Phoenix ACC421 Final Exam

ACC 421 Final ExamQuestion 1Transactions for Mehta Company for the month of May are presented below.Question 2On July 1, 2012, Crowe Co. pays $18,475 to Zubin Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Crowe Co. journalize the entry on July 1 and the adjusting entry on December 31Question 3Dresser Company’s weekly payroll, paid on Fridays, totals $11,000. Employees work a 5-day week. Prepare Dresser’s adjusting entry on Wednesday, December 31, and the journal entry to record the $11,000 cash payment on Friday, January 2Question 4Side Kicks has year-end account balances of Sales $905,610; Interest Revenue $15,980; Cost of Goods Sold $560,340; Operating Expenses $202,750; Income Tax Expense $36,890; and Dividends $20,275. Prepare the year-end closing entriesQuestion 5Financial information exhibits the characteristic of consistency whenQuestion 6What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United StatesQuestion 7Starr Co. had sales revenue of $592,700 in 2012. Other items recorded during the year wereQuestion 8Portman Corporation has retained earnings of $742,900 at January 1, 2012. Net income during 2012 was $1,803,740, and cash dividends declared and paid during 2012 totaled $83,090. Prepare a retained earnings statement for the year ended December 31, 2012. Assume an error was discovered: land costing $86,440 (net of tax) was charged to repairs expense in 2009Question 9On January 1, 2012, Richards Inc. had cash and common stock of $67,650. At that date the company had no other asset, liability or equity balances. On January 2, 2012, it purchased for cash $21,600 of equity securities that it classified as available-for-sale. It received cash dividends of $4,200 net of tax during the year on these securities. In addition, it has an unrealized holding gain on these securities of $5,460 net of tax. Determine the following amounts for 2012: (a) net income; (b) comprehensive income; (c) other comprehensive income; and (d) accumulated other comprehensive income (end of 2012).Question 10(Comprehensive Income)Armstrong Corporation reported the following for 2012: net sales $1,200,800; cost of goods sold $759,300; selling and administrative expenses $323,000; and an unrealized holding gain on available-for-sale securities $17,000.Prepare a statement of comprehensive income, using the two-income statement format. Ignore income taxes and earnings per shareQuestion 11Guillen, Inc. began work on a $7,127,900 contract in 2012 to construct an office building. Guillen uses the completed-contract method. At December 31, 2012, the balances in certain accounts were construction in process $1,722,700; accounts receivable $248,200; and billings on construction in process $1,139,300. Indicate how these accounts would be reported in Guillen’s December 31, 2012, balance sheetQuestion 12Lazaro, Inc. sells goods on the installment basis and uses the installment-sales method. Due to a customer default, Lazaro repossessed merchandise that was originally sold for $830, resulting in a gross profit rate of 40%. At the time of repossession, the uncollected balance is $660, and the fair value of the repossessed merchandise is $283. Prepare Lazaro’s entry to record the repossessionQuestion 13Harding Corporation has the following accounts included in its December 31, 2012, trial balance: Accounts Receivable $118,550; Inventories $295,750; Allowance for Doubtful Accounts $9,400; Patents $79,800; Prepaid Insurance $9,560; Accounts Payable $84,870; Cash $32,220. Prepare the current assets section of the balance sheet listing the accounts in proper sequenceQuestion 14Patrick Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2012: Prepaid Rent $17,020; Goodwill $58,130; Franchise Fees Receivable $3,560; Franchises $48,660; Patents $33,100; Trademarks $11,960. Prepare the intangible assets section of the balance sheetQuestion 15Hawthorn Corporation’s adjusted trial balance contained the following accounts at December 31, 2012: Retained Earnings $123,000; Common Stock $706,830; Bonds Payable $107,030; Additional Paid-in Capital $207,620; Goodwill $59,530; Accumulated Other Comprehensive Loss $151,170. Prepare the stockholders’ equity section of the balance sheetQuestion 16Keyser Beverage Company reported the following items in the most recent yearQuestion 17Linden Corporation is preparing its December 31, 2012, financial statements. Two events that occurred between December 31, 2012, and March 10, 2013, when the statements were issued, are described belowQuestion 18Roder Corporation has seven industry segments with total revenues as followsQuestion 19Operating profits and losses for the seven industry segments of Roder Corporation areQuestion 20Which of the following events will appear in the cash flows from financing activities section of the statement of cash flowsQuestion 21Heartland Company’s budgeted sales and budgeted cost of goods sold for the coming year are $140,470,000 and $35,604,000 respectively. Short-term interest rates are expected to average 10%. If Heartland can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year, compute its expected cost savings for the coming yearQuestion 22The financial statement which summarizes operating, investing, and financing activities of an entity for a period of time is theQuestion 23Ames Company reported 2012 net income of $152,940. During 2012, accounts receivable increased by $17,370 and accounts payable increased by $9,760. Depreciation expense was $47,650. Prepare the cash flows from operating activities section of the statement of cash flowsQuestion 24Martinez Corporation engaged in the following cash transactions during 2012Question 25Martinez Corporation engaged in the following cash transactions during 2012Question 26(Preparation of a Statement of Cash Flows)A comparative balance sheet for Orozco Corporation is presented belowQuestion 27Chris Spear invested $11,166 today in a fund that earns 10% compounded annually. To what amount will the investment grow in 3 years? To what amount would the investment grow in 3 years if the fund earns 10% annual interest compounded semiannuallyQuestion 28Amy Monroe wants to create a fund today that will enable her to withdraw $31,970 per year for 8 years, with the first withdrawal to take place 5 years from today. If the fund earns 11% interest, how much must Amy invest todayQuestion 29Zach Taylor is settling a $30,000 loan due today by making 6 equal annual payments of $7,091.29.What payments must Zach Taylor make to settle the loan at the interest rate of 11%, but with the 6 payments beginning on the day the loan is signedQuestion 30(Simple and Compound Interest Computations)Lyle O ‘Keefe invests $34,200 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 9 years. At the end of the 9 years, Lyle withdrew the accumulated amount of money.