Strayer ACC 557 Final Exam Part 1&2 Answers


Strayer ACC 557 Final Exam Part 1&2 Answers

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ACC 557 FINAL PART 1 (Strayer)

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to
Township, Inc. has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014, and December 31, 2015. The board of directors declared and paid a $50,000 dividend in 2014. In 2015, $110,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2015?
Art, Inc., has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2015. There were no dividends declared in 2013. The board of directors declares and pays a $45,000 dividend in 2014 and in 2015. What is the amount of dividends received by the common stockholders in 2015?
The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is
The two ways that a corporation can be classified by ownership are
Brown Company has 1,000 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2015. No dividends have been paid on this stock for 2014 or 2015. Dividends in arrears at December 31, 2015 total
Which of the following statements regarding the date of a cash dividend declaration is not accurate?
Xeris, Inc. has 1,000 shares of 6%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2015. What is the annual dividend on the preferred stock?
Farmer Company reports the following amounts for 2015:Net income                                                                                $135,000Average stockholders’ equity                                                   500,000Preferred dividends                                                                       15,000Par value preferred stock                                                          100,000The 2015 rate of return on common stockholders’ equity is
10 A coal company invests $15 million in a mine estimated to have 20 million tons of coal and no salvage value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tons of coal are extracted and sold. What is the depletion expense for the first year?
11 Grimwood Trucking purchased a tractor trailer for $171,500. Interline uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. Salvage value is estimated to be $24,500. If the truck is driven 90,000 miles in its first year, how much depreciation expense should Grimwood record?
12 Intangible assets are the rights and privileges that result from ownership of long-lived assets that
13  Yocum Company purchased equipment on January 1 at a list price of $120,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yocum was given a $2,400 cash discount. Yocum paid $6,000 sales tax on the equipment, and paid installation charges of $1,760. Prior to installation, Yocum paid $4,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment?
14  Mehring Company reported net sales of $540,000, net income of $72,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company's asset turnover?
15  Powell’s Courier Service recorded a loss of $9,000 when it sold a van that originally cost $84,000 for $15,000. Accumulated depreciation on the van must have been
16  The book value of a plant asset is the difference between the
17  Goodwill can be recorded
18  A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment, indicate the effect on the portion allocated to interest expense and the portion allocated to principal.
19  Interest expense on an interest-bearing note is
20  On January 1, 2015, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015, is
21  On the date of issue, Chudzick Corporation sells $5 million of 5-year bonds at 97. The entry to record the sale will include the following debits and credits: 
22  The times interest earned is computed by dividing
23  Reliable Insurance Company collected a premium of $36,000 for a 1-year insurance policy on May 1. What amount should Reliable report as a current liability for Unearned Insurance Revene at December 31?
24  The statement that "Bond prices vary inversely with changes in the market interest rate" means that if the

 A major disadvantage resulting from the use of bonds is that

ACC 557 FINAL PART 2 (Strayer)

The following data are available for Two-off Company.

Increase in accounts payable                            $120,000Increase in bonds payable                                  300,000Sale of investments                                           150,000Issuance of common stock                                 160,000Payment of cash dividends                                   90,000 Net cash provided by financing activities is:

A company had net income of $210,000. Depreciation expense is $27,000. During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively. Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively. There was also a loss on the sale of equipment of $2,000. How much cash was provided by operating activities?
Jean’s Vegetable Market had the following transactions during 2014:1. Issued $50,000 of par value common stock for cash.2. Repaid a 6 year note payable in the amount of $22,000. 3. Acquired land by issuing common stock of par value $100,000.4. Declared and paid a cash dividend of $2,000. 5. Sold a long-term investment (cost $3,000) for cash of $8,000. 6. Acquired an investment in IBM stock for cash of $15,000. What is the net cash provided (used) by investing activities?
The primary purpose of the statement of cash flows is to
Which of the following transactions does notaffect cash during a period?
Which of the following would be added to net income using the indirect method?
In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as a(n)
If $250,000 of bonds are issued during the year but $130,000 of old bonds are retired during the year, the statement of cash flows will show a(n)
Comanic Corp. has common stock of $5,400,000, retained earnings of $2,000,000, unrealized gains on trading securities of $100,000 and unrealized losses on available-for-sale securities of $200,000.  What is the total amount of its stockholders’ equity?
Blaine Company had these transactions pertaining to stock investments:Feb. 1  Purchased 2,000 shares of Norton Company (10%) for $51,000.June 1  Received cash dividends of $2 per share on Horton stock.Oct. 1  Sold 1,200 shares of Horton stock for $32,400.The entry to record the sale of the stock would include a
10 Changes from cost are reported as part of net income for
11 The cost method of accounting for long-term investments in stock should be employed when the
12 A typical investment to house excess cash until needed is
13 On January 1, 2014, Lark Corporation purchased 35% of the common stock outstanding of Dinc Corporation for $700,000. During 2014, Dinc Corporation reported net income of $200,000 and paid cash dividends of $100,000. The balance of the Stock Investments—Dinc account on the books of Lark Corporation at December 31, 2014 is
14 Ban Co. purchased 50, 5% Waylan Company bonds for $50,000 cash plus brokerage fees of $500. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a
15 Viejo Inc. earns $600,000 and pays cash dividends of $150,000 during 2014. Cruz Corporation owns 73,500 of the 210,000 outstanding shares of Viejo.What amount should Cruz show in the investment account at December 31, 2014 if the beginning of the year balance in the account was $40,000?
16 Assume the following sales data for a company:2016                               $1,050,0002015                                    950,0002014                                    800,0002013                                    650,000If 2013 is the base year, what is the percentage increase in sales from 2013 to 2015?
17 The ratio that uses weighted average common shares outstanding in the denominator is the
18 Short-term creditors are usually most interested in evaluating
19 The following information is available for Oakland Company:                                                            2015                     2014     Accounts receivable                $   430,000           $   460,000Inventory                                      280,000                320,000Net credit sales                         2,670,000             1,600,000Cost of goods sold                    1,860,000             1,060,000Net income                                   300,000                170,000 The accounts receivable turnover ratio for 2015 is
20 Vertical analysis is a technique which expresses each item within a financial statement
21 If a company has an acid-test ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio?
22 Quasar Corporation had net income of $300,000 and paid dividends to common stockholders of $40,000 in 2015. The weighted average number of shares outstanding in 2015 was 60,000 shares. Quasar Corporation's common stock is selling for $35 per share on the New York Stock Exchange.
23 Which one of the following would notbe considered a liquidity ratio?

Each of the following is a liquidity ratio except the