| ACCOUNTING 101A |
| SECTION 10915 |
| FALL SEMESTER 2013 | | | | | | 150 POINTS | | Each question is worth 6 points |
| FINAL EXAMINATION-CHAPTERS 7-13 |
| | | EACH QUESTION BELOW IS WORTH 3-20 POINTS 150 POINTS TOTAL |
| 1. | Name three internal control activities? |
| 6 PTS. | a. | ____________________________________________________________ |
| CH 7 | b. | ____________________________________________________________ |
| | c. | ____________________________________________________________ |
| 2. | A company had accounts receivable of $100,000 on 12-31-11 and $150,000 on 12-31-12. If its accounts receivable turnover was 6.0 what was the amount of |
| 6 PTS. | its credit sales for 2012? $_____________________________________________________ | | | | | | |
| CH 8 |
| 3. | What are the two "timing differences" which occur when preparing a bank reconciliation? |
| 6 PTS. | a. | ____________________________________________________________ | | | | | |
| CH 7 | b. | ____________________________________________________________ | | | | | |
| 4. | A company shows a net income for 2012 of $100,000. Included in its operating expenses is depreciation on equipment in the |
| 6 PTS. | amount of $8,000. During the year its accounts receivable balance went from $25,000 to $30,000. Its accounts payable balance went |
| CH 12 | from $15,000 to $18,000. In the other income secion of the income statement was a gain on the sale of land in the amount of $30,000. |
| | There was also a loss on the early retirement of some bonds in the amount of $10,000. |
| | Based on this what was the company's cash flow from operating activities for 2012? $______________________________________________________________________ | | | | | | | | | | | |
| | | show calculation |
| 5. | Indicate how each of the following situations would be handled when preparing a bank reconcilation? |
| 6 PTS. | a. Is added to the book balance b. is subtracted from the book balance | | | | |
| CH 7 | c. Is added to the bank statement balance d. is subtracted from the bank statement balance | | | | |
| | ______ A deposit in transit in the amount of $2,000 |
| | ______ An NSF check from a customer |
| | ______ A bank error where a $500 deposit made by another bank customer was posted to your company's account by mistake | | | | | | | | |
| | ______ A check written for $4,500 which has not yet been paid by the bank | | | | | | | | |
| | ______ A check issued and paid by the bank in the amount of $629 but entered in the cash disbursements journal as $692. | | | | | | | | |
| | ______Bank service charges of $30.00 |
| 6. | It takes a company on average 45 days to collect its accounts receivable. Based on this what would be the company's accounts receivable turnover? |
| 6 PTS. | ____________________________________________________ |
| CH 8 |
| 7. | Which depreciation method presented in Chapter 9 is not based on the "passage of time?" |
| 6 PTS. | _________________________________________________________________________________________________________________________ | | | | | | | | | |
| CH 9 | Which method of depreciation will result in the highest amount of total depreciation expense over the life of the asset? |
| | _________________________________________________________________________________________________________________________ |
| 8. | When are bonds issued at a premium? _______________________________________________________________________________________ | | | | | | | | | | |
| 6 PTS. | When are bonds issued at a discount? _____________________________________________________________________ | | | | | | | | | | |
| CH 10 | When are bonds issued at their face value? ___________________________________________________________________ | | | | | | | | | | |
| 9. | Name two types of payroll taxes which employers' must pay and treat as expenses? |
| 6 PTS. | a. | _________________________________________________________________________________________________________________________ | | | | | | | | | |
| CH 10 | b. | _________________________________________________________________________________________________________________________ | | | | | | | | | |
| 10. | Indicate what each of the following financial analyis ratios/calculations measures? |
| 20 PTS. | a. | Debt to Total Assets Ratio ___________________________________________________ | | | | | | |
| CH 13 | b. | Net Sales divided by Total Assets ____________________________________________________ | | | | | | |
| | c. | Return On Assets __________________________________________________________ | | | | | | |
| | d. | Current Ratio _______________________________________________________ | | | | | | |
| | e. | Profit Margin x _______________________________________=Return On Assets | | | | | | |
| | f. | Price Earnings Ratio equals _______________________________ divided by EPS | | | | | | |
| | g. | Return On Common Stockholder's Equity Measures _______________________________________________ | | | | | | |
| | h. | Cash provided by Operating activities minus Capital Expenditures minus Dividends paid = ________________________________________ | | | | | | | | | |
| | i. | Times Interest Earned Measures ________________________________________ | | | | | | |
| | j. | Cash Dividends divided by Net Income equals ______________________________________ | | | | | | |
| | | | | | | | | |
| 11. | On 1-1-12 a company issued $500,000 of bonds at a price of 97. The bonds pay interest semiannually on 1-1 and 7-1 and will mature on 12-31-2022. |
| 6 PTS. | What will be the carrying value of these bonds on 1-1-2017? $_____________________________________________________________ | | | | | | | | |
| CH 10 | On 4-1-13 a company issued $600,000 of bonds at a price of 102. The bonds pay interest semiannually on 4-1 and 10-1 and will mature on 3-31-2033. |
| | What will be the carrying value of these bonds on 4-1-2023? $_______________________________________________________ | | | | | | | | |
| 12. | A company sold $250,000 of merchandise to customers on account in 2012. It began the year with $20,000 in accounts receivable and it ended the |
| 6 PTS. | year with $32,000 in accounts receivable. How much cash was collected from customers during the year? $______________________________________________ | | | | | | | | | | |
| CH 12 | To calculate the amount paid out to merchandise suppliers, it would start with Cost Of Goods Sold +/- ________________________________________________ |
| | and +/- ________________________________________________________________ |
| 13. | A company purchased a delivery truck for $40,000 which it will take depreciate using the double declining balance method. The truck |
| 6 PTS. | was placed in service on 7-1-12 and has a $5,000 salvage value and 5 year useful life. |
| CH 9 | a. | How much depreciation will be taken on the truck in 2012? $____________________________________________ | | | | | | | | |
| | b. | What will be the book value of the truck on 12-31-13? $________________________________________ | | | | | | | | |
| 14. | What account and amount is missing from the following journal entry related to the sale of equipment? |
| 4 PTS. | Debit | Cash for $60,000 |
| CH 9 | Debit | Accumulated Depr; Equipment for $20,000 |
| | Credit | ________________________________________________ for $____________________________ | | | | | |
| | Credit | Equipment for $70.000 | | | | | |
| | What account and amount is missing from the following journal entry related to the sale of machinery? |
| | Debit | Cash for $40,000 |
| | Debit | Accumulated Depr; Machinery for $15,000 |
| | Debit | ________________________________________ for $____________________________________ |
| | Credit Machinery for $60,000 |
| 15. | Over how many years is a company allowed to amortize research and development costs? __________________________________________________________________ |
| 4 PTS. | Over how many years is a company allowed to amortize a patent? ________________________________________________ | | | | | | | | | |
| CH 9 |
| 16. | A company retired some of its bonds and realized a loss from the redemption of $6,000. They were called in for $515,000. Based on this what was the |
| 3 PTS. | carrying value of the bonds at the time of redemption? $___________________________________________ |
| CH 10 |
| | A company retired some of its bonds and realized a gain from the redemption of $4,000. They were called in for $392,000. Based on this what was the |
| | carrying value of the bonds at the time of redemption? $___________________________________________ |
| 17. | A company issued 5,000 shares of its $2 par value common stock for $25 per share on 9-1-13. The entry to record this transaction is |
| 6 PTS. | Debit to ___________________________________________________ for $________________________________________ |
| CH 11 | Credit to __________________________________________________ for $________________________________________ |
| | Credit to __________________________________________________ for $________________________________________ |
| 18. | A company's current ratio is 1.75 to 1 and its current liabilities are $50,000 |
| 4 PTS. | What is this company's current assets $______________________________________ What is its working capital? $_______________________________________________ |
| CH 10,13 | | | | | | | | | |
| 19. | On 4-1-11 I purchased 1,000 shares of a company's stock at $25 per share. On 11-1-13 when the stock was valued at $60, there was a 3 for 1 stock split. |
| 4 PTS. | How many shares would I now own of the stock and how much will each be worth? _____________________________________ shares worth | | | | | | | | | |
| | $____________________________ per share, |
| 20. | I purchased $50,000 of a corporation's bonds which will pay me 5% interest annually for 10 years. What would be the present value of these |
| 5 PTS. | interest payments I am to receive? (Use Appendix D of the textbook to solve this) ______________________________________________________________________ |
| |
| 21. | What are two of the advantages of financing a corporation by selling bonds rather than issuing stock? |
| 6 PTS. | a. | _________________________________________________________________________________________________________________________ | | | | | | | | | |
| CH 10 | b. | _________________________________________________________________________________________________________________________ | | | | | | | | | |
| 22. | A company has outstanding 4,000 shares of 8% cumulative preferred stock outstanding with a $100 par value. It has paid no dividends in 2010 or |
| 4 PTS. | 2011. In 2012 the company's board of directors voted to pay dividends to all shareholders based on the company's higher net income? How much of the |
| CH 11 | dividends declared must be paid out to the preferred shareholders? $__________________________________________________________ | | | | | | | | | | |
| | How much of the dividends would be paid out to the common stockholders of this company? $_____________________________________________ |
| | Total Paid Out=$100,000 |
| 23. | Accounting Terminology Questions: | | | | | | | | | | | | |
| 7 PTS. | a. | Account which is used to balance out a petty cash fund when the pay outs do not balance out to the cash on hand? | | | | | | | | | | | |
| CH 7-13 | b. | The excess of the purchase price of a company over the total of its net assets (Hint, where I sometimes shop for clothes). | | | | | | | | | | | |
| | c. | This method of depreciating long lived assets is one that differs from that used in financial reporting but is acceptable by the I.R.S. | | | | | | | | | _____________________ | | |
| | d. | The total amount of a company's accounts receivable minus the allowance for doubtful accounts. | | | | | | | | | | | |
| | e. | Corporate stock which is repurchased by a corporation. | | | | | | | | | | | |
| | f. | Used to calculate the percentage change in a base year amount to that of a current year. | | | | | | | | | | | |
| | g. | A document which pledges title to specific assets as security for a loan | | | | | | | | | | | |
| | | | |
| 24. | The purpose of the following journal entry |
| 6 PTS. | Debit to Allowance for Doubtful Accounts for $XXXXXX |
| CH 8 | Credit to Accounts Receivable for $XXXXXX | | | | | | | | | | | |
| | _______________________________________________________________________________________________________________________ |
| | Using the ______________________________________________________________________________ method the same entry would be made |
| | with a debit to Bad Debt Expense and a credit to Accounts Receivable |
| 25. | A company took out a $50,000 loan with its bank on 1-1-13 which requires them to pay 5 installments of $10,000 plus accrued interest at the annual rate of |
| 5 PTS. | 8% at the end of each year beginning on 1-1-14. On its 2013 year end (12-31-13) balance sheet how much of this loan will be shown as a |
| | current liability? $______________________________________________________ |
| | At 12-31-15 how much of this loan will be shown as a long term liability? $________________________________________________ |
| | The adjusting entry required on 12-31-13 to record the accrued interest on the loan would be |
| | Debit to __________________________________________________________ for $__________________________________________ |
| | Credit to __________________________________________________________ for the same amount. |
| TOTAL 150 POINTS |
aliqat
accounting_101a_final_examination_fall_2013-a.xlsx
