Please see attached multiple choice/true false/ fill in answers. principles of accounting

1. Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except: A. A manager confirms that all inventories are ticketed only once. B. Counters confirm the validity of inventory existence, amounts, and quality. C. Prenumbered inventory tickets. D. Second counts by a different counter. E. Counters of inventory should be those who are responsible for the inventory. 2. Dividends received on an "equity method" investment are not included in income. TRUE/FALSE 3. Amortization of a premium on investments in bonds will result in an increase in interest revenue. TRUE/FALSE 4. The presence of goodwill in a balance sheet suggests that accounts of the subsidiary have not yet been consolidated with the parent company. TRUE/FALSE 5. Under which scenario will bond interest income exceed cash received for interest during each period? A. Bond are purchased at a par. B. Bond are purchased at a premium. C. None of these. D. Bond are purchased at a discount. E. All of these answers are correct (except "none of these") 6. If one business acquires another for $1,000,000, and the acquired business has assets with a fair value $800,000, and liabilities with a fair value of $100,000, how much is the goodwill? A. $200,000. B. None of these. C. $300,000. D. $0. E. $100,000. 7. Using the straight-line method, how much interest income would be recognized for the 20X5 calendar year, for a $1,000, 5-year, 6% bond that was purchased for $960 on July 1, 20X4? A. None of these. B. $68. C. $100. D. $52. E. $60. 8. Over the long run, one would expect interest income on a bond investment to be equal to: A. The difference between the cash invested and the cash returned on the investment. B. The face value of the bond. C. None of these. D. The cash payments for interest plus any premium on the original investment. E. The difference between the face value and maturity value of the bond. 9. An "equity method" investment has a beginning balance of $250,000. This investment balance represents 40% of the equity of the investee. If the investee earns $25,000 and pays dividends of $10,000 during the period, then: A. None of these. B. Earnings on the investment is reported as $0. C. Earnings on the investment is reported as $4,000. D. Earnings on the investment is reported as $6,000. 10. 11. 12. 13. 14. 15. 16. 17. E. Earnings on the investment is reported as $10,000. Seamark buys $300,000 of Eider's 8% five-year bonds payable at par value. Interest payments are made semiannually. Seamark plans to hold the bonds for the five year life. When the bonds mature, the journal entry to record the proceeds will be: A. Debit Cash $300,000; credit Interest Revenue $300,000. B. Debit Investments In Bonds $300,000; credit Cash $300,000. C. Debit Cash $300,000; credit Interest Receivable $300,000. D. Debit Cash $300,000; credit Investment in bonds $300,000. E. Debit Cash $300,000; credit Bonds Payable $300,000. Depreciation expense for the third year of an asset with a fiveyear life would be the same under the straightline and sumoftheyears'digits methods. TRUE/FALSE A new truck is purchased on January 1, 20X6. The truck cost $10,000, has a 5-year life, and a $2,000 residual value. Given a December 31 year-end, and use of the double-declining balance method, how much is 20X7 depreciation expense? A. $2,400. B. $4,000. C. None of these. D. $1,920. E. $3,200. Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,000, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of: A. $5,000 B. $10,000 C. $20,000 D. $5,500 E. $9,250 Residual value is not subtracted from cost in which of the following depreciation methods A. None of these. B. Double-declining balance. C. Straight-line. D. Sum-of-the-years'-digits. E. All of the above. Diamond Industries acquired a new machine at a cost of $62,000. Service life was estimated to be eight years and total units of output to be 200,000. Estimated residual value was $8,000. Compute depreciation for the second year in the life of the machine using the double-declining balance method. Aspelin Company negotiated the purchase of a new piece of equipment. The list price on this equipment was $200,000. After hours of negotiation, Aspelin was able to acquire the equipment at $170,000. Furthermore, Aspelin was entitled to a 1% discount if it paid for the equipment within 10 days. After completing the purchase, a third party offered Aspelin, $185,000 for the piece of equipment. At what amount should Aspelin record the equipment (assume the discount is taken)? The straight-line depreciation method and the double-declining-balance depreciation method: A. Produce the same depreciation expense each year. B. Are acceptable for tax purposes only. 18. 19. 20. 21. C. Produce the same total depreciation over an asset's useful life. D. Produce the same book value each year. E. Are the only acceptable methods of depreciation for financial reporting. Depletion is to an intangible as depreciation is to a plant asset. TRUE/FALSE A new, larger dump bed was added to one of a company's dump trucks. The new dump bed will allow the truck to carry twice as much as before, but it is not expected to increase the truck's service life. The proper entry to reflect this transaction includes a: A. None of these. B. Credit to Accumulated Depreciation. C. debit to Truck. D. a credit to Depreciation Expense. E. a debit to Maintenance Expense. In an exchange transaction, the term boot means: A. A pair of shoes you wear to a rodeo B. Additional monetary consideration was given or received. C. The transaction has been completed. D. The transaction was at a gain. E. The transaction was at a loss. On January 1, 20X1, Blake Company purchased a patent for $68,000. The patent has a remaining legal life of nine years and an expected service life of eight years. The amortization expense (to the nearest dollar) properly recognized for 20X1 is: A. $8,500. B. $3,400. C. None of these. D. $7,556. E. $0. 22. 23. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500. What should be the allocation of this property's costs in the company's accounting records? A. Land $75,000; Land Improvements, $30,800; Building, $46,200. B. Land $82,750; Land Improvements, $33,100; Building, $49,650. C. Land $75,000; Land Improvements, $30,000; Building, $45,000. D. Land $80,250; Land Improvements, $32,100; Building, $48,150. E. Land $77,500; Land Improvements, $31,000; Building, $46,500. 24. An advance or prepayment received from a customer is an accrued liability which should be reported on the balance sheet. TRUE/FALSE 25. The account Discount on Notes Payable: A. is an asset account because it has a debit balance. B. is a contingent liability account. C. is a contra liability account. D. is amortized to reduce interest expense over the life of a note. E. None of these. 26. Sylvan Company had sales of $1,500,000. Estimated warranty costs are 1% of sales. Work performed under warranties during the period actually cost $8,750. The entry to record the warranty liability includes: A. a debit to Warranty Expense for $8,750. B. None of these. C. a debit to Warranty Expense for $23,750. D. a debit to Warranty Expense for $15,000. E. a debit to Warranty Expense for $6,250. 27. Bledso Tool Company sells an automobile jack for $35. The jack has a 30-day warranty. Bledso estimates that 6% of the jacks will require repair during the 30day warranty period. The repair costs average $4.35 per jack. During August, sales were $70,000. Of the Jacks sold in August, 47 have been repaired under the warranty agreement. What should be the balance in the Estimated Liability for Warranties account at the end of August? 28. Stuart Hawkin earned a gross salary of $121,500 from Menasco Corporation during the current year. Social Security tax is assumed to be 6% of the first $100,000 in wages per year. Medicare/Medicaid is assumed to be 1.5% of gross pay. Federal unemployment tax is 0.5% of an employee's first $10,000 of gross wages and state unemployment tax is 3.0% of an employee s first $10,000 of gross wages. Federal income tax of $16,000 was withheld from Hawkin's paycheck during the current year. Menasco also paid $1,500 for a health insurance policy for Hawkin. What is Menasco's total yearly cost of having Hawkin on the payroll? 29. The employer should record deductions from employee pay as: A. Current liabilities. B. Employee receivables. C. Wages payable. D. Payroll taxes. E. Employee payables