Save Question 5 (2.5 points) 5 Jackson Company had a finished goods inventory of 55,000 units on January 1. It's projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Jackson Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales. What should the budgeted production be for January? Question 5 options: A) 236,000 B) 181,000 C) 200,000 D) 219,000 Save Question 6 (2.5 points) 6 Nebraska Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $240,000, $300,000, and $420,000, respectively, for September, October, and November. The company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections in September from accounts receivable are: Question 6 options: A) $240,000 B) $134,400 C) $192,000 D) $168,000 Save Question 7 (2.5 points) 7 Florida Company began its operations on March 31 of the current year. Projected manufacturing costs for the first three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Depreciation, insurance, and property taxes represent $28,800 of the estimated monthly manufacturing costs. Insurance was paid on March 31, and property taxes will be paid in November. Three-fourths of the remainder of the manufacturing costs are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month. The cash payments for manufacturing in the month of June are: Question 7 options: A) $14,600 B) $188,800 C) $217,600 D) $183,200 Save Question 8 (2.5 points) 8 The following data relate to direct materials costs for November: Actual costs 4,600 pounds at $5.50 Standard costs 4,500 pounds at $6.00 What is the direct materials price variance? Question 8 options: A) $2,250 favorable B) $2,250 unfavorable C) $2,300 favorable D) $1,700 unfavorable Save Question 9 (2.5 points) 9 The following data relate to direct materials costs for November: Actual costs 4,600 pounds at $5.50 Standard costs 4,500 pounds at $6.00 What is the direct materials quantity variance? Question 9 options: A) $550 unfavorable B) $600 favorable C) $550 favorable D) $600 unfavorable Save Question 10 (2.5 points) 10 The following data relate to direct labor costs for February: Actual costs 7,700 hours at $13 Standard costs 7,000 hours at $9 What is the direct labor time variance? Question 10 options: A) $9,100 favorable B) $9,100 unfavorable C) $6,300 unfavorable D) $6,300 favorable Save Question 11 (2.5 points) 11 The following data relate to direct labor costs for February: Actual costs 7,700 hours at $13 Standard costs 7,000 hours at $9 What is the direct labor rate variance? Question 11 options: A) $28,000 favorable B) $28,000 unfavorable C) $30,800 favorable D) $30,800 unfavorable Save Question 12 (2.5 points) 12 Balance sheet and income statement data indicate the following: Bonds payable, 10% (issued 1988 due 2012) $1,000,000 Preferred 5% stock, $100 par (no change during year) 300,000 Common stock, $50 par (no change during year) 2,000,000 Income before income tax for year 350,000 Income tax for year 80,000 Common dividends paid 50,000 Preferred dividends paid 15,000 Based on the data presented above, what is the number of times bond interest charges were earned ? Question 12 options: A) 3.7 B) 4.4 C) 4.5 D) 3.5 Save Question 13 (2.5 points) 13 Kim Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year 2014 Agriculture Division Industrial Division Sales revenue $140,000 $1,040,000 Operating income $46,400 $220,000 Average total assets $300,000 $5,540,000 Target rate of return 14.0% 14.0% Calculate the residual income for the Agriculture division. Question 13 options: A) $5,500 B) $4,400 C) $2,500 D) $1,800 Save Question 14 (2.5 points) 14 New York Inc. Inc. has a division that manufactures a component that sells for $150 and has a variable cost of $45. Another division of the company wants to purchase the component. Fixed cost per unit of component is $25. What is the minimum transfer price if the division is operating at capacity? Question 14 options: A) $150 B) $45 C) $55 D) $140 Save Question 15 (2.5 points) 15 Da Silva Company has variable costs of $0.60 per unit of product. In August, the volume of production was 24,000 units and units sold were 20,000. The total production costs incurred were $31,900. What are the fixed costs per month? Question 15 options: A) $17,500 B) $19,900 C) $9,600 D) $14,400 Save Question 16 (2.5 points) 16 Based on the following data, what is the quick ratio, rounded to one decimal point? Accounts payable $ 30,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 20,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 Question 16 options: A) 2.4 B) 3.4 C) 2.1 D) 1.5 Save Question 17 (2.5 points) 17 The Rand Corporation began the current year with a retained earnings balance of $25,000. During the year, the company corrected an error made in the prior year, which was a failure to record depreciation expense of $3,000 on equipment. Also, during the current year, the company earned net income of $12,000 and declared cash dividends of $5,000. Compute the year end retained earnings balance. Question 17 options: A) $29,000 B) $35,000 C) $39,000 D) $45,000 Save Question 18 (2.5 points) 18 A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 2% stock dividend on a date when the market price was $11 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend? Question 18 options: A) $3,200 B) $6,400 C) $4,800 D) $8,800 Save Question 19 (2.5 points) 19 Phan Company owns 28% of the common stock of San Company and accounts for the investment using the equity method. Assuming that Phan Company purchased the stock several years ago, the balance in the investment account would be equal to the cost of the Question 19 options: A) investment B) investment plus Phan's share of San's net income earned since the investment was purchased C) investment plus the total amount of dividends Phan has received from San since the investment was purchased investment plus Phan's share of San's net income earned since the investment was purchased D) minus the total amount of dividends Phan has received from San since the investment was purchased Save Question 20 (2.5 points) 20 Which of the following would appear as an extraordinary item on the income statement? Question 20 options: A) loss resulting from the sale of fixed assets B) gain resulting from the disposal of a segment of the business C) loss from land condemned for public use D) liquidating dividend Save Question 21 (2.5 points) 21 A loss on disposal of a segment would be reported in the income statement as a(n) Question 21 options: A) administrative expense B) other expense C) deduction from income from continuing operations D) selling expense Save Question 22 (2.5 points) 22 The Krebhel Company issued $100,000 of 12% bonds on May 1, 2006 at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, 2006, and mature on January 1, 2010. The total interest expense related to these bonds for the year ended December 31, 2006 is Question 22 options: A) $2,000 B) $4,000 C) $8,000 D) 12,000 Save Question 23 (2.5 points) 23 When the market rate of interest was 12%, Patel Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was Question 23 options: A) $ 321,970 B) $1,000,000 C) $ 943,494 D) $621,524 Save Question 24 (2.5 points) 24 When the market rate of interest was 11%, Shah Corporation issued $100,000, 8%, 10-year bonds that pay interest semiannually. Using the straight-line method, the amount of discount or premium to be amortized each interest period would be Question 24 options: A) $4,000 B) $896 C) $17,926 D) $1,793 Save Question 25 (2.5 points) 25 A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale? Question 25 options: A) $0 B) $5,000 C) $2,500 D) $10,000 Save Question 26 (2.5 points) 26 The cost of merchandise sold during the year was $50,000. Merchandise inventories were $12,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $6,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total Question 26 options: A) $49,000 B) $47,000 C) $51,000 D) $53,000 Save Question 27 (2.5 points) 27 Equipment with an original cost of $50,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would Question 27 options: A) increase by $23,000 B) decrease by $7,000 C) increase by $43,000 D) decrease by $30,000 Save Question 28 (2.5 points) 28 Littleton Co. can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $35 per pound and would require an additional cost of $8.75 per pound to produce. What is the differential revenue of producing Product D? Question 28 options: A) $7 per pound B) $8.75 per pound C) $14 per pound D) $5.25 per pound Save Question 29 (2.5 points) 29 At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true? Question 29 options: A) Total assets will be understated at the end of the current year. B) The balance sheet and income statement will be misstated but the statement of owner's equity will be correct for the current year. C) Net income will be overstated for the current year. D) Total liabilities and total assets will be understated. Save Question 30 (2.5 points) 30 Which of the statements below indicates that a company earned a net income for the period? Question 30 options: A) The sum of the debits exceeds the sum of the credits in the Balance Sheet columns on the work sheet. B) The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet. C) The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet. D) Cash inflows exceeded cash outflows. Save Question 31 (2.5 points) 31 The total on the "schedule of accounts payable" for Dundalk Dance Company at January 31 should equal Question 31 options: A) the sum of the accounts payable and notes payable controlling accounts totals at January 31 B) the total of the purchases journal on January 31 C) the amount reported in the post-closing trial balance at January 31 for Accounts Payable D) the balance in Accounts Receivable at January 31 Save Question 32 (2.5 points) 32 A sales invoice from Norman Geological Services included the following information: merchandise price, $4,000; transportation, $300; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the Norman Geological Services, and that the invoice is paid within the discount period, what is the amount of cash received by Norman Geological Services ? Question 32 options: A) $3,366 B) $3,400 C) $3,666 D) $3,950 Save Question 33 (2.5 points) 33 Bombay Exporters sold Maryland ImportersY merchandise on account FOB shipping point, 2/10, net 30, for $10,000. Bombay Exporters prepaid the $200 shipping charge. Which of the following entries does Bombay Exporters make to record this sale? Question 33 options: A) Accounts Receivable- Maryland Importers, debit $10,000; Sales, credit $10,000 B) Accounts Receivable- Maryland Importers, debit $10,000; Sales, credit $10,000, and Accounts Receivable- Maryland Importers, debit $200; Cash, credit $200 C) Accounts Receivable- Maryland Importers , debit $10,400; Sales, credit $10,400 D) Accounts Receivable- Maryland Importers, debit $10,000; Sales, credit $10,000, and Transportation Out, debit $200; Cash, credit $200 Save Question 34 (2.5 points) 34 A check drawn by a depositor in payment of a voucher for $725 was recorded in the journal as $257. What entry is required in the depositor's accounts? Question 34 options: A) debit Accounts Payable; credit Cash B) debit Cash; credit Accounts Receivable C) debit Cash; credit Accounts Payable D) debit Accounts Receivable; credit Cash Save Question 35 (2.5 points) 35 Which of the following items that appeared on the bank reconciliation of Shamina Event Planners did not require an adjusting entry? Question 35 options: A) bank service charges B) deposits in transit C) deposits in transit D) A check for $520, recorded in the check register for $250. Save Question 36 (2.5 points) 36 A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $2,000, would have a cost basis of Question 36 options: A) $92,000 B) $91,000 C) $87,000 D) $86,000 Save Question 37 (2.5 points) 37 Select the most appropriate example of a capital expenditure below? Question 37 options: A) cleaning the carpet in the front room B) tune-up for a company truck C) replacing an engine in a company car D) replacing all burned-out light bulbs in the factory Save Question 38 (2.5 points) 38 Machinery was purchased on January 1, 2005 for $51,000 by Venkat Manufacturing Group. The machinery has an estimated life of 5 years and an estimated salvage value of $6,000. Sum-of-the-years'digits depreciation for 2006 would be Question 38 options: A) $13,600 B) $12,000 C) $15,000 D) $9,000 Save Question 39 (2.5 points) 39 On the basis of the following data, what is the estimated cost of the merchandise inventory on October 31 by the retail method employed by Lazarus Fine Silks ? Oct. 1 Merchandise Inventory Oct. 1-31 Purchases (net) Oct. 1-31 Sales (net) Question 39 options: A) $372,000 B) $140,000 C) $100,000 D) $ 70,000 Save Cost Retail $225,000 $324,500 335,000 475,500 700,000 Question 40 (2.5 points) 40 Maryland Bakers overstates its Merchandise inventory at the end of the year . Which of the following statements correctly states the effect of the error? Question 40 options: A) owner's equity is overstated B) cost of merchandise sold is overstated C) gross profit is understated D) net income is understated