1. (TCO A, B, D) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $33,000 at the end of the year. If the balance of the Allowance for Doubtful Accounts is $12,000 debit before adjustment; what is the amount of bad debt expense for that period? (Points: 5)
$33,000
$12,000
$45,000
$21,000
2. (TCO A, E) Waldon Clinic purchases land for $55,000 cash. The title and attorney fees totaled $5,000. The clinic has the land graded for $4,200. What amount does Waldon Clinic record as the cost for the land? (Points: 5)
$55,000
$60,000
$64,200
$79,200
$33,000
$12,000
$45,000
$21,000
2. (TCO A, E) Waldon Clinic purchases land for $55,000 cash. The title and attorney fees totaled $5,000. The clinic has the land graded for $4,200. What amount does Waldon Clinic record as the cost for the land? (Points: 5)
$55,000
$60,000
$64,200
$79,200
3. (TCO A, E) Equipment with a cost of $212,000 has an estimated salvage value of $12,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 6,000 hours? (Points: 5)
$80,000
$84,800
$42,400
$40,000
4. (TCO D) A cash register tape shows cash sales of $6,100 and sales taxes of $300. The journal entry to record this information is (Points: 5)
Debit Cash $6,100; Credit Sales $6,100
Debit Cash $6,100; Credit Sales Tax Revenue $300; Credit Sales $5,800
Debit Cash $6,400; Credit Sales $6,100; Credit Sales Taxes Payable $300
Debit Cash $6,100; Debit Sales Tax Expense $300; Credit Sales $6,400
5. (TCO D) Payne Corporation issues 100, 20-year, 6% $1,000 bonds dated July 1, 2010, at 94. The journal entry to record the issuance will show a (Points: 5)
Debit to Cash of $100,000
Credit to Bonds Payable of $94,000
Credit to Premium on Bonds Payable of $4,000
Debit to Discount on Bonds Payable of $6,000
6. (TCO A) If Maxwell Company issues 25,000 shares of $1 par value common stock for $100,000, the account (Points: 5)
Cash will be debited for $25,000.
Common Stock will be credited for $100,000.
Paid-in Capital in Excess of Par Value will be credited for $75,000.
Paid-In Capital in Excess of Par Value will be credited for $25,000.
7. (TCO A, C) Outstanding stock of the Horizon Networks included 30,000 shares of $3 par common stock and 40,000 shares of 6%, $5 par non-cumulative preferred stock. In 2009, Horizon declared and paid dividends of $8,000. In 2010, Horizon declared and paid dividends of $18,000. How much of the 2010 dividend was distributed to preferred shareholders? (Points: 5)
$8,000
$16,000
$12,000
$18,000
8. (TCO C) Accounts receivable arising from sales to customers amounted to $100,000 and $80,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is (Points: 5)
$20,000
$980,000
$1,000,000
$1,020,000
9. (TCO C) LBJ Company reported net income of $90,000 for the year. During the year, accounts receivable increased $8,000, merchandise inventory increased $15,000, accounts payable increased by $25,000, and depreciation expense of $20,000 was recorded. Net cash provided by operating activities for the year is (Points: 5)
$158,000
$112,000
$78,000
$72,000
10. (TCO F) If you are making comparisons with other companies to provide insight into a company's competitive position, you are performing what type of analysis? (Points: 5)
Common-size analysis
Intercompany
Intracompany
Industry average
11. (TCO F) Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time (Points: 5)
that has been arranged from the highest number to the lowest number.
that has been arranged from the lowest number to the highest number.
to determine which numbers are in error.
to determine the amount and/or percentage increase or decrease that has taken place.
12. (TCO F) If we perform horizontal analysis of a company that has 2010 sales of $1,000,000 and 2009 sales of $700,000, the percentage change is (Points: 5)
70%
43%.
37%
30%
13. (TCO F) Ratio analysis is helpful for (Points: 5)
identifying differences between numbers.
identifying causes of variances between numbers.
performing a horizontal analysis.
comparing companies of different sizes.
14. (TCO F) A common measure of profitability is the (Points: 5)
Free cash flow.
Current ratio.
Gross profit rate.
Cash debt coverage ratio.
15. (TCO F) The Price-earnings ratio is affected by (Points: 5)
Net Income
Preferred dividends
Market price per share
All of the above
$80,000
$84,800
$42,400
$40,000
4. (TCO D) A cash register tape shows cash sales of $6,100 and sales taxes of $300. The journal entry to record this information is (Points: 5)
Debit Cash $6,100; Credit Sales $6,100
Debit Cash $6,100; Credit Sales Tax Revenue $300; Credit Sales $5,800
Debit Cash $6,400; Credit Sales $6,100; Credit Sales Taxes Payable $300
Debit Cash $6,100; Debit Sales Tax Expense $300; Credit Sales $6,400
5. (TCO D) Payne Corporation issues 100, 20-year, 6% $1,000 bonds dated July 1, 2010, at 94. The journal entry to record the issuance will show a (Points: 5)
Debit to Cash of $100,000
Credit to Bonds Payable of $94,000
Credit to Premium on Bonds Payable of $4,000
Debit to Discount on Bonds Payable of $6,000
6. (TCO A) If Maxwell Company issues 25,000 shares of $1 par value common stock for $100,000, the account (Points: 5)
Cash will be debited for $25,000.
Common Stock will be credited for $100,000.
Paid-in Capital in Excess of Par Value will be credited for $75,000.
Paid-In Capital in Excess of Par Value will be credited for $25,000.
7. (TCO A, C) Outstanding stock of the Horizon Networks included 30,000 shares of $3 par common stock and 40,000 shares of 6%, $5 par non-cumulative preferred stock. In 2009, Horizon declared and paid dividends of $8,000. In 2010, Horizon declared and paid dividends of $18,000. How much of the 2010 dividend was distributed to preferred shareholders? (Points: 5)
$8,000
$16,000
$12,000
$18,000
8. (TCO C) Accounts receivable arising from sales to customers amounted to $100,000 and $80,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is (Points: 5)
$20,000
$980,000
$1,000,000
$1,020,000
9. (TCO C) LBJ Company reported net income of $90,000 for the year. During the year, accounts receivable increased $8,000, merchandise inventory increased $15,000, accounts payable increased by $25,000, and depreciation expense of $20,000 was recorded. Net cash provided by operating activities for the year is (Points: 5)
$158,000
$112,000
$78,000
$72,000
10. (TCO F) If you are making comparisons with other companies to provide insight into a company's competitive position, you are performing what type of analysis? (Points: 5)
Common-size analysis
Intercompany
Intracompany
Industry average
11. (TCO F) Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time (Points: 5)
that has been arranged from the highest number to the lowest number.
that has been arranged from the lowest number to the highest number.
to determine which numbers are in error.
to determine the amount and/or percentage increase or decrease that has taken place.
12. (TCO F) If we perform horizontal analysis of a company that has 2010 sales of $1,000,000 and 2009 sales of $700,000, the percentage change is (Points: 5)
70%
43%.
37%
30%
13. (TCO F) Ratio analysis is helpful for (Points: 5)
identifying differences between numbers.
identifying causes of variances between numbers.
performing a horizontal analysis.
comparing companies of different sizes.
14. (TCO F) A common measure of profitability is the (Points: 5)
Free cash flow.
Current ratio.
Gross profit rate.
Cash debt coverage ratio.
15. (TCO F) The Price-earnings ratio is affected by (Points: 5)
Net Income
Preferred dividends
Market price per share
All of the above
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