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DeVry ACCT 504 Week 4 Midterm Exam Latest

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DeVry ACCT 504 Week 4 Midterm Exam Latest

DeVry ACCT 504 Week 4 Midterm Exam Latest

ACCT504

DeVry ACCT 504 Week 4 Midterm Exam Latest

DeVry ACCT 504 Week 4 Midterm Exam Latest

Question 1. Question: (TCO A) Which of the following accounts is recorded as part of stockholders’ equity on the Balance Sheet?

  • Long-term debt
  • Retained earnings
  • Revenue
  • Expenses

Question 2. Question: (TCO B) For 2014, LBJ Corporation reported net income of $37,500; net sales $562,500; and weighted average shares outstanding of 7,500. There were no preferred dividends. What was the 2014 earnings per share?

  • $75.00
  • $50.00
  • $15.00
  • $5.00

Question 3. Question: (TCO C) Purchasing inventory is an example of a(n)

  • operating activity.
  • investing activity.
  • financing activity.
  • noncash investing and financing activity.

Question 4. Question: (TCO D) What is the correct order to create the financial statements?

Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Cash flows.

Statement of Cash flows, Balance Sheet, Statement of Retained Earnings, and Income Statement.

Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash flows.

Income Statement, Balance Sheet, Statement of Retained Earnings, and Statement of Cash flows.

Question 5. Question: (TCO E) Which of the following describes the normal balance and classification of the Dividends account?

  • Credit, expense
  • Debit, stockholders’ equity
  • Debit, expense
  • Credit, stockholders’ equity

Question 6. Question: (TCO F) Which of the following statements is correct?

Accrual accounting records revenue when earned.

Cash-basis accounting records revenue when earned.

Accrual accounting records revenue when the payment is received in cash.

Cash-basis accounting records expenses when incurred.

Question 7. Question: (TCO A) LBJ Company recorded the following events involving a recent purchase of merchandise.

– Received goods for $200,000, terms 2/10, n/30.

– Returned $5,000 of the shipment for a credit due to damaged goods.

– Paid $2,500 for freight in.

– Paid the invoice within the discount period.

As a result of these events, the company’s merchandise inventory

  • increased by $193,600.
  • increased by $195,950.
  • increased by $197,500.
  • increased by $193,500.

Question 8. Question: (TCO B) In periods of rising prices, which of the following inventory methods results in the lowest income taxes?

  • Average cost method
  • FIFO
  • LIFO
  • Cannot be determined based on the information given

Question 9. Question: (TCO A) Which of the following is not a current liability?

  • Unearned revenue
  • Accounts payable
  • Accrued liabilities
  • Prepaid expenses

Question 10. Question:        (TCO E) Which of the following is an objective of internal control?

  • Risk assessment
  • Information technology
  • Adequate records
  • Comply with legal requirements

Question 11. Question:        (TCOs A and E) Your friend, Ellen, has hired you to evaluate the following internal control procedures.

Explain to your friend whether each of the numbered items below is an internal control strength or weakness. You must also state which internal control procedure relates to each of the internal controls.

For the weaknesses, you also need to state a recommendation for improvement.

(1) The cashier counts the total receipts and reconciles the receipts with the cash register total.

(2) Electronic documents are password-protected.

(3) The accountant is completely independent of the sales department.

(4) Invoices are not numbered.

(5) Large purchase orders must be approved by a manager.

Question 12. Question:        (TCOs B and D) Please prepare the following journal entries. Indicate which account should be debited and which account should be credited, along with the dollar amount of the debit and credit.

(1) Investors invest $300,000 in exchange for 30,000 shares of common stock.

(2) Company made payment on account for $500.

(3) Employees work Monday through Friday and are paid on Friday. Salary expense is $20,000 per day, and December 31 falls on a Tuesday.

(4) Company purchased Supplies for $2,000.

(5) The company needs to record Supplies used for $500.

Question 13. Question:        (TCOs B and D) The following items are taken from the financial statements of Butler Company for 2012:

Accounts Receivable $20,000
Cost of Goods Sold 95,000
Utilities Expense 3,500
Accounts Payable 7,000
Common Stock 100,000
Rent Expense 5,500
Advertising Expense 9,000
Dividends 10,000
Insurance Expense 2,000
Note Payable (due 2014) 50,000
Depreciation Expense 10,000
Prepaid Insurance 18,000
Accumulated Depreciation 30,000
Retained Earnings (beginning) 33,000
Salaries Expense 40,000
Salaries Payable 4,500
Net sales 170,000
Supplies 3,000
Supplies Expense 2,500

Instructions

(a) Calculate the net income. (18 points)

(b) Calculate the balance of Retained Earnings that would appear on a Balance Sheet at December 31, 2012. (7 points)

(c) Calculate the gross profit percentage.  (5 points)

Question 14. Question:        (TCO D) The following items are taken from the financial statements of BGS Company for 2012:

Cash $500,000
Accounts Receivable 200,000
Supplies 70,000
Accounts Payable 147,300
Unearned Service Revenue 18,000
Equipment, net of accumulated depreciation 212,000
Common Stock 500,000
Retained Earnings 12/31/2011 78,300
Long-term debt 142,400
Service revenue 240,000
Cost of Goods Sold 72,000
Rent expense 36,000
Supplies expense 12,000
Insurance expense 24,000

Instructions

(a) Please create a classified balance sheet in good form for the year ended 2012. (25 points)

(b) Please calculate the current ratio. (5 points)

DeVry ACCT 504 Week 4 Midterm Exam Latest

DeVry ACCT 504 Week 4 Midterm Exam Latest

 

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