A200 Exam 2 Ch 6 7 8 Version A 100 Points possible Student name Last 4 digits of ID number Section number Instructor s name FILL OUT THE ENTIRE HEADING ON THIS EXAM FILL OUT YOUR SCAN FORM AS YOUR INSTRUCTOR INDICATES MARK ON YOUR SCAN FORM THE BEST ANSWER TO EACH QUESTION ONLY THE ANSWERS YOU MARK ON YOUR SCAN FORM WILL BE GRADED 1 Kauffman Corporation s 12 31 09 balance sheet reports 100 000 shares of 30 par value common stock outstanding What is the meaning of par value a the current market price per share of Kauffman s common stock b the legal value per share of Kauffman s common stock c the market price per share of Kauffman s common stock when the company was founded d the minimum price per share that Kauffman s common stock will sell for 2 On the balance sheet total stockholders equity a includes long term liabilities and capital stock b includes retained earnings plus paid in capital c is equal to total assets d is usually equal to cash e both a and b 3 A gain on the sale of a fixed asset will a b c d increase assets and liabilities increase equity but decrease assets decrease liabilities and increase assets increase assets and equity Exam2A Fall09 Pg 2 of 12 4 At the end of the first year of business Stanga Company aged its accounts receivable as follows Age Interval Not past due 1 30 days past due Balance Percent Uncollectible 310 000 3 9300 255 000 8 20400 31 60 days past due 84 000 12 10080 60 90 days past due 47 000 23 10810 91 180 days past due 21 000 56 11760 over 180 days past due Total accounts receivable 8 000 82 6560 725 000 How will Stanga record the year s provision for doubtful accounts a increase uncollectible accounts expense by 68 910 and decrease accounts receivable by 68 910 b increase uncollectible accounts expense by 68 910 and increase allowance for doubtful accounts by 68 910 c increase uncollectible accounts expense by 656 090 and increase allowance for doubtful accounts by 656 090 d increase uncollectible accounts expense by 656 090 and decrease accounts receivable by 656 090 5 In a period of rising prices which of the following inventory cost flow assumptions assigns the most recent costs to cost of ending inventory COEI on the balance sheet a lifo last in firstout c fifo first in firstout b average cost d filo first in lastout 6 Mark Company s equipment account shows a cost of 1 125 000 The book value of the equipment to date is 673 500 and annual depreciation expense using the straight line method is 71 200 What is Mark s accumulated depreciation on the equipment a 451 500 c 380 300 b 1 053 800 d 522 700 Exam2A Fall09 Pg 3 of 12 The following information applies to questions 7 9 Selected account balances from Hughes Corporation s 12 31 09 balance sheet are Common stock 30 par 75 000 shares authorized 20 000 shares issued and shares outstanding 600 000 Paid in capital in excess of par common 85 000 Preferred 8 stock 25 par 60 000 shares authorized issued and outstanding 1 500 000 Paid in capital in excess of par preferred 200 000 Retained earnings 390 000 Treasury stock common 9 500 shares 142 500 7 What is Hughes Corporation s 12 31 09 total stockholders equity a 2 775 000 c 2 917 500 b 2 632 500 d 2 527 500 8 During the year Hughes Corporation repurchased stock at what cost per share a 15 per share c 25 per share b 30 per share d 8 per share 9 How many shares of Hughes Corporation s common stock are outstanding a 55 000 shares c 65 500 shares b 35 000 shares d 10 500 shares 10 Generally accepted accounting principles GAAP says that businesses should record contingent liabilities on the balance sheet when the event causing the liability is and the amount owed is a probable estimable c current estimable b probable un d long term known known 11 On March 1 Aster Corporation issued 22 000 000 of 30 year 8 bonds at par in exchange for cash with interest payable semi annually How will the March 1 transaction affect Aster s accounts a increase cash 23 760 000 increase bonds payable 22 000 000 and increase bond interest expense 1 760 000 b increase cash 23 760 000 and increase bonds payable 23 760 000 c increase cash 22 000 000 and increase bond interest expense 22 000 000 d increase cash 22 000 000 and increase bonds payable 22 000 000 Exam2A Fall09 Pg 4 of 12 12 On 2 01 09 Sloe Company purchased a building During 2009 Sloe made the following related expenditures Window washing 650 New security system 8 200 Repaired broken floor tiles 3 600 Office cleaning 4 500 What is Sloe s total revenue expenditure related to the building a 16 950 c 8 200 b 8 750 d 5 150 13 On January 1 2009 Lisle Company acquired a piece of equipment at a cost of 325 000 It estimates a 12 year useful life and a 19 000 residual value What will be Lisle s depreciation expense in 2011 year 3 if Lisle depreciates the asset using the straight line method a 25 500 c 81 250 b 76 500 d 27 083 14 On January 1 2009 Dent Company purchased equipment for 211 500 It has a useful life of 18 years and a residual value of 9 000 Using the declining balance method DDB what depreciation expense will Dent record for 2009 year one a 8 991 c 11 250 b 23 500 d 22 500 Exam2A Fall09 Pg 5 of 12 The following information applies to questions 15 and 16 Anderson Corporation s first year of operations was 2009 The corporation s 12 31 09 balance sheet reported assets as follows Accounts receivable 187 600 Accumulated depreciation 23 500 Allowance for doubtful accounts 13 300 Cash and cash equivalents 42 500 Interest receivable 18 650 Merchandise inventory FIFO cost 98 500 Notes receivable due 9 15 10 50 000 Property Plant and Equipment 314 000 Wages payable 52 000 15 What is the total of Anderson Corporation s net current assets a 410 550 c 383 950 b 333 950 d 360 000 16 What is the total of Anderson Corporation s net long term fixed assets a 337 500 c 364 000 b 290 500 d 387 500 17 17 Krill Company shows a 282 000 60 day note receivable on its balance sheet On the maturity date the related interest totals 3 760 What is the rate of interest on the note a 6 0 c 8 0 b 7 0 d 1 33 18 On 7 01 09 Wasser Corporation received from a customer a 135 000 7 120 day note issued on account How will Wasser record this transaction a increase notes receivable 135 000 and …