'Quiz Questions for Chapter 9\r'

'Quiz Questions for Chapter 9 1. A truck was purchased for $25,000. It has a six- social class manners and a $4,000 ease entertain. Using straight-line derogation, what is the summation’s carrying apprise ( allow value) later on 2 1/2 long time? a. $8,750. b. $12,250. c. $14,583. d. $16,250. 2. On January 1, cc3, Superior Landscaping union remunerative $17,000 to buy a stump grinder. If Superior uses the grinder to transfer 2,500 stumps per year, it would present an estimated useful life of 10 years and a deliver value of $4,500. The add of dispraise expenditure for the year 2003, using units-of-production wear and tear and assume that 3,500 stumps were removed, is a. 2,380. b. $1,750. c. $1,700. d. $1,250. 3. The sale for $2,000 of equipment that cost $8,000 and has accumulated depreciation of $6,700 would exit in a a. gain of $2,000. b. gain of $700. c. discharge of $700. d. loss of $1,300. 4. Underestimating the number of tons of a mineral that base b e mined over a mineral deposit’s life depart result in a. over say dough income individually year. b. over express tot up summations all(prenominal) year. c. over state depletion outgo each year. d. no set up on join pluss each year. 5. A copyright is obtained for what becomes a very(prenominal) successful book.The publisher expects the book to gene identify gross revenue for 10 years. The copyright should be amortized over a. 2 to 4 years. b. 10 years. c. 40 years. d. the author’s life plus 50 years. The hobby instruction pertains to the undermentioned two questions. Z caller purchased an plus for $24,000 on January 1, 2004. The plus was expected to gestate a quaternity-year life and a $4,000 rescue value. 6. The meat of depreciation write off for 2006 using double-declining-balance would be a. $2,000. b. $3,000. c. $6,000. d. $12,000. 7. Assume that Z Company uses straight-line depreciation.If on January 1, 2007, Z Company make dos the asset fo r $10,000, the report of change flows would report a a. $1,000 hard money inflow from gain on the sale of the asset in the direct activities section. b. $10,000 capital inflow from an asset disposal in the investiture activities section. c. $9,000 capital inflow from an asset disposal in the backing activities section. d. a and c. 8. On January 1, 2006, Fulsom corp purchased a machine for $50,000. Fulsom paid shipping write offs of $500 as well as installation costs of $1,200. Fulsom estimated the machine would have a useful life of ten years and an estimated salvage value of $3,000.If Fulsom records depreciation using the straight-line method, depreciation expense for 2007 is. a. $4,870. b. $5,170. c. $5,270. d. $5,570. 9. Hickory Ridge Company purchased subvert and a building for $920,000. The individual assets were appraised at the adjacent trade values: Land $614,400 Building $345,600 Recording the land in the nebing records would a. change magnitude land by $58 8,800. b. increase land by $614,400. c. increase assets by $920,000. d. Both a and c. 10 Penny avenue and Associates purchased a generator on January 1, 2006, for $6,300. The generator was estimated to have a five-year life and a salvage value of $600.At the beginning of 2008, the caller-up revised the expected life of the asset to six years and revised the salvage value to $300. Using straight-line depreciation, the depreciation expense save in 2008 would a. slack assets and impartiality by $1,140. b. reduce assets and equity by $930. c. light assets and equity by $1,005. d. decrease assets and equity by $1,500. 11 Which of the side by side(p) teachings about good exit is true? a. The bar of goodwill is measured by subtracting the amount paid for assets from their bonny foodstuff value on the purchase date. b. The amount of goodwill is recorded as an asset. . Recording scathe of goodwill reduces the amount of net income. d. All of the above. 12 XYZ Company paid curr ency for a upper-case letter expenditure that improved the operating efficiency of one and only(a) of its assets. Which of the pursual reflects how this expenditure affects the conjunction’s pecuniary avowals? a. b. c. d. 13 Assets = +- +- †n/a Liab. n/a n/a n/a n/a + Equity n/a n/a †n/a Rev. †n/a n/a n/a n/a Exp. n/a n/a + n/a = dismiss Inc. n/a n/a †n/a currency accrue †IA n/a †OA n/a KLM Company experienced an rateing event that abnormal its financial directions as indicated below: Assets = †Liab. n/a Equity †Rev. †n/a Exp. + = Net Inc. †Which of the following events could have caused these effects? a. recognizing depreciation. b. paying cash for a great(p) expenditure. c. amortizing a patent. d. no(prenominal) of the above. change ladder †OA 14. Which of the following correctly matches the type of long-term asset with the term used to identify how that asset’s cost is expensed? Building Oil Rese rve secure a. Amortization wear and tear Depletion b. Depletion Amortization Depletion c. Amortization Depletion Depreciation d. Depreciation Depletion Amortization 15. Which of the following is true? . The book value of an asset is its estimated food market value. b. The primary adjudicate of recording depreciation expense on the income statement is to reduce income tax expense. c. Recording depreciation expense decreases the book value of the asset in the year it was used to produce revenue. d. The accumulated deprecation for an asset provides the cash needed to replace the asset at the end of its useful life. Quiz Questions for Chapter 10 The following information pertains to the next seven questions. On January 1, 2003, XYZ mickle outgrowthd a $5,000 confront value chemical adhesion that interchange for 90.The sting had a five-year term and paid 10 percent yearly participation. The company used the takings from the cleave issue to buy land. The land was lease for $600 of cash revenue per year and was sold at the end of the 5th year for $4,200 cash. 1. The carrying value of the affixation liability on January 1, 2003, would be a. $4,600. b. $4,500. c. $5,000. d. $4,000. 2. The amount of evoke expense reported on the 2003 income statement would be a. $450. b. $400. c. $500. d. $600. 3. Interest expense reported on the income statement over the life of the cohere would a. ncrease by $century each year. b. decrease by $100 each year. c. be the same each year. d. fit the stated account of stake. 4. The carrying value of the bond liability on declination 31, 2007 would be a. $4,500. b. $5,000. c. $4,900. d. $4,600. 5. The sale of the land on December 31, 2007, would a. increase retained earnings by $300. b. increase equity by $4,200. c. reduce net income by $300. d. have no effect on retained earnings. 6. The total amount of liability associated with the bond issue would a. increase each year as a result of the amortization of the discount . b. ecrease each year as a result of the amortization of the discount. c. persist in the same each year. d. always be equal to the face value of the bond payable. 7. The amount of the cash outflow for please expense in 2005 would be a. $600. b. $400. c. $500. d. $ 0. occasion the following information to answer the next three questions. On January 1, 2003 , Keynes Company issued a $20,000 face value bond that sold for 110. The bond had a ten-year term and a stated annual refer ramble of 8 percent . 8. The carrying value of the bond liability on January 1, 2003, would be a. $20,000. . $22,000. c. $21,800. d. $20,200. 9. The amount of kindle expense reported on the company’s 2003 income statement would be a. $1,200. b. $1,400. c. $1,600. d. $1,050. 10. The amount of bear on expense reported on the company’s 2004 income statement would be a. $1,400. b. $1,600. c. $1,800. d. $2,000. 11. If a bond sells at a discount, which of the following is true? a. The market c ome to judge at the time of issue is greater than the stated interest charge per unit on the bond. b. The market interest rate at the time of issue is slight than the stated interest rate on the bond. c.The market interest rate at the time of issue is the same as the stated interest rate on the bond issue. d. The market interest rate is expected to increase above the stated interest rate on the bond. 12. On January 1, 2003, Ink, Inc. borrowed $100,000 cash from the faithfulness Bank on a note that had a 6 percent annual interest rate and a five-year term. The loan is to be repaid in annual payments of $23,741. 69 on January 1 each year. The amount of the January 1, 2004, payment applied to interest and to principal would be a. $6,000 / $94,000. b. $17,741. 69 / $94,000. c. $4,935. 0 / $82,258. 31. d. $6,000 / $17,741. 69. 13. Indigo Company can borrow up to $50,000 on its line of quote at the state bank. The company agrees to pay interest monthly at 2 percent above prime. Funds are borrowed or repaid on the showtime day of each month. Month Jan. Feb. March Amounts Borrowed or (Repaid) $15,000 $ (5,000) $30,000 Prime Rate 6 percent 5 percent 4 percent The amount of interest to be accrued on the March 31 is a. $225. 00. b. $100. 00. c. $133. 33. d. $200. 00. 14. XYZ Company experienced an accounting event that modify its financial statements as indicated below: Assets = Liab. + + Equity n/a Rev. †n/a Exp. n/a = Net Inc. n/a coin ascend + FA Which of the following events could have caused these effects? a. A bond issued at face value. b. A bond issued at a discount. c. A bond issued at a premium. d. All of the above. 15. A bond will sell at a premium if: a. The market rate of interest is equal to the bond’s stated rate. b. The market rate of interest is greater than the bond’s stated rate. c. The market rate of interest is less than the bond’s stated rate. d. The bond is convertible into cat valium derivation. Quiz Questions fo r Chapter 11 1.The ZZ Corporation had the following shares of stock majuscule at December 31, 2003: Common Stock, $50 par value, 40,000 shares outstanding; and favored Stock, 6 percent, $100 par value, cumulative, 10,000 shares outstanding. Dividends for 2001 and 2002 were in arrears. On December 31, 2003, ZZ declared total cash dividends of $250,000. The total amounts payable to favored stockholders and common stockholders, respectively, are: a. $60,000 / $190,000. b. $120,000 / $130,000. c. $125,000 / $125,000. d. $180,000 / $70,000. Use the following information to answer the next four questions.The Kramer Company was started when it issued 200 shares of $5 par value common stock at a market price of $20 per share. The company repurchased 10 shares at a market price of $15 per share. subsequently the company reissued 5 shares at a market price of $20 per share. At the end of the number one year of operations the company’s equity included $1,200 of retained earnings in auxiliary to its contributed capital. 2. The entry to record the original issue of 200 shares of stock would a. increase cash by $4,000 / increase common stock by $4,000. b. ncrease cash by $4,000 / increase common stock and paid-in capital in excess of par value by $1,000 and $3,000, respectively. c. decrease cash by $4,000 / increase common stock common stock by $4,000. d. increase cash by $1,000 / increase common stock by $1,000. 3. The entry to record the purchase of the 10 shares of the company’s experience stock would a. decrease assets / decrease equity. b. decrease assets / increase equity. c. decrease assets / increase treasury stock. d. both a and c. 4. What effect would reissuing the 5 shares have on the company’s paid-in capital from treasury stock transactions account? . No effect. b. outgrowth redundant paid-in capital by $100. c. Increase additional paid-in capital by $25. d. mitigate additional paid-in capital by $75. 5. The total amount of stoc kholders’ equity at the end of the first year would be a. $5,150. b. $5,200. c. $1,200. d. none of the above. 6. Which of the following is an advantage of the corporate form of channel organization? a. double taxation. b. amount of regulation. c. limited liability. d. fix management. 7. Jan Irving started a proprietorship on January 1, 2007 with a $1,000 cash contribution to the business.During the first year of operations the company generated $5,000 of cash revenue and incurred $2,000 of cash expenses. Also, Jan withdrew $500 from the business. At the end of 2007 the balance in the Jan Irving, Capital account was a. $1,000. b. $3,000. c. $3,500. d. $4,000. 8. ABC Company is authorized to issue 100,000 shares of common stock. The company issued 60,000 shares of common stock and later repurchased 15,000 shares of its own common stock. How many shares are outstanding? a. 60,000. b. 45,000. c. 100,000. d. 40,000. 9.An 8 percent stock dividend on 12,000 shares of outstanding prefer stock with a par value of $20 per share and a market value of $60 a share will have what effect on the accounting equation? a. Increase preferred stock by $57,600. b. Increase cash by $38,400. c. Decrease retained earnings by $19,200. d. Decrease retained earnings by $57,600. 10. Which of the following statements concerning a two-for-one stock split is true? a. The number of shares outstanding will decrease. b. The market price of the stock would be expected to increase. c. The company’s equity will increase. d. No journal entry would be necessary. 1. EFG Company paid cash to purchase treasury stock. Which of the following reflects how this event affects the company’s financial statements? a. b. c. d. 12. Assets †+- †+- = Liab. n/a n/a n/a n/a + Equity †n/a †n/a Rev. †n/a n/a n/a n/a Exp. n/a n/a + + = Net Inc. n/a n/a ††Cash Flow †FA †OA †FA †OA ZGAR Company distributed a stock dividend. Which of the follow ing reflects how this event affects the company’s financial statements? a. b. c. d. Assets †n/a †n/a = Liab. n/a n/a n/a n/a + Equity †+- †+- Rev. †n/a n/a n/a n/a Exp. n/a n/a + n/a = Net Inc. n/a n/a †n/a Cash Flow n/a n/a †FA †FAQuiz for Chapter 12 1. Which of the following cash transactions is classified as an investing operation on the statement of cash flows? a. Cash borrowed. b. Cash received from issuing stock. c. Cash received from revenue. d. Cash collected on a loan. 2. A building costing $55,000 with $16,500 of accumulated depreciation was sold for $40,000. How would the cash flow from the sale pop out on the statement of cash flows? a. $1,500 in operating activities and $38,500 in investing activities. b. $40,000 in finance activities. c. $38,500 noncash financing and investing activities and $1,500 in operating activities. . $40,000 in investing activities. 3. The owners of X Company invested $2,000 in the company. X C ompany used the cash to invest in Y Company. On X’s statement of cash flows these transactions would be classified, respectively, as a. an investing activity and an investing activity. b. a financing activity and a financing activity. c. an investing activity and a financing activity. d. a financing activity and an investing activity. 4. consequence a note for the purchase of land is an use of a. an investing activity. b. a financing activity. c. a noncash investing and financing activity. d. transaction that would not appear on the statement of cash flows. 5. The sum of the three study components (operating activities, investing activities, and financing activities) on a statement of cash flows will add up to a. the last cash balance. b. the change in the cash account balance between the beginning and ending of the period. c. the amount of cash inflow for the period. d. net income for the period. Answers: Chapter 9: D, B, B, C, B, A, B, A, D, B, D, A, D, D, C Chapter 10: B, D, C, B, C, A, C, B, B, A, A, D, D, D, C Chapter 11: D, B, D, C, A, C, C, B, D, D, A, B Chapter 12: D, D, D, C, B\r\n'