Reference no: EM131764783
Accounting Exam -
Q1. Warner Company sold $4,000,000 of 6%, 10-year bonds on January 1st, 2013, for $3,454,800. The market interest rate is 8%, and interest will be paid each January 1st. The effective-interest method of amortization is used. The journal entry to accrue interest expense on December 31, 2013 will include a
a) debit to Premium on Bonds Payable for $112,712
b) credit to Discounts on Bonds Payable for $112, 712
c) credit to Discount on Bonds Payable for $36,384
d) debit to Premium on Bonds Payable for $36,38
Q2. Thayer Company purchased a building on January 2 by signing a long-term $2,520,000 mortgage with monthly payments of $23,100. The mortgage carries an annual interest rate of 10%. The amount owed on the mortgage after the first payment will be
a) $2,520,000
b) $2,517,900
c) $2,499,000
d) $2,496,900
Q3. Dawson Company issued 600 shares of $2 par value common stock for $5,400. Which of the following journal entries would be made to record this sale of stock?
a) Cash 5,400
Common Stock 5,400
b) Cash 5,400
Common Stock 1,200
Additional Paid in Capital 4,200
c) Common Stock 5,400
Additional Paid in Capital 1,200
Cash 4,200
d) Common Stock 5,400
Cash 5,400
Q4. The following data is available for BOX Corporation at December 31, 2014:
Common Stock, par $10 (authorized 30,000 shares) $250,000
Treasury stock, (80 shares) $ 1,200
Based on the data, how many shares of common stock are outstanding?
a) 30,000
b) 25,000
c) 29,920
d) 24,920
Q5. Blanchard Enterprises borrows $160,000 from a bank on January 1, 2013 and will repay this loan by making semiannual payments of $16,073.93. The annual interest rate charged for this 6-year loan is 6%. Which is the correct journal entry to record the first semiannual payment made on June 30, 2013?
a) Interest Expense $16,073.93
Cash 16,073.93
b) Note Payable 16, 073.93
Cash 16,073.93
c) Interest Expense 4,800.00
Note Payable 11,273.93
Cash 16,073.93
d) Interest Expense 964.43
Cash 964.93
Q6. Accounts Receivable for Wrenn, Inc. was $80,000 at the beginning of the year, and $70,000 at the end of the year. Sales on account for year totaled $512,000. Assuming there were no write-off of uncollectible accounts, the amount of cash collected through Accounts Receivable this year is:
a) $512,000
b) $522,000
c) $502,000
d) $10,000
Q7. Columbia Footwear had accounts Payable of $21,000 at the beginning of the year and $23,000 at the end of the year. During the year Columbia made purchases of inventory on account of $318,000. What is the amount of cash paid to supplies?
a) $313,000
b) $316,000
c) $311,000
d) $2,000
Q8. Zoum Corporation had the following transactions during 2014:
Issued $125,000 of par value common stock for cash
Recorded and paid wages expense of $60,000
Purchased land for $50,000 cash
Declared and paid a cash dividend of $10,000
Recorded cash sales of $400,000
Bought inventory for cash of $160,000
Paid interest expense of $1,000
Purchased treasury stock for $70,000
Repaid a long-term note payable in the amount of $30,000
What is the net cash provided by operating activities?
a) $180,000
b) $179,000
c) $160,000
d) $176,000
Q9. Paupet & Co. has the following cash flow information:
Payment of Operating Expenses $78,000
Payment of Dividends 2,000
Repayment of Long Term Note Payable 5,000
Payment of Maintenance Expense 15,000
Purchase of Delivery Vehicle 25,000
Purchase of Treasury Stock 10,000
Sale of Preferred Stock 60,000
Receipt of Interest Income 10,000
Cash sales 100,000
What is the net cash flow from Financing Activities?
a) $2,000
b) $7,000
c) $60,000
d) $17,000
e) $43,000
Q10. Moses & Apple, Inc. has the following cash flow information:
Payment of Operating Expenses $48,000
Payment of Dividends 2,000
Repayment of Long Term Note Payable 5,000
Payment of Maintenance Expense 15,000
Purchase of Delivery Vehicle 25,000
??? of Delivery Vehicle 10,000
??? of Preferred Stock 60,000
????? of Interest Income 10,000
Cash Sales 100,000
What is the net cash flow from Investing Activities [parenthesis indicates negative number]?
a) ($25,000)
b) ($15,000)
c) $15,000
d) $10,000
e) ($5,000)
Q11. Parks Blair invested $5,000 at 8% annual interest and left the money invested without withdrawing any of the interest for 15 years. At the end of the 15 years, Parks decided to withdraw the accumulated amount of money. To the closest dollar, which amount would he withdraw, assuming that the investment earns interest compounded annually?
a) $42,797
b) $75,000
c) $1,576
d) $15,861
Q12. If $22,000 a deposited in a saving account at the end of each year and the account pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years?
a) $23,000
b) $231,000
c) $276,714
d) $303,600
Q13. If the single amount of $5,000 is to be received in 3 years and discounted at 6%, its present value is
a) $4,198.10
b) $4,717.30
c) $4,450.00
d) $4,395.45
Q14. If a bond has a stated rate of interest of 6% but the market rate of interest is 8% the bond
a) will sell at a discount (less than face value)
b) will sell at a premium (more than face value)
c) many sell at either a premium or a discount
d) will sell at its face value
Q15. Valente Company is about to issue $3,000,000 of 5-year, 10% bonds. Interest will be paid semi-annually. The market interest rate for such securities is 8%. How much can Valente expect to receive from the sale of these bonds?
a) $2,768,338
b) $3,000,000
c) $3,243,315
d) $3,231,660
Q16. Collins Products, Inc. is about to issue a 10%, 10-year, $100,000 Bond Payable when the market interest rate is 12%. Interest will be paid semi-annually. How much can Collins expect to receive from the sale of these bonds?
a) $97,795
b) $100,000
c) $112,462
d) $88,530