Devry ACCT504 Final Exam

ACCT 504 Final Exam(TCO A) An advantage of the corporate form of business is that _____.(TCO A) When a corporation distributes a dividend, _____.(TCOs A, B) Below is a partial list of account balances for Cerner Company(TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____.(TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the lowest amount of income tax expense(TCOs A, E) Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be _____.(TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 96. The journal entry to record the issuance will show a _____.(TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____.(TCO F) One variation of the horizontal analysis is known as _____.(TCO F) Vertical analysis is also known as _____.(TCO F) Ratios are most useful in identifying _____.(TCO F) Short-term creditors are usually most interested in assessing _____.(TCO F) Return on common stockholder’s equity ratio is affected by _____.(TCO G) To calculate the market value of a bond, we need to use the time-value-of-money concept called _____.(TCO A) Below you will find selected information (in millions) from Coca-Cola Co.’s 2012 Annual Report(TCO B) The following selected data was retrieved from the Wal-Mart, Inc. financial statements for the year ending January 31, 2013(TCO D) You are CFO of Goforit, Inc., a wholesale distribution company specializing in emerging technologies. Your CEO is a brilliant marketer, but relies on you to explain issues and choices in accounting and finance. She has heard from other members of a CEO organization to which she belongs that a company’s net income can vary widely depending on which accounting choices are made from the “GAAP menu.”Assuming the goal is to maximize net income, choose an accounting treatment from each of the following scenarios, and explain to your CEO why the choice will produce the desired effect on reported Net Income for the current year. Include in your answer the effect of the choice on both the income statement and balance sheet.Required:a. Goforit carries significant electronics inventory in a competitive environment where prices are actually falling. Which inventory valuation method would you choose—LIFO, FIFO, or average cost? Assume that unit purchases exceed unit sales.b. Goforit has a large investment in warehouse equipment including conveyor belts, forklifts, and automated packaging systems. Which depreciation method would you choose: Straight line (SL) or double declining balance (DDB)?(TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below