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18.2   Learning Objective 18-2 1) The entry to record MidIowa.net selling 800 shares of $6.00 par value common stock at $8.00 would be to: A) debit Cash $6,400; credit Common Stock $4,800; credit Paid-in Capital in Excess of Par Value-Common $1,600. B) debit Cash $4,800; credit Common Stock $4,800. C) debit Cash $6,400; debit.
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17.5   Learning Objective 17-5 1) When a partnership is terminated, the assets are turned into cash and obligations are paid. This process is called: A) dissolution. B) termination. C) realization. D) None of the above. 2) The first step take in liquidating a partnership is to: A) sell the assets. B) divide profits on assets with partners. C) pay.
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16.3   Learning Objective 16-3 1) Using MACRS rates for a 3, 5, 7, and 10-year property, what is the percentage for the depreciable rate? A) 200 percent B) 150 percent C) 125 percent D) 100 percent 2) According to the MACRS tax rate table, the following classes use straight-line depreciation: A) residential rental property. B) automobiles. C) railroad tracks. D).
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40) Calculate the ending inventory under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. April1 Beginning inventory20 units @ $30 11 Purchases70 units @ $32 21 Purchases50 units @ $35 Sales for April: 115 units a) ________ FIFO b) ________ LIFO c) ________ Weighted-average 41).
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31) The specific identification method is a compromise between LIFO and FIFO. 32) During a period of inflation, LIFO will produce the highest net income. 33) LIFO reflects most recent costs for inventory on the balance sheet. 34) FIFO provides an up-to-date ending inventory on the balance sheet because it uses the latest.
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    17.1   Learning Objective 17-1 1) Many associations such as medical centers and law firms could organize as a: A) sole proprietorship. B) corporation. C) partnership. D) All of the above. 2) The accounting procedures are the same for sole proprietorships as for partnerships with the exception of: A) the asset section includes more than one cash account. B).
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16.1   Learning Objective 16-1 1) Which of the following assets would not be classified as property, plant, and equipment? A) Delivery truck B) Copyright C) Land D) Furniture 2) The amount to include in the entry to record the cost of a property, plant, and equipment asset would include: A) acquisition cost. B) freight. C) installation. D) All of these.
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21) The Securities and Exchange Commission Act defines a partnership as "an association of two or more persons to carry on as co-owners of a business for profit." 22) A partnership is defined by the Uniform Partnership Act. 23) Unlimited liability means that the act of a single partner is binding on.
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17.4   Learning Objective 17-4 1) James wants to invest cash so that he will have a one-third interest in Thomas and Stanley's company. The capital balances are $2,000 Thomas, $6,000 Stanley. The admission of James would be to: A) debit Cash $2,666.67; credit James, Capital $2,666.67. B) debit Cash $5,333.33; credit James, Capital.
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Given the following accounts: [1] Cash [2]Accounts receivable [3]Allowance for doubtful accounts [4]Merchandise inventory [5]Store supplies [6]Store equipment [7]Accumulated depreciation [8]Notes payable [9]Accounts payable [10]Able Partner's Capital [11]Baker Partner's Capital [12]Able Partner's withdrawals [13]Baker Partner's withdrawals [14]Income summary [15]Service revenue [16]Gain on realization [17]Loss on realization Indicate the account(s) to be debited and credited to record the following transactions. 20) Able partner invested cash in the business. Debit ________ &.
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15.4   Learning Objective 15-4 1) A method that uses average gross profit rate and net sales to compute inventory is: A) the retail method. B) the LIFO. C) the weighted-average method. D) None of these answers are correct. 2) Chewy Candy has a beginning inventory of $1,000. June purchases were $3,000, and retail sales were $5,000..
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11) Which depreciation method uses the current book value in determining depreciation? A) Straight-line B) MACRS C) Units-of-production D) Double-declining balance 12) The cost of an asset less its accumulated depreciation is called: A) residual value. B) salvage value. C) market value. D) book value. 13) Josh Kindel purchased equipment for $60,000 on January 1. Its residual value is $4,000.
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21) Sterling Supply uses a periodic inventory system. Magnum sold 25 globes during March. Other data for March includes: Mar. 1 Balance 20 @ $12 11  Purchased 10 @ 11 25  Purchased 10 @ 10 Ending inventory under the weighted-average method is: A) $281.25. B) $155.00. C) $180.00. D) $168.75. 22) Sterling Supply uses a periodic inventory system. Magnum sold.
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11) When a partnership is liquidated, the assets are sold and the cash realized is applied first to the: A) claims of creditors. B) partner with the largest investment. C) partners' equity accounts. D) partners according to their ownership interests. 12) The last step in a partnership liquidation is to divide any remaining proceeds between.
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11) Authorized capital stock is: A) shares listed in the charter. B) shares issued to the corporation's officers. C) shares sold and in stockholder possession. D) shares that pay dividends. 12) Which of the following would normally not appear in the Stockholders' Equity section of the balance sheet? A) Cash B) Paid-in Capital C) Common Stock D) Preferred Stock 13).
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11) The Zonga Corporation Stockholders' Equity section includes the following: Preferred Stock $ 22,000 Common Stock 48,000 Paid-in Capital in Excess of Par-Preferred 2,980 Paid-in Capital in Excess of Par-Common 3,400 Retained Earnings 7,350 Total paid-in capital is: A) $83,730. B) $76,380. C) $70,000. D) $77,350. 12) The Collins Corporation Stockholders' Equity section includes the following: Preferred Stock $ 12,000 Common Stock 15,000 Paid-in Capital in Excess of Par-Preferred 2,700 Paid-in Capital in.
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16.6   Learning Objective 16-6 1) Amortization of a patent was ignored. This error would cause: A) the period's net income to be overstated. B) the period's net income to be understated. C) the period end assets to be understated. D) None of these are correct. 2) The credit portion of the adjustment for the depletion of.
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17.2   Learning Objective 17-2 1) Salary and interest allowances for partners are: A) expenses on the income statement. B) liabilities on the balance sheet. C) a means of dividing net income or loss between the partners. D) None of these answers are correct. 2) Which method of allocation of profits and losses is based on a.
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  18.1   Learning Objective 18-1 1) The articles of incorporation are: A) submitted by the incorporators to the IRS for approval. B) submitted by the incorporators to the Office of the Secretary of State for approval. C) submitted by the incorporators to Securities and Exchange Commission for approval. D) submitted by the incorporators to the Governor.
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15.2   Learning Objective 15-2 1) Tracking individual inventory items is tracked in the: A) accounts receivable ledger. B) inventory ledger. C) accounts payable ledger. D) purchases journal. 2) An entry to record the payment to a vendor was correctly recorded and posted to the general ledger but was not posted to the subsidiary ledger. This error.
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17.3   Learning Objective 17-3 1) Partners Brian, Josh, and Chad have capital balances of $7,000, $3,000, and $90,000, respectively. The losses for the year are $12,000. What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio? A) $600 credit balance B) $1,000 debit balance C) $2,400.
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11) The principle of consistency states that: A) changes in accounting methods should occur from one fiscal period to the next. B) a company cannot change from one inventory valuation method to another. C) a company should switch from LIFO to FIFO every other period. D) by using the same method, the financial statements.
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11) Allison and Josh are partners in a business. Allison's capital is $60,000 and Josh's capital is $100,000. Profits for the year are $80,000. They agree to share profits and losses as follows: Allison Josh Salaries $20,000 $40,000 Interest on capital 10% 10% Remaining profits and losses 3/5 2/5 Allison's share of the profits before paying salaries and interest on capital.
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31) The financial loss that each stockholder in a corporation can incur is limited to the amount invested by the stockholder. 32) A change in ownership terminates the corporation. 33) The stockholders of a corporation have mutual agency. 34) The Articles of Incorporation are submitted to the Secretary of State. 35) A stock certificate.
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16.4   Learning Objective 16-4 1) Capital expenditures would include: A) additions. B) betterments. C) extraordinary repairs. D) All of these answers are correct. 2) Revenue expenditures include: A) additions to existing plant assets. B) periodic normal maintenance costs. C) initial costs of acquiring plant assets. D) All of these answers are correct. 3) A company incorrectly records revenue expenditures as capital.
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21) Dividends in arrears occur when the company does not pay dividends to: A) cumulative preferred stockholders. B) non-cumulative preferred stockholders. C) participating preferred stockholders. D) non-participating common stockholders. 22) Par value is equal to: A) market value of the stock. B) the amount stated in the charter or legal capital. C) retained earnings. D) the initial price at.
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11) The write-off of intangible assets is called: A) depreciation. B) amortization. C) depletion. D) deterioration. 12) A coal mine was acquired for $2,000,000. No salvage value was expected and the number of tons of coal is estimated to be 2,000,000 tons. During for first year, 220,000 tons of coal was mined and sold. The.
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27) Nicki's Pet Supply needs to estimate its ending inventory. Using the data below, compute Nicki's estimated cost of ending inventory for the month of April. Beginning inventory April 1 $ 2,000 Purchases for April12,000 Retail sales during April13,000 Normal gross profit average40% 28) Assume that in Year 1, the ending merchandise inventory is overstated.
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11) Assets that are not expected to provide benefits for a number of accounting periods are called: A) current assets. B) fixed assets. C) long-term assets. D) property, plant, and equipment. 12) Tangible assets include: A) patents. B) cash. C) trademarks. D) copyrights. 13) Costs and assessments that should be charged to the land account include: A) streets. B) parks. C) flood prevention. D).
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31) R. Red formed a corporation with an authorization of 20,000 shares of $50 par, 6% non-cumulative preferred stock and 100,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations. Journalize the transactions omitting explanations. Jan10Issued 20,000 shares of common stock at.
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21) The retail inventory method can be used to estimate the amount of inventory destroyed by fire. 22) If a mistake is made in calculating ending inventory, it will take three accounting periods to be self-correcting. 23) The retail method is used by many merchandising businesses to estimate the amount of inventory. 24).
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16.2   Learning Objective 16-2 1) The cost of equipment is expensed: A) at the time it is paid. B) over the periods that benefit the company. C) in the period it is purchased. D) in the period it is sold. 2) In the last year of useful life, the salvage value was ignored using double-declining-balance depreciation..
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16.5   Learning Objective 16-5 1) When selling a plant asset, the gain was not recorded, but pocketed. This error would cause: A) the period's net income to be understated. B) the period's net income to be overstated. C) the period end assets to be overstated. D) None of these are correct. 2) When equipment that is.
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11) Myers Corporation exchanged an old machine costing $20,000, with an accumulated depreciation of $17,000, and trade-in value of $5,000 for a new machine cash price of $24,000. What is the journal entry? A) Debit Machinery $22,000; debit Accumulated Depreciation $17,000; credit Machinery $20,000; credit Cash $19,000 B) Debit Machinery $19,000; debit.
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