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5 Cards in this Set
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1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
A. Bad Debts Expense ................ ................ $15,000 Allowances for Doubtful Accounts ................ ................ $15,000 B. Bad Debts Expense ................ ................ $12,000 Allowances for Doubtful Accounts ................ ................ $12,000 C. Bad Debts Expense ................ ................ $12,000 Accounts Receivable ................ ................ ................. $12,000 D. Bad Debts Expense ................ ................ $15,000 Accounts Receivable ................ ................ ................. $15,0 |
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4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that
A. must be generated internally B. are depletable natural resources C. do not have physical substance D. have been exchanged at a gain 5) The book value of an asset is equal to the A. asset’s market value less its historic cost B. blue book value relied on by secondary markets C. replacement cost of the asset D. asset’s cost less accumulated depreciation 6) Gains on an exchange of plant assets that has commercial substance are A. deducted from the cost of the new asset acquired B. deferred C. not possible D. recognized immediately 7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as A. capital expenditures B. expense expenditures C. improvements D. revenue expenditures 8) Costs incurred to increase the opera |
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D. $2,000
11) If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? A. $3,000,000 B. $90,000 C. $300,000 D. $210,000 12) Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2011. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2012 balance sheet? A. Long-term debt, $300,000. B. Long-term debt, $225,000. C. Long-term debt, $150,000; Long-term debt due within one year, $75,000. D. Long-term debt, $225,000; Long-term debt due within one year, $75,000. 13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond prem |
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15) If a corporation has only one class of stock, it is referred to as
A. classless stock B. preferred stock C. solitary stock D. common stock 16) Capital stock to which the charter has assigned a value per share is called A. par value stock B. no-par value stock C. stated value stock D. assigned value stock 17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock? A. $50 per share B. $5,000 in total C. $500 in total D. $.50 per share 18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends receive |
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19) When the selling price of treasury stock is greater than its cost, the company credits the difference to
A. Gain on Sale of Treasury Stock B. Paid-in Capital from Treasury Stock C. Paid-in Capital in Excess of Par Value D. Treasury Stock 20) The purchase of treasury stock A. decreases common stock authorized B. decreases common stock issued C. decreases common stock outstanding D. has no effect on common stock outstanding 21) Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses? A. $228,000 B. $232,000 C. $200,000 D. $280,000 22) Where would the event purchased land for cash appear, if at all, on the indirect statement of c |
