Fall 2016 acct 311 final
exam
Spring 2016 Comprehensive Final Examination
1. Callable bonds
a. can be redeemed by the issuer at some time at a pre-specified price.
b. can be converted to stock.
c. mature in a series of payments.
d. None of these is correct.
b. face value of the bond plus related premium or minus related discount.
c. face value of the bond plus related discount or minus related premium.
d. maturity value of the bond plus related discount or minus related premium.
b. The right to maintain one's proportional interest in the corporation
c. The right to receive a full cash dividend before dividends are paid to other classes of stock
d. The right to vote on major corporate issues
b. Federal unemployment taxes
c. FICA taxes
d. Federal income taxes
b. Federal unemployment taxes
c. State unemployment taxes
d. All of these
b. The lessee records the lease obligation related to the leased asset.
c. The lessor transfers title of the leased property to the lessee for the duration of the lease term.
d. The lessor records depreciation and lease revenue.
b. 90 percent of the property's fair market value.
c. 75 percent of the property's fair market value.
d. 50 percent of the property's fair market value.
b. 90 percent of the estimated economic life of the property.
c. 75 percent of the estimated economic life of the property.
d. 50 percent of the estimated economic life of the property.
10. On December 1,
2011, Blue Inc. signed an operating lease for a warehouse for ten years at $24,000
per year. Upon execution of the lease, Blue paid $48,000 covering rent for the
first two years. How much should be shown in Blue's income statement for the
year ended December 31, 2011, as rent expense?
a. $0 b. $2,000 c. $24,000 d. $48,000
b. allocated between a reduction of the liability for leased assets and interest expense.
c. recorded as a reduction in the liability for leased assets.
d. recorded as a rental expense.
b. The amount of dividends declared on cumulative preferred shares
c. The amount of cash dividends declared on common shares
d. The number of common shares resulting from the assumed conversion of debentures outstanding
b. indicate earnings shareholders will receive in future periods.
c. distinguish between companies with a complex capital structure and companies with a simple capital structure.
d. show the maximum possible dilution of earnings.
b. added back to net income for diluted earnings per share.
c. deducted from net income for diluted earnings per share.
d. none of these.
b. Weighted-average number of common shares outstanding
c. Weighted-average number of common shares outstanding plus all other potentially antidilutive securities
d. Weighted-average number of common shares outstanding plus all other potentially dilutive securities
16. When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as
a. an increase in the investment account.
b. a deduction from the investment account.
c. dividend revenue.
d. a deduction from the investor's share of the investee's profits.
2008 $36,000 $10,800 30%
2009 24,000 8,400 35%
2010 48,000 16,800 35%
b. reported in the statement of cash flows only if the indirect method is used.
c. disclosed in a note or separate schedule accompanying the statement of cash flows.
d. not reported or disclosed because they have no impact on cash.
b. Purchase of a machine for cash
c. Issuance of common stock in exchange for land
d. Declaration and payment of a cash dividend on common stock
b. A use of cash in determining cash flows from investing activities
c. A source of cash in determining cash flows from financing activities
d. A negative adjustment to net income in determining cash flows from operating activities
b. As a deduction at cost from total stockholders' equity
c. As a deduction at cost from total contingent liabilities
d. As a deduction at par from total stockholders' equity
b. contingent liability.
c. estimated liability.
d. current liability.
b. it is certain that funds are available to pay the amount of the claim.
c. it is probable that a liability has been incurred even though the amount of the loss cannot be reasonably estimated.
d. the amount of the loss can be reasonably estimated and it is probable prior to issuance of financial statements that a liability has been incurred.
b. Incremental cost for the second year only
c. Cumulative actual costs and estimated costs to complete
d. No gross profit would be recognized in year 2
25. On January 1, 2015,
Able Company leased a warehouse to Zachary under an operating lease for ten
years at $80,000 per year, payable the first day of each lease year. Able paid $36,000
to a real estate broker as a finder's fee. The warehouse is depreciated at
$20,000 per year. During 2015, Able incurred insurance and property tax expense
totaling $15,000.
b. $41,400
c. $44,000
d. $45,000
Depreciation expense .................................. $ 12,000
Issuance of common stock for cash...................... 105,000
Cash dividends paid ................................... 18,600
Increase in inventory ................................. 43,500
Decrease in accounts receivable ....................... 68,700
Decrease in accounts payable .......................... 27,600
Retirement of long-term debt for cash.................. 120,000
Net income ............................................ 150,000
Proceeds from sale of equipment ($15,000 loss) ........ 63,000
Cash purchase of equipment ............................ 84,000
Cash, beginning of year ............................... 200,000
The amount of gross
profit and revenue Adelphi should recognize on this contract in 2011 and 2012
were?
University of Maryland University College
ACCT311 Intermediate Accounting IISpring 2016 Comprehensive Final Examination
a. can be redeemed by the issuer at some time at a pre-specified price.
b. can be converted to stock.
c. mature in a series of payments.
d. None of these is correct.
2. The net amount of
a bond liability that appears on the balance sheet is the
a. call price of the
bond plus bond discount or minus bond premium.b. face value of the bond plus related premium or minus related discount.
c. face value of the bond plus related discount or minus related premium.
d. maturity value of the bond plus related discount or minus related premium.
3. Which of the
following shareholder rights is most commonly enhanced in an issue of preferred
stock?
a. The right to vote
for the board of directorsb. The right to maintain one's proportional interest in the corporation
c. The right to receive a full cash dividend before dividends are paid to other classes of stock
d. The right to vote on major corporate issues
4. How would the
declaration of a 10 percent stock dividend by a corporation affect each of the following
on its books?
Retained Total Stock-
Earnings holders'
Equity
a.
Decrease No effect
b.
Decrease Decrease
c. No
effect Decrease
d. No
effect No effect
5. Which of the
following taxes is not included in the payroll tax expense of the
employer?
a. State unemployment
taxesb. Federal unemployment taxes
c. FICA taxes
d. Federal income taxes
6. Which of the
following payroll taxes are paid by the employer?
a. FICA taxesb. Federal unemployment taxes
c. State unemployment taxes
d. All of these
7. Which of the
following statements characterizes an operating lease?
a. The lessee records
depreciation and interest.b. The lessee records the lease obligation related to the leased asset.
c. The lessor transfers title of the leased property to the lessee for the duration of the lease term.
d. The lessor records depreciation and lease revenue.
8. One of the four
general criteria for a capital lease is that the present value at the beginning
of the lease term of the minimum lease payments equals or exceeds
a. the property's
fair market value.b. 90 percent of the property's fair market value.
c. 75 percent of the property's fair market value.
d. 50 percent of the property's fair market value.
9. One of the four
general criteria for a capital lease specifies that the lease term be equal to
or greater than
a. the estimated
economic life of the property.b. 90 percent of the estimated economic life of the property.
c. 75 percent of the estimated economic life of the property.
d. 50 percent of the estimated economic life of the property.
a. $0 b. $2,000 c. $24,000 d. $48,000
11. In a lease that
is recorded as an operating lease by the lessee, the equal monthly rental payments
should be
a. allocated between
interest expense and depreciation expense.b. allocated between a reduction of the liability for leased assets and interest expense.
c. recorded as a reduction in the liability for leased assets.
d. recorded as a rental expense.
12. In calculating
diluted earnings per share, which of the following should not be
considered?
a. The weighted
average number of common shares outstandingb. The amount of dividends declared on cumulative preferred shares
c. The amount of cash dividends declared on common shares
d. The number of common shares resulting from the assumed conversion of debentures outstanding
13. The main purpose
of reporting diluted earnings per share is to
a. provide a
comparison figure for debt holders.b. indicate earnings shareholders will receive in future periods.
c. distinguish between companies with a complex capital structure and companies with a simple capital structure.
d. show the maximum possible dilution of earnings.
14. In determining
earnings per share, interest expense, net of applicable income taxes, on convertible
debt which is dilutive should be
a. ignored for
diluted earnings per share.b. added back to net income for diluted earnings per share.
c. deducted from net income for diluted earnings per share.
d. none of these.
15. When computing
diluted EPS for a company with a complex capital structure, what is the denominator
in the computation?
a. Number of common
shares outstanding at year-endb. Weighted-average number of common shares outstanding
c. Weighted-average number of common shares outstanding plus all other potentially antidilutive securities
d. Weighted-average number of common shares outstanding plus all other potentially dilutive securities
16. When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as
a. an increase in the investment account.
b. a deduction from the investment account.
c. dividend revenue.
d. a deduction from the investor's share of the investee's profits.
17. The Bee Corporation reported a $66,000
operating loss in 2011. In the preceding three years, Bee reported the
following income before taxes and paid the indicated income taxes:
Year Income Taxes Tax
Rate2008 $36,000 $10,800 30%
2009 24,000 8,400 35%
2010 48,000 16,800 35%
The amount of tax
refund generated in 2011 arising from the tax carryback provisions of the current
tax code would be
a. $23,100. b. $22,500. c. $21,300. d. $19,200.
18. Noncash investing
and financing activities, if material, are
a. reported in the
statement of cash flows under the "all-financial-resources concept."b. reported in the statement of cash flows only if the indirect method is used.
c. disclosed in a note or separate schedule accompanying the statement of cash flows.
d. not reported or disclosed because they have no impact on cash.
19. Which of the
following is a noncash transaction that should be disclosed in a schedule accompanying
the statement of cash flows?
a. Sale of an
investment for cashb. Purchase of a machine for cash
c. Issuance of common stock in exchange for land
d. Declaration and payment of a cash dividend on common stock
20. The amortization
of a bond premium can correctly be presented in the statement of cash flows in
which of the following ways?
a. A positive
adjustment to net income in determining cash flows from operating activitiesb. A use of cash in determining cash flows from investing activities
c. A source of cash in determining cash flows from financing activities
d. A negative adjustment to net income in determining cash flows from operating activities
21. Which of the
following is an appropriate presentation of treasury stock?
a. As a marketable
securityb. As a deduction at cost from total stockholders' equity
c. As a deduction at cost from total contingent liabilities
d. As a deduction at par from total stockholders' equity
22. Pending
litigation would generally be considered a(n)
a. nonmonetary
liability.b. contingent liability.
c. estimated liability.
d. current liability.
23. A contingent
liability should be recorded when
a. any lawsuit is
actually filed against a company.b. it is certain that funds are available to pay the amount of the claim.
c. it is probable that a liability has been incurred even though the amount of the loss cannot be reasonably estimated.
d. the amount of the loss can be reasonably estimated and it is probable prior to issuance of financial statements that a liability has been incurred.
24. If the
percentage-of-completion method is used, what is the basis for determining the
gross profit to be recognized in the second year of a three-year contract?
a. Cumulative actual
costs incurred onlyb. Incremental cost for the second year only
c. Cumulative actual costs and estimated costs to complete
d. No gross profit would be recognized in year 2
Able’s net rental
income for 2015 should be?
a. $9,000b. $41,400
c. $44,000
d. $45,000
Problems
1. The following
pertains to the Terps Co. for the year ended December 31, 2014.Depreciation expense .................................. $ 12,000
Issuance of common stock for cash...................... 105,000
Cash dividends paid ................................... 18,600
Increase in inventory ................................. 43,500
Decrease in accounts receivable ....................... 68,700
Decrease in accounts payable .......................... 27,600
Retirement of long-term debt for cash.................. 120,000
Net income ............................................ 150,000
Proceeds from sale of equipment ($15,000 loss) ........ 63,000
Cash purchase of equipment ............................ 84,000
Cash, beginning of year ............................... 200,000
Prepare a statement
of cash flows, in good form, using the indirect method.
2. Adelphi
Construction Company uses the percentage-of-completion method of accounting. In
2011, Adelphi began work on a project which had a contract price of $1,600,000
and estimated costs of $1,200,000. Additional information is as follows:
2011 2012
Costs incurred to
date..................... $240,000 $1,300,000
Estimated costs to
complete, as of 12/31/11 .....960,000
Billings during the
year .................. 290,000 1,310,000
Collections during
the year ............... 250,000 1,200,000
TUTORIAL PREVIEW
Prepare a statement
of cash flows, in good form, using the indirect method.
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Terps Co.
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Statement of Cash Flows
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For the year Ended December 31, 2014
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Cash flows from operating activities:
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Net income
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150,000
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Adjustments:
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Add Depreciation
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12,000
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Add Loss on sale of equipment
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15,000
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