Question 1 of 30 Total payroll of SVU Company was $1,840,000, of which $320,000 represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $1,440,000. Income taxes withheld were $450,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employee's salaries and wages to $106,800 and 1.45% in excess of $106,800. When SVU Company makes its journal entry to record the salaries and wages paid, it should credit the Cash account for: None of these answers are correct $1,840,000 $1,269,080 $1,840,000 $1,390,000 Question 2 of 30 Jerry borrowed $350,000 on October 1, 2014 and is required to pay $360,000 on March 1, 2015. What amount is the note payable recorded at on October 1, 2014 and how much interest is recognized from October 1 to December 31, 2014? $350,000 and $0 $350,000 and $6,000 None of these answers are correct. $350,000 and $10,000 $360,000 and $0 Question 3 of 30 A company includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.50 each. The company's experience indicates that 60 percent of the coupons will be redeemed. During 2014, 100,000 bags of dog food were sold, 12,000 toys were purchased, and 40,000 coupons were redeemed. During 2015, 120,000 bags of dog food were sold, 16,000 toys were purchased, and 60,000 coupons were redeemed. For the year ending 2015, the company should report Premium Liability on its balance sheet of: $7,500 None of these answers are correct $17,000 $12,000 $17,500 Question 4 of 30 A company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $1.80; in addition it costs $1.20 to mail each mug. The results of the premium plan for the years 2014 and 2015 are as follows (assume all purchases and sales are for cash): 2014: Coffee mugs purchased = 720,000 Candy bars sold = 5,600,000 Wrappers redeemed = 2,800,000 2014 wrappers expected to be redeemed in 2015 = 2,000,000

2015:

Coffee mugs purchased = 800,000 Candy bars sold = 6,750,000 Wrappers redeemed = 4,200,000 2015 wrappers expected to be redeemed in 2016 = 2,700,000

The company should report an Inventory of Premiums amount of _________ on its balance sheet at the end of 2015. None of these answers are correct $336,000 $1,270,000 $1,476,000 $490,000 Question 5 of 30 A company includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.50 each. The company's experience indicates that 60 percent of the coupons will be redeemed. During 2014, 100,000 bags of dog food were sold, 12,000 toys were purchased, and 40,000 coupons were redeemed. During 2015, 120,000 bags of dog food were sold, 16,000 toys were purchased, and 60,000 coupons were redeemed. For the year ending 2014, the company should report Premium Liability on its balance sheet of: None of these answers are correct $7,500 $17,500 $12,000 $17,000 Question 6 of 30 On January 1, 2015, a company issued eight-year bonds with a face value of $4,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. The issue price of the bond is $3,534,240 $3,558,240 $3,998,400 $3,539,280 None of these answers are correct

Question 7 of 30 Total stockholders' equity represents a claim to specific assets contributed by the owners. a claim against a portion of the total assets of a company. the maximum amount that can be borrowed by a company. only the amount of earnings that have been retained in the business. none of these answers are correct Question 8 of 30 A company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $1.80; in addition it costs $1.20 to mail each mug. The results of the premium plan for the years 2014 and 2015 are as follows (assume all purchases and sales are for cash): 2014: Coffee mugs purchased = 720,000 Candy bars sold = 5,600,000 Wrappers redeemed = 2,800,000 2014 wrappers expected to be redeemed in 2015 = 2,000,000

2015:

Coffee mugs purchased = 800,000 Candy bars sold = 6,750,000 Wrappers redeemed = 4,200,000 2015 wrappers expected to be redeemed in 2016 = 2,700,000

The company should report a Premium Liability amount of _________ on its balance sheet at the end of 2015. $392,000 $300,000 $356,000 $240,000 None of these answers are correct Question 9 of 30 A company records stamp service revenue and records a reserve for the expected cost of redemptions in the year stamps are sold to licensees. Based on the company's prior experiences, it expects only 75% of the stamps sold to licensees will be redeemed. The company's Liability for Stamp Redemptions account had a balance of $5,000,000 at December 31, 2013. The following activity related to the stamp service transactions occurred in 2014:

Stamp Service Revenue from stamps sold to licensees $4,000,000 Stamp Service Redemptions costs 3,320,000

The company assumes that the stamps sold in 2014 will be presented for redemption in 2015. Given this information, what amount should the company report as in its Liability for Stamp Redemptions account at December 31, 2014? $8,320,000 $3,930,000 $4,680,000 $5,680,000 None of these answers are correct Question 11 of 30 When the effective-interest method is used to amortize bond premium or discount, the periodic amortization will increase only if the bonds were issued at a discount. increase if the bonds were issued at either a discount or a premium. decrease only if the bonds were issued at a premium. increase only if the bonds were issued at a premium. None of these answers are correct

Question 14 of 30 A company includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.50 each. The company's experience indicates that 60 percent of the coupons will be redeemed. During 2014, 100,000 bags of dog food were sold, 12,000 toys were purchased, and 40,000 coupons were redeemed. During 2015, 120,000 bags of dog food were sold, 16,000 toys were purchased, and 60,000 coupons were redeemed. For the year ending 2015, the company should report Premium Expense on its income statement of: $25,000 $27,500 $22,000 $37,000 None of these answers are correct Question 15 of 30 A company issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and December 31. The proceeds from the bonds are $9,802,072. What is interest expense for 2015, using straight-line amortization? $1,026,805 None of these are correct $780,000 $784,596 $789,896 Question 16 of 30 Which of the following represents the total number of shares that a corporation may issue under the terms of its charter? none of these answers are correct Issued shares Unissued shares Authorized shares Outstanding shares Question 17 of 30 Jackson Company issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2012. Interest is paid on June 30 and December 31. The proceeds from the bonds are $9,802,072. Using effective-interest amortization, how much interest expense will be recognized in 2012? $780,000 $784,249 $390,000 None of these answers are correct $784,166 Question 18 of 30 On January 1, a company issued $4,000,000, 9% bonds for $3,756,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. The company uses the effective-interest method of amortizing bond discount. At the end of the first year, the company should report unamortized bond discount of $228,400 None of these answers are correct $204,000 $219,600 $206,440

Question 19 of 30 A company issued bonds with a maturity amount of $200,000 and a maturity ten years from date of issue. If the bonds were issued at a premium, this indicates that

None of these answers are correct

the effective yield or market rate of interest exceeded the stated (nominal) rate.

the nominal rate of interest exceeded the market rate.

no necessary relationship exists between the two rates.

the market and nominal rates coincided. Question 20 of 30 A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,144. Using effective-interest amortization, how much interest expense will be recognized in 2014?

$1,568,332

$1,568,498

$780,000

$1,560,000

None of these are correct Question 21 of 30 SVU Corporation has $2,500,000 of short-term debt it expects to retire with proceeds from the sale of 85,000 shares of common stock. If the stock is sold for $20 per share subsequent to the balance sheet date, but before the balance sheet is issued, what amount of short-term debt could be excluded from current liabilities?

$2,500,000

$800,000

None of these answers are correct.

$1,700,000

$0 Question 22 of 30 Under the effective-interest method of bond discount or premium amortization, the periodic interest expense is equal to

the stated (nominal) rate of interest multiplied by the face value of the bonds.

the market rate of interest multiplied by the face value of the bonds.

the market rate multiplied by the beginning-of-period carrying amount of the bonds.

the stated rate multiplied by the beginning-of-period carrying amount of the bonds.

None of these answers are correct Question 23 of 30 The residual interest in a corporation belongs to the

common stockholders

preferred stockholders

creditors

management

none of these answers are correct Question 24 of 30 SVU Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. SVU's lawyer states that it is probable that SVU will lose the suit and be found liable for a judgment costing SVU anywhere from $1,600,000 to $8,000,000. However, the lawyer states that the most probable cost is $4,800,000. As a result of the above facts, SVU should accrue

no loss contingency but disclose a contingency of $1,600,000 to $8,000,000.

None of these answers are correct.

a loss contingency of $4,800,000 and disclose an additional contingency of up to $3,200,000.

a loss contingency of $4,800,000 but not disclose any additional contingency.

a loss contingency of $1,600,000 and disclose an additional contingency of up to $6,400,000.

Question 25 of 30 A company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $1.80; in addition it costs $1.20 to mail each mug. The results of the premium plan for the years 2014 and 2015 are as follows (assume all purchases and sales are for cash): 2014: Coffee mugs purchased = 720,000 Candy bars sold = 5,600,000 Wrappers redeemed = 2,800,000 2014 wrappers expected to be redeemed in 2015 = 2,000,000

2015:

Coffee mugs purchased = 800,000 Candy bars sold = 6,750,000 Wrappers redeemed = 4,200,000 2015 wrappers expected to be redeemed in 2016 = 2,700,000

The company should report a Premium Expense amount of _________ on its income statement for the year ending 2014.

$490,000

$492,000

$500,000

None of these answers are correct

$480,000 Question 26 of 30 Stockholders' equity is generally classified into two major categories:

earned capital and contributed capital.

none of these answers are correct

retained earnings and unappropriated capital.

contributed capital and appropriated capital.

appropriated capital and retained earnings. Question 27 of 30 Common stockholders of a business enterprise are said to be the residual owners. The term residual owner means that shareholders

are entitled to a dividend every year in which the business earns a profit.

can negotiate individual contracts on behalf of the enterprise.

none of these answers are correct

bear the ultimate risks and uncertainties and receive the benefits of enterprise ownership.

have the rights to specific assets of the business. Question 28 of 30 A company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $1.80; in addition it costs $1.20 to mail each mug. The results of the premium plan for the years 2014 and 2015 are as follows (assume all purchases and sales are for cash): 2014: Coffee mugs purchased = 720,000 Candy bars sold = 5,600,000 Wrappers redeemed = 2,800,000 2014 wrappers expected to be redeemed in 2015 = 2,000,000

2015:

Coffee mugs purchased = 800,000 Candy bars sold = 6,750,000 Wrappers redeemed = 4,200,000 2015 wrappers expected to be redeemed in 2016 = 2,700,000

The company should report a Premium Expense amount of _________ on its income statement for the year ending 2015.

None of these answers are correct

$490,000

$500,000

$492,000

$480,000 Question 29 of 30 A company markets household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash received from the contracts are credited to Unearned Service Contract Revenues. At December 31, 2013, the balance in the Unearned Service Contract Revenues account was $720,000. This balance was before any year-end adjustments were made. As service contract costs are incurred they are charged to the Service Contract Expense account. The Service Contract Expense account had a balance of $180,000 at December 31, 2013. The currently outstanding service contracts at December 31, 2013 expire as follows:

$150,000 during 2014 $240,000 during 2015 $105,000 during 2016

What should the adjusted balance in the Unearned Service Contract Revenues be on the December 31, 2013 balance sheet?

$540,000

None of these answers are correct

$360,000

$330,000

$495,000 Question 30 of 30 A company issues $4,000,000 face value of bonds at 96 on January 1, 2013. The bonds are dated January 1, 2013, pay interest semiannually at 8% on June 30 and December 31, and mature in 10 years. Straight-line amortization is used for discounts and premiums. On September 1, 2016, $2,400,000 of the bonds are called at 102 plus accrued interest. What gain or loss would be recognized on the called bonds on September 1, 2016?

$181,000 loss

$108,800 gain

$240,000 loss

None of these answers are correct

$144,000 gain