Problem 1) Which of the following is not considered an acceptable inventory cost method according to GAAP?
A) First in , First out (B) First in Last out (C) Last in Fist out (D) Average cost
Problem 2) The cost flow assumption selected by a company need not correspond to the actual physical movement of the company's merchandise
A) True (B) False
Problem 3)Which of the following results in the inventory being stated at the most current acquisition costs
A) Specific identification (B) Lifo (C) Fifo (D) average cost
Problem 4) The write- down of inventory:
A) only affects the balance sheet and not the income statement(B) Only affects the income statement and not the balance sheet(C) Affects both the income statement and the balance sheet(D) Affects neither the income statement nor the balance sheet.
Use the following to answer question :
At the end of last year, Tech Toys had merchandise costing $120,000in inventory. During January of the current year, the company purchase merchandise costing $82,000, and sold merchandise that it had purchased at a total cost of $64,000. Tech Toys uses a perpetual inventory system.
Problem 5) Refer to the above data. The total amount debited to the Inventory account during January was:
A) $0 (B) $64,000 (C) $82,000 (D) $120,000.
Problem 6) Refer to the above data: The balance in the inventory account at January 31 was:
A) $82,000 (B) $120,000 (C) $138,000 (D) $202,000
Problem 7) Refer to the above data: The amount of goods transferred from the inventory accounts to the cost of goods sold account during January was
A) $0 (B) $64,000 (C) $82,000 (D) $56,000
Problem 8) During a period of rising prices,a company might report higher profits by using
A) Average cost (B) LIFO (C) Just In Time (D) FIFO
Use the following question to answer the question
During the current year, Little John Store had net sales of $800 million a cost of goods sold of $600 million, average accounts receivable of $80 million and average inventory of 60 million.
Problem 9) Refer to the above data Little John's inventory turnover rate is:
A) 5 times (B) 10 times (C) 15 times (D) some other amount
Problem 10) Refer to the above data Assuming a 365 day year, the number of days require for little John to convert its average inventory into cash is:
(A) 36.5 (B) 73.0 (C) 24.3 (D) some other price
Problem 11) An asset which costs $7,200 and has accumulated depreciation of $1,800 is sold for $4,500. What amount will be recognized when the asset is sold
A) a gain of $900(B) Loss of $900 (C) loss of $2,700 gain of (D) $2,700
Problem 12) Carlson Imports sold a depreciable plant asset of $35,000. The accumulated depreciation amounted to $70,000, and a loss of $5,000 was recognized on the sale. Under these circumstances the original cost of the asset must have been
A) $65,000 (B) $75,000 (C) $100,000 (D) 110,000
Use the following to answer the question
On April 2,2005 Empress,Inc acquire a new piece of filtering equipment The cost of the equipment was $110,000 with a residual value of $20,000 at the end of its estimated useful lifetime of 6 years
Problem 13) Refer to the above information. Assume that in its financial statement, empress uses straight -line depreciation and rounds depreciation for a fractional years to the nearest month. Depreciation recognized on this equipment in 2005 qnd 2006 will be
A)$12,500 in 2005 and $16,667 in 2006 (B) $4,160 in 2005 and $16,667 in 2006 (C) $3,750 in 2005 and $15,000 in 2006 (D) $11,250 in 2005 and $15,000 in 2006
Problem 14) Refer to the above information. Assume that in its financial statement, Empress uses straight-line depreciation and the half-year convention. Depreciation recognized on this equipment in 2005 and 2006 will be
A) $4,167 in 2005 and $16,667 IN 2006(B) $8,333 in 2005 and $16,667 in 2006 (C) $7,500 in 2005 and $15,000 in 2006 (D) $3,750 in 2005 and $15,000 in 2006
Problem 15) Refer to the above information. If Empress uses straight line depreciation with the half-year convention the book value of the equipment at December 31,2006 will be:
A) $83,750 (B) $87,500 (C) $73,750 (D)$84,250
Problem 16) Most companies benefits by using accelerated depreciation method for income tax purpose
A) True (B) False
Problem 17) A $1,000 bond that sells for 102 has a cost of
A)$1002 (B) $1020 (C) $1200 (D) $1,000
Use the following to answer the question
On September 1, 2005, Jack Company purchase a building from Jill Corporation by paying $100,000 cash and issuing a one year note payable for the balance of the purchase price interest on the note is stated at an annual rate of 9% and is paid at maturity. In its December 31, 2005, balance sheet, Jack correctly presented the note and Interest payable as the follows:
Interest payable................................................$15,000
Note payable,9%, due September 1, 2006 ............$500,000
Problem 18) Refer to the above data, how much must jack pay Jill corporation on September 1, 2006, when the note matures?
A) $500,000(B) $530,000 (C)$545,000 (D) some of amount.
Problem 19) Refer to the above data , What is the amount of interest expense Jack will recognize on this note in 2006?
A) $15,000 (B) $45,000 (C) $30,000 (D) some other amount
Problem 20) Refer to the above data, What is the total cash paid for the building purchase by Jack?
A) $600,000 (B)$630,000 (C) $645,000 (D) $615,000
Problem 21) Unearned revenue:
A) Appears on the income statement as income (B) Appears on the income statement as are reduction to income (C) appears on the income statement as a liability (D) Appears on the balance sheet as a liability.
Use the following to answer the question
Sunrise Corporation issues $3000,000 of 12%, 10 year bond dated December 31, year 1. the bond are issued on April 30, year 2, at the price of 100 plus accrued interest. Interest on bond is payable semiannually each June 30 and December 31.
Problem 22) Refer to the above data, The total amount of cash received by Sunrise Corporation upon issuance of the bonds on April 30, year 2, is
A) $3,000,000 (B) $3,120,000 (C) $3,060,000 (D) $3,180,000
Problem 23) Refer to the above data. The journal entry made sunshine Corporation to record the first semiannual interest payment on the bond includes
A) debit to bond interest expense of $180,000 (B) Debit to bond interest payable of $60,000 (C) debit to bond interest expense of $60,000 (D) debit to bond interest expense of $120,000
24) Refer to the above data , The amount of Sunrise's interest expense on this bond issue during year 2 amount to:
A) $240,000 (B)$ 320,000 (C) $180,000 (D) $270,000