(Solution) -ACC 421 Final Exam Guide Updated

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ACC 421 Final Exam Guide NEW

Number of Questions 30

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 Exercise 129   Prepare the necessary adjusting journal entries indicated by each item for the year ended December 31, 2017.
 Exercise 132 
                            1. An income statement.
                           2. A retained earnings statement.
                            3. A balance sheet.
 
Brief Exercise 3-2Splish Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions
 Brief Exercise 3-8     Included in Novak Company’s December 31 trial balance is a note receivable of $12,360. The note is a 4-month, 10% note dated October 1. Prepare Novak’s December 31 adjusting entry to record $309 of accrued interest, and the February 1 journal entry to record receipt of $12,772 from the borrower.
Brief Exercise 4-3        Kingbird Corporation had net sales of $2,423,900 and interest revenue of $39,100 during 2017. Expenses for 2017 were cost of goods sold $1,464,800, administrative expenses $218,000, selling expenses $283,500, and interest expense $54,200. Kingbird’s tax rate is 30%. The corporation had 103,100 shares of common stock authorized and 72,670 shares issued and outstanding during 2017. Prepare a condensed multiple-step income statement for Kingbird Corporation.
Exercise 4-2           Presented below is information related to Windsor Company at December 31, 2017, the end of its first year of operations.
(a)                    Income from operations
(b)                   Net income
(c)                    Comprehensive income
(d)                   Retained earnings balance at December 31, 2017
 
 
Brief Exercise 4-7      Sheffield Company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable, based on an aging analysis. In 2017, Sheffield decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $383,900 instead of $298,500. In 2017, bad debt expense will be $132,400 instead of $96,720. If Sheffield’s tax rate is 29%, what amount should it report as the cumulative effect of changing the estimated bad debt rate?
Exercise 104          Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings.
(a)  Compute the net income for the current year.
 
Question 13           The Marin, Inc. sold 10,350 season tickets at $2,040 each. By December 31, 2017, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2017?
Brief Exercise 5-2     Martinez Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2017: Cash $9,750, Land $45,600, Patents $17,100, Accounts Receivable $94,270, Prepaid Insurance $5,640, Inventory $39,400, Allowance for Doubtful Accounts $4,500, and Equity Investments (trading) $11,570.Prepare the current assets section of the balance sheet
Brief Exercise 5-8     Included in Sunland Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable $221,400, Pension Liability $380,600, Discount on Bonds Payable $31,100, Unearned Rent Revenue $43,600, Bonds Payable $406,600, Salaries and Wages Payable $29,000, Interest Payable $13,460, and Income Taxes Payable $30,460.
Brief Exercise 5-9     Included in Windsor Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable $249,600, Pension Liability $376,400, Discount on Bonds Payable $29,400, Unearned Rent Revenue $47,100, Bonds Payable $409,200, Salaries and Wages Payable $27,100, Interest Payable $13,990, and Income Taxes Payable $36,700.
Brief Exercise 5-13    Sarasota Company reported 2017 net income of $152,800. During 2017, accounts receivable increased by $14,580 and accounts payable increased by $9,723. Depreciation expense was $46,700.
Brief Exercise 5-14    Compute the net cash provided (used) by investing activities.
Brief Exercise 5-15    Compute the net cash used (provided) by financing activities. 7.
Brief Exercise 6-2      What amount must he invest today if his investment earns 12% compounded annually? What amount must he invest if his investment earns 12% annual interest compounded quarterly?
 Brief Exercise 6-6      How much must he invest at the end of each year, at 8% interest, to meet his needs?
 Brief Exercise 6-15    What amount will Pearl receive when it issues the bonds?
 Exercise 6-12          In which building would you recommend that The Sheridan Inc. locate, assuming a 12% cost of funds?
 Brief Exercise 18-2    On May 10, 2017, Swifty Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2017. Greig agrees to pay the full contract price of $2,060 on July 15, 2017. The cost of the goods is $1,350. Swifty delivers the product to Greig on June 15, 2017, and receives payment on July 15, 2017. Prepare the journal entries for Swifty related to this contract. Either party may terminate the contract without compensation until one of the parties performs.
Brief Exercise 18-8     Presented below are three revenue recognition situations.
(a)                    Groupo sells goods to MTN for $932,000, payment due at delivery.
(b)                   Groupo sells goods on account to Grifols for $753,000, payment due in 30 days.
(c)                    Groupo sells goods to Magnus for $537,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $499,700.
 Brief Exercise 18-10(a)        Prepare the journal entries for Kingbird on March 1, 2017.
                        (b)       Prepare the journal entries for Kingbird on December 31, 2017.
Brief Exercise 18-13           Prepare Carla’s journal entries to record (a) the sale on July 10, 2017, and (b) $84,200 of returns on October 11, 2017, and on October 31, 2017. Assume that Carla prepares financial statement on October 31, 2017.
Question 17             Classify the following items as (1) operating, (2) investing, (3) financing, or (4) significant noncash investing and financing activities, using the direct method.
Brief Exercise 23-1    Novak Corporation is preparing its 2017 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2017 statement of cash flows.
Brief Exercise 23-7    Whispering Corporation had January 1 and December 31 balances as follows.
Brief Exercise 23-8    In 2017, Martinez Corporation had net cash provided by operating activities of $511,000, net cash used by investing activities of $992,000, and net cash provided by financing activities of $570,000. At January 1, 2017, the cash balance was $330,000.
Brief Exercise 23-9    Teal Corporation had the following 2017 income statement.
                      (a) Prepare Teal’s cash flows from operating activities section of the statement of cash flows using the direct method.
(b) Prepare Teal’s cash flows from operating activities section of the statement of cash flows using the indirect method.
 
Brief Exercise 24-8    (a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $530,000, what is the amount of current liabilities?
(b) A company had an average inventory last year of $209,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?
                      (c) A company has current assets of $90,000 (of which $44,000 is inventory and prepaid items) and current liabilities of $44,000. What is the current ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be?
                      (d) A company has current assets of $628,000 and current liabilities of $255,000. The board of directors declares a cash dividend of $195,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend?
Exercise 24-3  Kingbird Company is involved in four separate industries. The following information is available for each of the four industries.
                (a)                Revenue test.
                (b)               Operating profit (loss) test.    
                (c)                Identifiable assets test.