Devry ACCt504 midterm exam 2017
Subject: Business    / Accounting
Question

Grade Details – All Questions

Question 1. Question : (TCO A) Which of the following accounts is recorded as part of stockholders’ equity on the Balance Sheet?

Long-term debt

Retained earnings

Revenue

Expenses

Question 2. Question : (TCO B) For 2014, CAP Corporation reported net income of $96,000; net sales $1,440,000; and weighted average shares outstanding of 9,600. There were no preferred dividends. What was the 2014 earnings per share?

$100.00

$150.00

$10.00

$15.00

Question 3. Question : (TCO C) Purchasing inventory is an example of a(n)

operating activity.

investing activity.

financing activity.

noncash investing and financing activity.

Question 4. Question : (TCO D) Dividends declared are reported on which of the following statements?

Income Statement

Statement of Retained Earnings

Balance Sheet

Statement of Financial Position

Question 5. Question : (TCO E) Which of the following describes the normal balance and classification of the Unearned Revenue account?

Credit, liability

Debit, liability

Debit, stockholders’ equity

Credit, stockholders’ equity

Question 6. Question : (TCO F) The accrual accounting term used to indicate recording an expense before paying cash for the item is

deferral.

accrual.

depreciation.

prepayment.

Question 7. Question : (TCO A) XYZ Company recorded the following events involving a recent merchandise purchase.

– Received goods for $50,000, terms 2/10, n/30.

– Returned $1,000 of the shipment for credit due to damaged goods.

– Paid $1,500 for freight-in.

– Paid the invoice within the discount period.

As a result of these events, the company’s merchandise inventory

increased by $50,500.

increased by 49,500.

increased by $49,470.

increased by $49,520.

Question 8. Question : (TCO B) In periods of rising prices, which of the following inventory methods results in the highest gross profit figure?

FIFO

LIFO

Average cost method

Cannot be determined based on the information given

Question 9. Question : (TCO A) Which of the following is not a current liability?

Unearned revenue

Accounts payable

Accrued liabilities

Prepaid expenses

Question 10. Question : (TCO E) Which of the following is an internal control procedure?

Control environment

Comparisons and compliance monitoring

Promote operational efficiency

Encourage employees to follow company policies

11. (TCOs A and E) Your friend, Ellen, has hired you to evaluate the following internal control procedures.

Explain to your friend whether each of the numbered items below is an internal control strength or weakness. You must also state which internal control procedure relates to each of the internal controls.

For the weaknesses, you also need to state a recommendation for improvement.

(1) The cashier counts the total receipts and reconciles the receipts with the cash register total.

(2) Electronic documents are password-protected.

(3) The accountant is completely independent of the sales department.

(4) Invoices are not numbered.

(5) Large purchase orders must be approved by a manager.

Question 12. (TCOs B and D) Please prepare the following journal entries. Indicate which account should be debited and which account should be credited, along with the dollar amount of the debit and credit.

(1) Investors invest $300,000 in exchange for 30,000 shares of common stock.

(2) Company made payment on account for $500.

(3) Employees work Monday through Friday and are paid on Friday. Salary expense is $20,000 per day, and December 31 falls on a Tuesday.

(4) Company purchased Supplies for $2,000.

(5) The company needs to record Supplies used for $500.

Question 13. Question : (TCOs B and D) The following items are taken from the financial statements of Ashe Company for 2012:

Equipment $100,000

Accounts Receivable 12,000

Accounts Payable 9,000

Cost of Goods Sold 72,000

Utilities Expense 11,000

Depreciation Expense 17,000

Insurance Expense 9,000

Common Stock 200,000

Dividends 12,000

Rent Expense 3,000

Note Payable (due 2014) 40,000

Advertising Expense 14,000

Prepaid Insurance 17,000

Retained Earnings (beginning) 44,000

Accumulated Depreciation 50,000

Salaries Expense 60,000

Salaries Payable 3,500

Net sales 205,000

Supplies 4,000

Supplies Expense 5,000

Instructions

(a) Calculate the net income. (18 points)

(b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2012. (7 points)

(c) Calculate the gross profit percentage. (5 points)

Question 14. Question : (TCO D) The following items are taken from the financial statements of BGS Company for 2012:

Cash $500,000

Accounts Receivable 200,000

Supplies 70,000

Accounts Payable 147,300

Unearned Service Revenue 18,000

Equipment, net of accumulated depreciation 212,000

Common Stock 500,000

Retained Earnings 12/31/2011 78,300

Long-term debt 142,400

Service revenue 240,000

Cost of Goods Sold 72,000

Rent expense 36,000

Supplies expense 12,000

Insurance expense 24,000

Instructions

(a) Please create a classified balance sheet in good form for the year ended 2012. (25 points)

(b) Please calculate the current ratio. (5 points)

https://applewriters.com/place-order/

Order Now