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Unit 1 Assessment

Question 1

  1. Transactions during the first year of operations are provided below.
    The owner, Sharon McCoy, contributed $10,000 cash in exchange for capital.
    Paid $1,100 cash for equipment to be used for plumbing repairs.
    Borrowed $12,000 from a local bank and deposited the money in the checking account.
    Paid $300 rent for the year.
    Purchased $200 of office supplies by cash.
    Completed a plumbing repair project for a local lawyer and received $3,200 cash.
    Calculate the amount of total liabilities at the end of the first year.

    $12,000

    $10,000

    $20,900

    $3,200

5 points

Question 2

  1. Spring Company has assets and equity that amount to $260,000 and $70,000, respectively. Liabilities total __________.
    $70,000
    $190,000
    $260,000
    $330,000

5 points

Question 3

  1. The equity of Alliance Company is $100,000 and the total liabilities are $10,000. The total assets are __________.
    $200,000
    $20,000
    $90,000
    $110,000

5 points

Question 4

  1. GAAP refers to guidelines for accounting information in the United States. The acronym GAAP in this statement refers to __________.
    Globally Accepted Accounting Policies
    Government Approved Accounting Principles
    Generally Accredited Accounting Policies
    Generally Accepted Accounting Principles

5 points

Question 5

  1. The earnings of a sole proprietorship are __________.
    combined with the personal income of the proprietor
    not combined with the proprietor’s personal income
    subject to double taxation
    handled similarly to that of a corporation

5 points

Question 6

  1. The Public Company Accounting Oversight Board (PCAOB) was created __________.
    by the Sarbanes-Oxley Act (SOX)
    to perform audits of public companies
    to make restitution to investors who were defrauded by the issuance of fraudulent financial reports
    to require auditors to take responsibility for the accuracy and completeness of financial reports from firms they audit

5 points

Question 7

  1. Dynamic Production Services started the year with total assets of $130,000 and total liabilities of $50,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to $100,000 and $60,000, respectively. During the year, there were no new capital contributions, and the owner withdrew $45,000. Calculate Dynamic’s net income for the year.
    $40,000
    $100,000
    $60,000
    $130,000

5 points

Question 8

  1. Which of the following organizations requires publicly owned companies to be audited by independent accountants (CPAs)?
    Securities and Exchange Commission (SEC)
    Public Company Accounting Oversight Board (PCAOB)
    Financial Accounting Standards Board (FASB)
    American Institute of Certified Public Accountants (AICPA)

5 points

Question 9

  1. The Sarbanes-Oxley Act (SOX) __________.
    requires independent accountants to take responsibility for the accuracy and completeness of the financial reports
    created the SEC
    ensures that financial scandals will no longer occur
    requires companies to take responsibility for the accuracy and completeness of their financial reports

5 points

Question 10

  1. Which of the following statements is TRUE of a sole proprietorship?
    A sole proprietorship joins two or more individuals as co-owners.
    The sole proprietor is personally liable for the liabilities of the business.
    A sole proprietorship is taxed separately from the owner.
    A sole proprietorship has to pay business income taxes.

5 points

Question 11

  1. Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?
    Financial Accounting Standards Board
    Institute of Management Accountants
    American Institute of Certified Public Accountants
    Securities and Exchange Commission

5 points

Question 12

  1. Precision Camera Services started the year with total assets of $120,000 and total liabilities of $40,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to $140,000 and $50,000, respectively. During the year, there were no new capital contributions, and the owner withdrew $45,000. What is the amount of owner’s equity at the end of the year?
    $50,000
    $140,000
    $125,000
    $45,000

5 points

Question 13

  1. Which of the following is the correct accounting equation?
    Assets + Liabilities = Equity
    Assets = Liabilities + Equity
    Assets + Revenues = Equity
    Assets + Revenues = Liabilities + Expenses

5 points

Question 14

  1. Managerial accounting provides information to __________.
    internal decision makers
    outside investors and lenders
    creditors
    taxing authorities

5 points

Question 15

  1. Which of the follow statements regarding the primary objective of financial reporting is correct?
    The primary objective of financial reporting is to provide information useful for the acquisition of long-term assets.
    Information that is faithfully represented is complete, neutral, and free from error.
    Relevant information ensures that users of the information will make the correct decisions.
    To be useful, information must follow the Generally Accepted Accounting Principles, which are created and governed by the Securities and Exchange Commission.

5 points

Question 16

  1. Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its __________.
    revenue
    expense
    gain
    debt

5 points

Question 17

  1. Nick’s Landscaping Services incurred $500 as a repair expense and promised to pay the repair company within 30 days. Which of the following accounts will increase as a result of this transaction?
    Accounts Receivable
    Cash
    Accounts Payable
    Nick, Capital

5 points

Question 18

  1. Mulberry Company collected $7,000 from one of its customers, the amount owed from the previous month. How does this affect the accounting equation for Mulberry?
    assets increase by $7,000; liabilities decrease by $7,000
    assets increase by $7,000; assets decrease by $7,000
    assets increase by $7,000; liabilities increase by $7,000
    assets increase by $7,000; equity increases by $7,000

5 points

Question 19

  1. __________ are professional accountants who serve the general public, not one particular company.
    Certified public accountants
    Financial managers
    Internal auditors
    Controllers

5 points

Question 20

  1. Green Lawns Company earned $500 for landscaping services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction?
    Accounts Payable
    Supplies
    Cash
    Accounts Receivable
 
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Posted by on November 12, 2017 in academic writing, Academic Writing

 

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Accounting

  1. Morris Minor Corporation manufactures two products each of which require machine processing and labor operations. There is extensive demand for both products, but Morris Minor could devote all of its capacity to manufacturing either product. Relevant financial information is as follows:

 

Product A-12 Product A-14
Unit selling price $220 $80
Unit variable cost $90 $40
Machine hours per unit 1.4 .4
Labor hours per unit 6 2

 

In 2014 the company will have a maximum capacity of 160,000 machine hours and 120,000 labor hours. Fixed costs in 2014 will be $1,000,000.

 

Compute the most profitable combination of products to be produced in 2014.

 

Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.

 

 

 

  1. It has been suggested that it is not possible to determine the point at which financial accounting and managerial accounting diverge. What does that mean?

 

Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.

 

 

 

 

 

  1. Tree Top Company manufactures a single product and uses a process costing system. On the first day of April, there were 5,000 units in process that were 100% complete as to direct materials and 50% complete as to direct labor and manufacturing overhead. During the month of April, the company began production of 100,000 units, and at the end of April, the Work-in-Process inventory consisted of 2,000 units that were 100% complete as to direct materials and 80% complete as to direct labor and manufacturing overhead. The company’s cost information is as follows:

 

Beginning Work-in-Process Costs Added In April
Direct materials $3,000 $65,250
Direct labor $125 $6,151
Manufacturing overhead $175 $7,147

 

Calculate the cost of units manufactured during April and the cost of Work-in-Progress at the end of April.

 

Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Outdoor Furniture Company has inventory balances at the end of August as follows:

 

Materials inventory $21,360
Work-in-Process inventory 15,112
Finished goods inventory 17,120

 

Job order cost cards for jobs in process at the company as of the end of September were as follows:

 

Job Number Direct Materials Direct Labor Mfg Overhead
48A $1,596 $1,290 $1,677
48B $1,492 $1,380 $1,794
48C $1,984 $1,760 $2,288
48D $1,608 $1,540 $2,002

 

Materials purchased and received in September:

 

September 4 $33,120
September 16 $28,600
September 22 $31,920

 

Direct labor costs for September:

 

September 15 payroll $23,680
September 29 payroll $25,960

 

Predetermined overhead rate:

 

130% of direct labor costs

 

Direct material transferred to production during September:

 

September 6 $37,240
September 23 $38,960

 

Finished goods with a 75% markup over cost were sold during September for $230,000.

 

  1. Compute the cost of units completed during the month.
  2. What was the total cost of units sold during the month?
  3. What are ending inventory balances?

 

Your response should be at least 200 words in length.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Financial information for a recent year for Apples, Inc. is:

 

Sales $40,000,000
Less:
Cost of goods sold 25,000,000
Selling and administrative expenses 5,000,000
Interest expense 1,000,000
Income before taxes 9,000,000
Less: income taxes 3,150,000
Net income 5,850,000

 

Total assets were $104,000,000 and the non-interest-bearing current liabilities were $2,000,000. The company has a required rate of return on invested capital of 10%.

 

Calculate the company’s return on investment.

 

Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.

 
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Posted by on November 30, 2016 in academic writing, Academic Writing

 

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Accounting

Greg Jackson, a single individual in the 39.6% bracket, sold a rental property for $530,000 in January 2016 and paid real esAtate commissions and other selling expenses of $30,000. Jackson originally purchased the property in September 2009 for $300,000 (cash) and allocated $240,000 of the purchase price to the building and $60,000 to the land. Jackson and the buyer did not agree to an allocation of the sales price, but he believes his original 80/20 allocation for the building and land is appropriate. Because of the buyer’s poor credit, Jackson decided to seller finance the sale of the property. According to the terms of the agreement, Jackson will receive monthly principal payments along with interest. The amortization schedule that Jackson provided shows the monthly payments of principal and interest over the ten year term. In 2016, he will receive total principal payments of $100,000 (including the down payment) and interest payments of $45,000. Jackson’s 2015 tax return contains a deprecation schedule that shows accumulated depreciation of $56,200. Like most taxpayers, Jackson is concerned about his tax bill. He wants to know if he has to recognize the entire gain from the sale or if he can defer the gain as he receives the payments. What amount of tax should Jackson expect to pay from the sale in 2016? The buyer will use the property as her principal residence, and she told Jackson that they have to exchange certain information to report on their tax returns. Jackson would like you to verify if the buyer’s statement is correct. Research these issues and write a letter to Greg Jackson with your response. In your letter, you should explain the tax treatment of the sale and calculate the amount of tax he will owe in 2016. Assume Jackson will not have any other asset sales during the year (2016). His address is 500 Paredes Line, Brownsville, Texas 78521.

 
 

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