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Homework answers / question archive / University of Florida - ACG 2021 Group Project 1 1)An example of a deferral would be: a
University of Florida - ACG 2021
Group Project 1
1)An example of a deferral would be:
a.The payment of a premium on an insurance policy before the coverage period.
b. Interest owed on a loan.
c. Interest earned but not yet collected on a loan made to a franchisee.
d. Wages earned by employees but not yet paid.
e. All of the above.
2. When a company ships product to a customer with the terms FOB destination, which of the following is true?
a. The seller will pay the shipping charges and title will not be exchanged until goods are received by the customer.
b. The buyer will pay the shipping charges and title is exchanged at point of shipment.
c. The seller will pay the shipping and title is exchanged at point of shipment.
d. The buyer will pay the shipping and title is exchanged when the goods are received by the customer.
e. None of the above.
3. A company with new credit sales of $1,095,000, beginning accounts receivables of
$90,000, and ending accounts receivables of $114,000 has days sales in accounts receivable of:
a. 40 days
b. 37 days
c. 34 days
d. 44 days
e. None of the above.
4. Assume a company's January 1, 2014, financial position was: Assets, $150,000 and Liabilities, $60,000. During January 2009, the company completed the following transactions: (A) paid on a note payable $10,000 (no interest was paid); (B) collected an accounts receivable, $9,000; (C) paid an accounts payable, $5,000; and (D) purchased a truck, $5,000 cash, and a $20,000 note payable from a bank. The company's January 31, 2014 financial position is:
Assets Liabilities Stockholders’ Equity
A. $150,000 $60,000 $90,000
B. $155,000 $65,000 $90,000
C. $160,000 $75,000 $85,000
D. $170,000
E. None of the above. $100,000 $70,000
5. Adjusting entries:
A. always include the cash account.
B. usually are recorded as of the first day of the accounting period.
C. always change at least one income statement account balance and one balance sheet account balance.
D. are prepared after closing entries.
E. are recorded at the option of the company.
6. Michael Corporation received $400,000 cash invested by its owners. The effect on the accounting equation was
A. assets and liabilities each increased by $400,000.
B. assets increased and liabilities decreased by $400,000.
C. assets and revenues each increased by $400,000.
D. stockholders' equity and revenues each increased by $400,000.
E. stockholders' equity and assets each increased by $400,000.
7. The Mickey Company reported revenue of $30,752 million for 2013. Their ending accounts receivable balance was $5,330 million in 2013 and $4,912 million in 2012. Cash collected from customers equals:
A. $25,013 million
B. $28,926 million
C. $30,334 million
D. $31,170 million.
E. None of the answers is correct
8. On April 1, 2013, Allen Company signed a $500,000, one-year, 6 percent note payable. At due date, March 31, 2014, the principal and interest will be paid. Interest expense should be reported on the income statement for the year ended December 31, 2013 as: A. $30,000
B. $22,500
C. $7,500
D. $15,000
E. $0
9. Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works estimated that $5,000 of the current $98,000 of accounts receivable would be uncollectible. The allowance for doubtful accounts had a $400 debit balance at year-end prior to adjustment. The amount of uncollectible account expense that should appear in Rosco's income statement for the year is
A. $5,000.
B. $5,400.
C. $4,600.
D. $0.
E. None of the above.
10. Morgan Company owes Regan Company $1,000, Morgan would reflect this on its:
A. Statement of cash flows.
B. Income statement.
C. Balance sheet.
D. Statement of stockholders' equity.
E. Statement of retained earnings.
11. Oakwood Company had accounts receivable of $850,000 and an allowance for doubtful accounts of $21,500 just prior to writing off as worthless an account receivable for Hyland Company of $5,000. Calculate the net realizable value of accounts receivable as shown by the accounting records after the write-off.
A. $850,000
B. $828,500
C. $845,000
D. $5,000
E. None of the above
12. Which of the following is commonly classified as a current asset?
A. Land.
B. Property and equipment.
C. Merchandise inventory.
D. Notes Receivable.
E. None of the above
13. Which of the following transactions would cause retained earnings to increase?
A. Collection of a customer's account.
B. Loan from a bank.
C. Sale of service to a customer.
D. Wage costs owed to employees.
E. Payment of a notes payable.
14. When analyzing a company's debt ratio
A. a high debt ratio is better than a low debt ratio.
B. the norm for debt ratios is from 80% to 90%.
C. the ratio measures a company’s ability to pay its current liabilities.
D. the ratio indicates the proportion of a company’s assets that are financed with debt.
E. None of the above.
15. Stock investments that are to be sold in the near future with the intent of generating profits on the sale are:
A. Stockholders’ Equity
B. Debt securities
C. Trading securities
D. Available for sale securities
E. Held to maturity investments
16. The closing entry made to close service revenue would include a debit to:
A. Service revenue and a credit to net income
B. Service revenue and a credit to retained earnings
C. Retained earnings and a credit to service revenue
D. Net income and a credit to service revenue
E. None of the above.
17. On January 1, 2013 Mammoth Corporation had retained earnings of $2,500,000. During 2013, they reported net income of $50,000 and dividends of $75,000. What is the amount of Mammoth's retained earnings at the end of 2013?
18. On December 31, 2013 Ace Corporation reports total assets of $80,000, total liabilities of
$25,000, and paid in capital of $40,000. Calculate Ace Corporation’s total stockholders’ equity on December 31, 2013.
19. Starseekers, Inc. began the year with $4,800 of accounts receivable and an allowance for uncollectible accounts of $546. Starseekers’ sales were all on account and amounted to
$41,800 during the year ended September 30, 2009. Collections from customers’ amounts to $40,600 and the company wrote-off customer account balances totaling $500 during the year.
a. Using T-accounts, determine how much Starseekers’ customers owe the company at year-end (the ending balance in Accounts Receivable).
b. The company currently uses the percentage of credit sales method for determining its uncollectible account expense. Historically, uncollectible accounts have approximated 3% of credit sales. Prepare the related adjusting entry and using a T-account, determine the ending balance in the allowance for doubtful accounts.
c. Assume instead that the company uses the aging of accounts receivable method. This method resulted in an estimate of uncollectible account of $1,105. Prepare the related adjusting journal entry and, using a T-account determine the ending balance in the allowance for doubtful accounts.
20. Assume the company neglected to record the appropriate adjusting entries for the following items. For each overlooked adjusting entry indicate the effect on Assets, Liabilities, Stockholders’ Equity, and Net Income for the current year and the next year.
a. The current year’s depreciation on the building, furniture, equipment, delivery vehicles and equipment was not recorded.
b. A customer payment made in advance for three months of services during the last month of the year was properly recorded; but no adjustment was made at year- end.
21. At the beginning of 2013, Buck Corporation had assets of $400,000 and liabilities of
$250,000. During the year, assets increased by $30,000 and liabilities decreased by
$30,000. What was the total amount of stockholders' equity at the end of 2013?
22. Prepare Journal Entries for the following transactions:
(a) Purchased short-term investments for $18,000
(b) Borrowed $12,000 cash from a local bank, payable in three months
(c) Paid back the $12,000 borrowed in (b)
(d) Signed an agreement with a cleaning service to pay it $120 per week for cleaning the corporate offices. The fee will be paid when the services are complete.
(e) Purchased a building for $60,000, equipment for $15,000, and four acres of land for
$14,000; paid $9,000 in cash and signed a note for the balance due
23. Prepare adjusting journal entries required for the following on December 31, 2013:
a. A company had $4,000 of office supplies on hand on January 1, 2013, purchased
$6,300 of supplies during the year, and had $1,200 of supplies on hand on December 31, 2013.
b. On March 1, 2013 a three year insurance premium of $27,000 was paid for coverage beginning on that date. The payment was recorded in the prepaid insurance account.
c. A delivery truck was purchased for $30,000 on May 1, 2013. Depreciation is estimated to be $6,000 per year or $500 per month.
d. The company rents some of its unused factory space to a small manufacturer. The lease required an advance payment of $18,000 for six month’s rent. The advance payment received from the tenant was recorded as unearned revenue upon receipt on August 1, 2013.
e. Employees work five days per week and are paid $75,000 every other Friday. The last payday during the company’s fiscal year was Friday December 26, 2013.
