ACCT311 Final Exam -- Intermediate Accounting II

Fall 2016 acct 311 final exam  

ACCT311 Intermediate Accounting II
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.

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.
 

a. The right to vote for the board of directors
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

a. State unemployment taxes
b. Federal unemployment taxes
c. FICA taxes
d. Federal income taxes

a. FICA taxes
b. Federal unemployment taxes
c. State unemployment taxes
d. All of these

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.

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.

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.

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

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.

a. The weighted average number of common shares outstanding
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

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.

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.

a. Number of common shares outstanding at year-end
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.

Year                 Income                        Taxes               Tax Rate
2008                $36,000                       $10,800                       30% 
2009                24,000              8,400            35% 
2010                48,000            16,800                        35%

a. $23,100.      b. $22,500.      c. $21,300.      d. $19,200.
 

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.

a. Sale of an investment for 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
 

a. A positive adjustment to net income in determining cash flows from operating activities
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

a. As a marketable security
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

a. nonmonetary liability.
b. contingent liability.
c. estimated liability.
d. current liability.

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.
 

a. Cumulative actual costs incurred only
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.

a.  $9,000
b.  $41,400
c.  $44,000
d.  $45,000

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:

The amount of gross profit and revenue Adelphi should recognize on this contract in 2011 and 2012 were?