ACCOUNTING ASSIGNMENT

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FINAL EXAM

ACCOUNTING 101A
SECTION #14019
FALL SEMESTER 2014
FINAL EXAMINATION-CHAPTERS 7-13
		EACH QUESTION BELOW IS WORTH 10POINTS WITH 250 POINTS TOTAL SHOW HOW YOU COMPUTED YOUR ANSWER ON ALL NUMERICAL QUESTIONS
1.	Name three internal control procedures over cash?
	a.	____________________________________________________________	4
CH 7	b.	____________________________________________________________	4
	c.	____________________________________________________________	4
2.	A company had accounts receivable of $138,000 on 12-31-11 and $152,000 on 12-31-12. If its accounts receivable turnover was 7.5 what was the amount of
6 PTS.	its credit sales for 2012? $_____________________________________________________		5
CH 8	What does the accounts receivable turnover measure? __________________________________________________________________________________________		5
3.	What are the two "timing differences" which occur when preparing a bank reconciliation?
6 PTS.	a.	____________________________________________________________	5
CH 7	b.	____________________________________________________________	5
4.
CH 13	Describe a business event that would be considered irregular in nature? ____________________________________________________________________________________________		2
	A company had a 16% increase in sales from 2012 to 2013. If the sales for 2013 are $825,000, what was the dollar increase from the prior year? $_________________________________		2
	Current Assets are 35% of the total assets of a company. The stockholder's equity is $440,000. $150,0000 of its liabilities are long term liabilites which is 25% its total debt.
	What is the amount of this company's noncurrent assets? $____________________________________________________________________________		2
	____________________________________________________________ is dividing components of a company's income statement as a percentage of its total sales.		2
5.	Indicate how each of the following situations would be handled when preparing a bank reconcilation?
	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		1
	______ An NSF check from a customer		1
	______ A bank error where a $500 deposit made by another bank customer was posted to your company's account by mistake		1
	______ A check written for $4,500 which has not yet been paid by the bank		1
	______Bank service charges of $30.00		1
6.	It takes a company on average 47 days to collect its accounts receivable. Based on this what would be the company's accounts receivable turnover?		5
	____________________________________________________
CH 8	If the turnover rate was 2.5 times higher, how many days would it take the company to collect its receivables? _____________________________________________________		5
7.	Which depreciation method presented in Chapter 9 is not based on the "passage of time?"
	_________________________________________________________________________________________________________________________		5
CH 9	Which method of depreciation will result in the highest amount of total depreciation expense over the life of the asset?
	_________________________________________________________________________________________________________________________		5
8.	When are bonds issued at a premium? _______________________________________________________________________________________		3
	When are bonds issued at a discount? _____________________________________________________________________		3
CH 10	When are bonds issued at their face value? ___________________________________________________________________		3
9.	Name two types of payroll taxes which employers' must pay and treat as expenses?
	a.	_________________________________________________________________________________________________________________________	5
CH 10	b.	_________________________________________________________________________________________________________________________	5
10.	Indicate what each of the following financial analyis ratios measures or complete the formula for the measurement below
	a.	Debt to Total Assets Ratio is a measurement of ___________________________________________________	1
CH 13	b.	Net Sales divided by Total Assets is the calculation of____________________________________________________	1
	c.	Return On Assets measures__________________________________________________________	1
	d.	The Current Ratio measures_____________________________________________________	1
	e.	Profit Margin x _______________________________________=Return On Assets	1
	f.	Price Earnings Ratio equals _______________________________ divided by EPS	1
	g.	Return On Common Stockholder's Equity measures _______________________________________________	1
	h.	Cash provided by Operating activities minus Capital Expenditures minus Dividends paid = ________________________________________	1
	i.	Times Interest Earned Measures ________________________________________	1
	j.	Cash Dividends divided by Net Income equals ______________________________________	1
11.	On 1-1-12 a company issued $750,000 of bonds at a price of 96. The bonds pay interest semiannually on 1-1 and 7-1 and will mature on 12-31-2022.
	What will be the carrying value of these bonds on 1-1-2017? $_____________________________________________________________		5
CH 10	On 4-1-13 a company issued $650,000 of bonds at a price of 103. The bonds pay interest semiannually on 4-1 and 10-1 and will mature on 3-31-2013.
	What will be the carrying value of these bonds on 4-1-2023? $_______________________________________________________		5
12.
CH 13	Dividend Payout Ratio=12% Return On Assets=30% What is the net income $_______________________________________		5
	Total Assets 1/1/13=$730,000
	Total Assets-12/31/13=$470,000 What is the amount of cash dividends paid out? $_______________________________________		5
13.	A company purchased a delivery truck for $45,000 which it will depreciate using the double declining balance method. The truck
	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? $____________________________________________	5
	b.	What will be the book value of the truck on 12-31-13? $________________________________________	5
14.	What account and amount is missing from the following journal entry related to the sale of equipment?
	Debit	Cash for $62,000
CH 9	Debit	Accumulated Depr; Equipment for $20,000
	Credit	________________________________________________ for $____________________________	10
	Credit	Equipment for $75,000
	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 $____________________________________	10
	Credit Machinery for $67,500
15.	Over how many years is a company allowed to amortize research and development costs? __________________________________________________________________		5
	Over how many years is a company allowed to amortize goodwill? ________________________________________________		5
CH 9
16.	A company retired some of its bonds and realized a loss from the redemption of $7,500. They were called in for $485,000. Based on this what was the
	carrying value of the bonds at the time of redemption? $___________________________________________		5
CH 10
	A company retired some of its bonds and realized a gain from the redemption of $9,200. They were called in for $351,000. Based on this what was the
	carrying value of the bonds at the time of redemption? $___________________________________________		5
17.	A company issued 7,000 shares of its $5 par value common stock for $30 per share on 9-1-13. The entry to record this transaction is
	Debit to ___________________________________________________ for $________________________________________		3
CH 11	Credit to __________________________________________________ for $________________________________________		3
	Credit to __________________________________________________ for $________________________________________		3
18.	A company's current ratio is 1.70 to 1 and its current liabilities are $85,000
	What is this company's current assets $______________________________________ What is its working capital? $_______________________________________________		10
CH 10,13
19.	On 4-1-11 I purchased 3,000 shares of a company's stock at $28 per share. On 11-1-13 when the stock was valued at $60, there was a 3 for 1 stock split.		10
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 $60,000 of a corporation's bonds which will pay me 7% interest annually for 10 years. What would be the present value of these
	interest payments I am to receive? (Use Appendix D of the textbook to solve this) ______________________________________________________________________		10

21.	What are two of the advantages of financing a corporation by selling bonds rather than issuing stock?
	a.	_________________________________________________________________________________________________________________________	5
CH 10	b.	_________________________________________________________________________________________________________________________	5
22.	A company has outstanding 5,000 shares of 7% cumulative preferred stock outstanding with a $100 par value. It has paid no dividends in 2010 or
	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? $__________________________________________________________		5
	How much of the dividends would be paid out to the common stockholders of this company? $_____________________________________________		5
	Total Paid Out=$145,000
23.	Accounting Terminology Questions:
	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?	1
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).	1
	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.	1
	d.	The total amount of a company's accounts receivable minus the allowance for doubtful accounts.	1
	e.	Corporate stock which is repurchased by a corporation.	1
	f.	Used to calculate the percentage change in a base year amount to that of a current year.	1
	g.	A document which pledges title to specific assets as security for a loan	1
	h.	The cost of using borrowed funds	1
	i.	A financial measurement with cost of goods sold in the numerator	1
	j.	Money which is collected from a customer prior to delivering a product or performing a service	1
24.	The purpose of the following journal entry
	Debit to Allowance for Doubtful Accounts for $XXXXXX
CH 8	Credit to Accounts Receivable for $XXXXXX
	_______________________________________________________________________________________________________________________		5
	Using the ______________________________________________________________________________ method the same entry would be made		5
	with a debit to Bad Debt Expense and a credit to Accounts Receivable
25.	A company took out a $150,000 loan with its bank on 1-1-13 which requires them to pay 5 installments of $30,000 plus accrued interest at the annual rate of
CH 10	7% 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? $______________________________________________________		2
	At 12-31-15 how much of this loan will be shown as a long term liability? $________________________________________________		2
	The adjusting entry required on 12-31-13 to record the accrued interest on the loan would be
	Debit to __________________________________________________________ for $__________________________________________		2
	Credit to __________________________________________________________ for the same amount.		1
TOTAL 245 POINTS			245

ANSWER SHEET

ACCOUNTING 101A		E MAIL COMPLETED EXAM TO [email protected]
SECTION #14019
FALL SEMESTER 2014
FINAL EXAMINATION-CHAPTERS 7-13
		EACH QUESTION BELOW IS WORTH 10POINTS WITH 250 POINTS TOTAL SHOW HOW YOU COMPUTED YOUR ANSWER ON ALL NUMERICAL QUESTIONS
1.
	A	Establishment of Responsibility	4
CH 7	B	Segregation of Duties	4
	C	Documentation Procedures	4
2.	CREDIT SALES = $		5
6 PTS.	WHAT DOES A/R TURNOVER MEASURE?		5
CH 8
3.
6 PTS.	A	Deposits in	5
CH 7	B	Transit	5
4.
CH 13	TYPE OF IRREGULAR BUSINESS EVENT IS:		2
	DOLLAR INCREASE IN SALES IS $		2
	NONCURRENT ASSETS ARE $		2
	DIVIDING COMPONENTS OF INCOME STATEMENT BY AMOUNT OF TOTAL SALES IS		2

5.	EFFECT ON BANK RECONCILIATION (CHOOSE A,B,C OR D)
CH 7	1	A	1
	2	B	1
	3	D	1
	4	B	1
	5	D	1
6.	ACCOUNTS RECEIVABLE TURNOVER IS _______________________________________		5
CH 8	IF 1.5 TIMES HIGHER NUMBER OF DAYS TO COLLECT WOULD BE		5

7.	DEPRECIATION METHOD NOT BASED ON TIME PASSAGE IS:		5
CH9	DEPRECIATION METHOD RESULTING IN HIGHEST EXPENSE OVER LIFE OF THE ASST IS:		5

8.	WHEN ARE BONDS ISSUED AT A PREMIUM?		3
CH 10	WHEN ARE BONDS ISUED AT A DISCOUNT?		3
	WHEN ARE BONDS ISSUED AT FACE VALUE?		3
9.	TWO TYPES OF EMPLOYER PAYROLL TAXES
CH 10	A		5
	B		5
10.	FINANCIAL ANALYSIS
CH 13	A	MEASUREMENT OF	1
	B	CALCULATION OF	1
	C	MEASURES	1
	D	MEASURES	1
	E	PROFIT MARGIN TIMES _______________________ =ROA	1
	F	________________________________ DIVIDED BY EPS	1
	G	MEASURES	1
	H	CASH PROVIDED BY O/A-CAPITAL EXPENDITURES-DIVIDENDS PAID=	1
	I	MEASURES	1
	J	CASH DIVIDENDS DIVIDED BY NET INCOME=-	1
11.	A	CARRYING VALUE OF $500,000 FACE VALUE BONDS	6
CH 10	B	CARRYING VALUE OF $600,000 FACE VALUE BONDS	6

12.
CH 13	A	WHAT IS NET INCOME?	2
	B	HOW MUCH CASH DIVIDENDS WERE PAID OUT?	2

13.	A	YEAR 2012 DEPRECIATION EXPENSE IS $	5
CH 9	B	BOOK VALUE ON 12-31-13 IS $	5

14.	A	MISSING CREDIT IS TO WHAT ACCOUNT?
CH 9	B	AMOUNT OF MISSING CREDIT IS $
			5
	A	MISSING DEBIT IS TO WHAT ACCOUNT?	5
	B	AMOUNT OF MISSING DEBIT IS $
15.	YEARS ALLOWED TO AMORTIZE RESEARCH AND DEVELOPMENT COSTS?		5
CH 9	HOW MANY YEARS ALLOWED TO AMORTIZE A PATENT?		5
16.	CARRYING VALUE OF BONDS AT TIME OF REDEMPTION IS $		5
CH 10	CARRYING VALUE OF BONDS AT TIME OF REDEMPTION IS $		5

17.
CH 11	DEBIT TO ACCOUNT (TITLE)		5
	FOR $		5
	CREDIT TO ACCOUNT (TITLE)		5
	FOR $		5
	CREDIT TO ACCOUNT (TITLE)		5
	FOR $
18.	A	AMOUNT OF CURRENT ASSETS IS $	5
CH 10, 13	B	AMOUNT OF WORKING CAPITAL IS $	5

19.	A	HOW MANY SHARES WOULD I HAVE	5
CH 11	B	HOW MUCH WOULD EACH BE WORTH $	5

20.
CH 10, APP D	PRESENT VALUE OF INTEREST PAYMENTS IS $		10

21.	ADVANTAGES OF BOND FINANCING OVER ISSUING STOCK
CH 10,11	A		5
	B		5
22.	A	AMOUNT OF DIVIDENDS PAID TO PREFERRED SHAREHOLDERS IS $	5
CH 11	B	AMOUNT OF DIVIDENDS PAID TO COMMON STOCKHOLDER IS $	5

23.	ACCOUNTING TERMINOLOGY QUESTIONS
CH 7-13
	A		1
	B		1
	C		1
	D		1
	E		1
	F		1
	G		1
	H		1
	I		1
	J		1
24.	A	PURPOSE OF JOURNAL ENTRY IS:
CH 8	B	THE METHOD DESCRIBED IS:
25.	A	AMOUNT SHOWN AS CURRENT LIABILITY AT 12-31-13 IS $	2
CH 10	B	AMOUNT SHOWN AS LONG TERM LIABILITY AT 12-31-15 IS $	2
	C	DEBIT IS TO WHICH ACCOUNT?	2
	D	AMOUNT OF DEBIT IS $	2
	E	CREDIT IS TO WHICH ACCOUNT?	2

TOTAL 245 POINTS			245

ACCOUNTING ASSIGNMENT

FINAL EXAM

ANSWER SHEET

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