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ACCT 312 Final Exam Answers

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3. (TCO 5) Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how smart hiring practices can satisfy the purpose of internal control (15 points) and (2) provide an example of how this control could be implemented. (10 points) (Points : 25)1) Entering a transaction in the journal does not get the data into the ledger. Data must be copied to the ledger—a process called posting. Debits in the journal are always posted as debits in the accounts, and likewise for credits. (Harrison 77)

4. (TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the First in First out (FIFO) method is applied (15 points) and (2) provide an example of the impact that this method of inventory valuation will have on Gross Profit. (10 points) (Points : 25)

5. (TCO 1) To evaluate the financial operation and health of a business ratio analysis is used. (1) Provide the formula for the Acid-test (or Quick)


Ratio and explain how it is computed (10 points) and (2) provide an example of how this ratio can be used in decision-making in business. (15 points) (Points : 25)

1. (TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles). BagODonuts accountant estimated that the truck’s residual value would be $2,400 at the end of its useful life. The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year.

1. Calculate depreciation expense for the truck for each year (2010-2013) using the:

a. Straight-line method.

b. Double-declining balance method.

c. Units of Production method.

(For units-of-production and double-declining balance, round to the nearest two decimals after each step of the calculation.)


2. Which method best tracks the wear and tear on the van?

3. Which method would BagODonuts prefer to use for income tax purposes? Explain in detail why BagODonuts prefers this method. (Points : 25)

Question 2.2.

(TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:

Preferred Stock: 7%, par value $100 per share, 100,000 shares.

Common Stock: $1 par value, 500,000 shares.

The following transactions occurred during the year:


1/19/12 – Issued 100,000 shares of common stock for $17 cash per share.

1/31/12 – Issued 3,000 shares of preferred stock for $115 cash per share.

11/1/12 – Repurchased 30,000 shares of common stock for $22 cash per share.

12/1/12 – Declared and paid a total dividend of $95,000.

Required:

1. Prepare the journal entry for each transaction listed above.

2. In your own words, explain the main differences between common and preferred stock.


(Points : 25)

Question 3.3. (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions. Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented. (5 points each with 2 points for listing and 3 points for a description) (Points : 25)

4. (TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.

Account

Balance

Common stock

$5,100

Accounts payable

$4,400

Service revenue

$17,100

Land

$28,800


Note payable

Cash

$9,500

$5,200

Dividends

$6,100

Utilities expense

$2,100

Accounts receivable

$10,600

Delivery expense

$700

Retained earnings

$25,600

Salary expense

$8,200

Prepare the company’s trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter. For example, Accounts


Receivable comes before Land. List the expense with the largest balance first, the expense with the next largest balance second, and so on.

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ACCT 312 Week 1 Homework Solution

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E 16–3: Taxable income given; calculate deferred tax liability

E 16–5: Temporary difference; future deductible amounts; taxable income given

E 16–10: Deferred tax asset; taxable income given; valuation allowance

E 16–22: Operating loss carry back and carry forward


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ACCT 312 Week 1 Quiz Answers

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1. (TCO 1) Which causes a temporary difference between taxable and pretax accounting income? (Points : 10)

2. (TCO 1) Which difference between financial accounting and tax accounting ordinarily creates a deferred tax liability? (Points : 10)

3. (TCO 1) Which temporary difference ordinarily creates a deferred tax asset? (Points : 10)

4. (TCO 1) The tax effect of a net operating loss (NOL) carry back usually (Points : 10)


5. (TCO 1) Which causes a permanent difference between taxable income and pretax accounting income? (Points : 10) *************************************

ACCT 312 Week 2 Homework Solution

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E 17–5: Determine pension plan assets

E 17–7: Changes in plan assets; determine cash contributions

E 17–10: Determine pension expense

E 17–12: PBO calculations; ABO calculations; present value concepts


E 17–15: Pension spreadsheet *************************************

ACCT 312 Week 2 Quiz Answers

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Pensions and Other Postretirement Benefits

1. (TCO 2) Which is not a requirement for a qualified pension plan? (Points : 10)

2. (TCO 2) Defined contribution pension plans that link the amount of contributions to company performance are often called (Points : 10)

3. (TCO 2) The portion of the obligation that plan participants are entitled to receive regardless of their continued employment is called the (Points : 10)


4. (TCO 2) Payment of retirement benefits (Points : 10)

5.(TCO 3) Our company's defined benefit pension plan had a PBO of $530,000 on January 1, 2013. During 2013, pension benefits paid were $80,000. The discount rate for the plan for this year was 10%. Service cost for 2013 was $160,000. Plan assets (fair value) increased during the year by $90,000. The amount of the PBO at December 31, 2013, was *************************************

ACCT 312 Week 3 Homework Solution

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E 18–5: Issuance of shares; noncash consideration

E 18–11: Retirement of shares


E 18–13: Treasury stock

E 18–19: Stock dividend *************************************

ACCT 312 Week 3 Quiz Answers Shareholders Equity

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1. (TCO 4) Common shareholders usually have all of the following rights, except (Points : 10)

2. (TCO 4) Authorized common stock refers to the total number of shares (Points : 10)

3. (TCO 4) When a property dividend is declared, the property to be distributed should be revalued to fair value as of the (Points : 10)


4. (TCO 4) When treasury shares are resold at a price below cost, (Points : 10)

5. (TCO 4) Our company has outstanding 400 million shares, $2 par common shares, selling for $8 per share. After a 1 for 4 reverse stock split, (Points : 10) *************************************

ACCT 312 Week 4 Homework Solution

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E 19–2: Restricted stock award plan

E 19–5: Stock options


E 19–10: EPS; shares issued; stock dividend

E 19–17: EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds

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ACCT 312 Week 4 Midterm Answers

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1. (TCO 1) Which event will result in a deferred tax liability?

2. (TCO 1) Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax asset?


3. (TCO 2) Interest cost is calculated by multiplying the

4. (TCO 3) Accounting for postretirement healthcare benefits is similar, in most respects, to accounting for

5. (TCO 4) Retained earnings represents a company's

6. (TCO 4) Any dividend that is considered to be a liquidating dividend will

7. (TCO 5) Executive stock options should be reported ascompensation expense

8. (TCO 5) Our company granted options for 2 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $9 per option. If the options have a vesting period of 5 years, which would be the balance in Paid-in Capital - Stock Options 3 years after the grant date?

9. (TCO 6) Our company declared and paid cash dividends to its common shareholders in February of the current year. The dividend


10. (TCO 6) Basic earnings per share is computed using <hr style="" class="ProductSectionSeparator" /> *************************************

ACCT 312 Week 5 Homework Solution

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E 20–1: Change in principle; change in inventory methods

E 20–10: Change in depreciation methods

E 20–17: Change in estimate; useful life and residual value of equipment

E 20–24: Inventory errors *************************************


ACCT 312 Week 6 Homework Solution

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E 21–14: Identifying cash flows from investing activities and financing activities

E 21–21: Cash flows from operating activities (direct method) derived from an income statement and cash flows from operating activities indirect method)

P 21–4: Statement of cash flows; direct method

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ACCT 312 Week 7 Course Project


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ACCT 312 Week 7 Homework Solution

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ACCT 312 Week 7 Quiz Answers

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1. (TCO 8) Which is reported as an operating activity in the statement of cash flows? (Points : 10)

2. (TCO 8) Using the direct method, cash received from customers is calculated as sales (Points : 10)

3. (TCO 8) Which is not reported as an adjustment to net income when using the indirect method of computing net cash flows from operating activities? (Points : 10)

4. (TCO 8) A loss on the sale of machinery should be reported in the statement of cash flows as (Points : 10)

5. (TCO 8) Each year, our company prepares a reconciliation schedule that compares its income statement with its statement of cash flows on both the direct and indirect method bases. In its 2013 income statement, our company reported $29,000 for insurance expense. It paid $36,000 in insurance premiums during 2013. In its reconciliation schedule, our company should (Points : 10)


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ACCT 312 Inspiring Innovation--tutorialrank.com  

For more course tutorials visit www.tutorialrank.com ACCT 312 Final Exam Answers 3. (TCO 5) Internal Control Procedures are required to...

ACCT 312 Inspiring Innovation--tutorialrank.com  

For more course tutorials visit www.tutorialrank.com ACCT 312 Final Exam Answers 3. (TCO 5) Internal Control Procedures are required to...

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