FE Acct Final Exam MCQs

FE Acct Final Exam MCQs in $11 only

Dividends are declared out of

Multiple Choice Question 71

If Baylor Company issues 8,000 shares of $5 par value common stock for $280,000,

Multiple Choice Question 74

If stock is issued for a noncash asset, the asset should be recorded on the books of the

corporation at

Multiple Choice Question 76

If a stockholder receives a dividend that reduces retained earnings by the fair market value of the stock, the stockholder has received a

Multiple Choice Question 44

Capital Stock.

Paid-in Capital in Excess of Par.

Retained Earnings.

Treasury Stock.

Paid-In Capital in Excess of Par will be credited for $40,000.

Paid-In Capital in Excess of Par will be credited for $240,000

Cash will be debited for $240,000

Common Stock will be credited for $280,000.

fair value.

cost.

zero.

a nominal amount.

cash dividend.

contingent dividend.

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On the dividend record date,

Multiple Choice Question 49

Eggers Inc. has retained earnings of $1,600,000 and total stockholders’ equity of $4,000,000. It has 400,000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Eggers declares a 10% stock dividend on its common stock:

Multiple Choice Question 87

Rikki Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2014. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Rikki uses the straight-line method of amortization. What is the amount of interest Rikki must pay the bondholders in 2014?

Multiple Choice Question 83

small stock dividend.

large stock dividend.

Dividends Payable is debited.

a dividend becomes a current obligation.

no entry is required.

an entry may be required if it is a stock dividend.

net income will decrease by $200,000.

retained earnings will decrease by $200,000 and total stockholders’ equity will increase by $200,000.

retained earnings will decrease by $1200,000 and total paid-in capital will increase by $1200,000.

retained earnings will decrease by $1200,000 and total stockholders’ equity will increase by $1200,000.

$10,800

$13,200

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Garland Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2013. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Garland uses the straight-line method of amortization.

What is the carrying value of the bonds on January 1, 2015?

Multiple Choice Question 85

Brooks Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Brooks uses the straight-line method of amortization. Brooks Company decided to redeem the bonds on January 1, 2015. What amount of gain or loss would Brooks report on its 2015 income statement?

Multiple Choice Question 86

On January 1, 2014, Lark Corporation purchased 35% of the common stock outstanding of Dinc

Corporation for $700,000. During 2014, Dinc Corporation reported net income of $200,000 and

paid cash dividends of $100,000. The balance of the Stock Investments—Run account on the

books of Lark Corporation at December 31, 2014 is

Multiple Choice Question 74

$11,200

$12,000

$190,400

$197,350

$200,000

$189,200

$9,200 loss

$11,200 loss

$11,200 gain

$9,200 gain

$700,000.

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The account, Stock Investments, is

Multiple Choice Question 76

Revenue is recognized when cash dividends are received under

Multiple Choice Question 78

Rubble Company reported net income of $70,000 for the year. During the year, accounts

receivable increased by $6,000, accounts payable decreased by $5,000 and depreciation expense

of $8,000 was recorded. Net cash provided by operating activities for the year is

Multiple Choice Question 85

$735,000.

$770,000.

$665,000.

a subsidiary ledger account.

a general ledger control account.

a long-term liability account.

another name for Debt Investments.

the equity method.

the controlling interest method.

both the cost and equity methods.

the cost method.

$89,000.

$67,000.

$70,000.

$63,000.

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Pare Company reported a net loss of $30,000 for the year ended December 31, 2014. During the

year, accounts receivable decreased $15,000, merchandise inventory increased $25,000, accounts

payable increased by $30,000, and depreciation expense of $20,000 was recorded. During 2014,

operating activities

Multiple Choice Question 86

Starting with net income and adjusting it for items that affected reported net income but which

did not affect cash is called the

Multiple Choice Question 87

In calculating net cash provided by operating activities using the indirect method, an increase in

prepaid expenses during a period is

Multiple Choice Question 88

Blaney Clothing Store had a balance in the Accounts Receivable account of $437,500 at the

beginning of the year and a balance of $500,000 at the end of the year. Net credit sales during

the year amounted to $3,000,000. The average collection period of the receivables in terms of

days was

provided net cash of $25,000.

used net cash of $10,000.

used net cash of $25,000.

provided net cash of $10,000.

working capital method.

indirect method.

cost-benefit method.

direct method.

deducted from net income.

ignored because it does not affect income.

added to net income.

ignored because it does not affect expenses.

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Fess Hardware Store had net credit sales of $8,500,000 and cost of goods sold of $5,000,000 for

the year. The Accounts Receivable balances at the beginning and end of the year were $600,000

and $760,000, respectively. The accounts receivable turnover was

Multiple Choice Question 76

Turnbull Department Store had net credit sales of $18,000,000 and cost of goods sold of

$15,000,000 for the year. The average inventory for the year amounted to $2,500,000. The

average number of days in inventory during the year was

Multiple Choice Question 78

A manufacturing company calculates cost of goods sold as follows:

Multiple Choice Question 92

57 days.

365 days.

53.2 days.

60.1 days.

7.4 times.

12.5 times.

5.9 times.

11.2 times.

30 days.

365 days.

60.8 days.

50.7 days.

Beginning FG inventory – cost of goods manufactured – ending FG inventory.

Beginning FG inventory + cost of goods manufactured – ending FG inventory.

Beginning FG inventory + cost of goods purchased – ending FG inventory.

Ending FG inventory – cost of goods manufactured + beginning FG inventory.

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Agale Combines, Inc. has $40,000 of ending finished goods inventory as of December 31, 2014. If

beginning finished goods inventory was $25,000 and cost of goods sold was $75,000, how much

would Agale report for cost of goods manufactured?

Multiple Choice Question 97

Cost of goods manufactured is calculated as follows:

Multiple Choice Question 98

If the amount of “Cost of goods manufactured” during a period exceeds the amount of “Total

manufacturing costs” for the period, then

Multiple Choice Question 99

If annual overhead costs are expected to be $800,000 and direct labor costs are expected to be

$1,000,000, then if the activity base is direct labor costs:

Multiple Choice Question 94

$65,000

$115,000

$90,000

$15,000

Direct materials used + direct labor + manufacturing overhead – ending WIP – beginning

WIP.

Beginning WIP + direct materials used + direct labor + manufacturing overhead + ending

WIP.

Direct materials used + direct labor + manufacturing overhead – beginning WIP + ending

WIP.

Beginning WIP + direct materials used + direct labor + manufacturing overhead – ending

WIP.

ending work in process inventory is greater than or equal to the amount of the beginning

work in process inventory.

ending work in process is greater than the amount of the beginning work in process

inventory.

ending work in process is equal to the cost of goods manufactured.

ending work in process is less than the amount of the beginning work in process inventory.

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Damone Inc. applies overhead to production at a predetermined rate of 80% based on direct labor

cost. Job No. 250, the only job still in process at the end of August, has been charged with

manufacturing overhead of $7,400. What was the amount of direct materials charged to Job 250

assuming the balance in Work in Process inventory is $32,000?

Multiple Choice Question 97

Tracey Inc. applies overhead to production at a predetermined rate of 90% based on direct labor

cost. Job No. 130, the only job still in process at the end of August, has been charged with

manufacturing overhead of $5,400. What was the amount of direct materials charged to Job 130

assuming the balance in Work in Process inventory is $21,000?

Multiple Choice Question 98

Stanfield Company applies overhead on the basis of 160% of direct labor cost. Job No. 305 is

charged with $140,000 of direct materials costs and $240,000 of manufacturing overhead. The

total manufacturing costs for Job No. 305 is:

Multiple Choice Question 100

for every dollar of manufacturing overhead, 80 cents of direct labor will be assigned.

$1.25 is the predetermined overhead rate.

for every dollar of direct labor, 80 cents of manufacturing overhead will be assigned.

a predetermined overhead rate cannot be determined.

$15,350.

$32,000.

$22,750.

$9,250.

$10,740.

$4,860.

$9,600.

$6,000.

$530,000

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Lanbong Manufacturing has recently tried to improve its analysis for its manufacturing process.

Units started into production equaled 6,000 and ending work in process equaled 400 units. Long

had no beginning work in process inventory. Conversion costs are applied equally throughout

production, and materials are applied at the beginning of the process. How much is the materials

cost per unit if ending work in process was 25% complete and total materials costs equaled

$25,260?

Multiple Choice Question 91

Conversion cost per unit equals $7.00. Total materials costs are $40,000. Equivalent units are

20,000. How much is the total manufacturing cost per unit?

Multiple Choice Question 92

Physical units are 40,000. Total conversion costs are $237,000. There are 1,000 units in ending

inventory which are 50% complete as to conversion costs. How much are conversion costs per

unit?

Multiple Choice Question 93

$764,000

$380,000

$780,000

$4.14.

$4.00.

$4.21.

$3.95.

$5.00.

$9.00.

$2.00.

$7.00.

$5.78.

$6.00.

$11.86.

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Sales are $500,000 and variable costs are $200,000. What is the contribution margin ratio?

Multiple Choice Question 91

Hansen’s variable costs are 30% of sales. The company is contemplating an advertising campaign

that will cost $33,000. If sales are expected to increase $70,000, by how much will the company’s

net income increase?

Multiple Choice Question 92

Fowlen, Inc. has a product with a selling price per unit of $200, the unit variable cost is $90, and

the total monthly fixed costs are $300,000. How much is Fessler’s contribution margin ratio?

Multiple Choice Question 93

Multiple Choice Question 94

$5.92.

60%

40%

50%

Cannot be determined because amounts are not expressed per unit

$37,000

$12,000

$49,000

$16,000

55%

45%

222%

150%

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Grave Company has a contribution margin of $500,000 and a contribution margin ratio of 40%.

How much are total variable costs?

Brusl Co. is planning to sell 400 hair dryers and produce 380 hair dryers during March. Each hair

dryer requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500

grams and employees of the company are paid $14.00 per hour. Manufacturing overhead is

applied at a rate of 110% of direct labor costs. Brusl Co. has 300 kilos of plastic in beginning

inventory and wants to have 200 kilos in ending inventory. How much is the total amount of

budgeted direct labor for March?

Multiple Choice Question 91

Jared Manufacturing is planning to sell 1,200 boxes of ceramic tile, with production estimated at

1,120 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of

direct labor. Clay mix costs $0.50 per pound and employees of the company are paid $15.00 per

hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Jacob has 5,200

pounds of clay mix in beginning inventory and wants to have 6,000 pounds in ending inventory.

What is the total amount to be budgeted for direct labor for the month?

Multiple Choice Question 93

$200,000

$1,250,000

$750,000

$300,000

$5,600

$2,800

$2,660

$5,320

$18,000

$4,200

$16,800

$4,500

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Jacob Manufacturing is planning to sell 1,200 boxes of ceramic tile, with production estimated at

1,120 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of

direct labor. Clay mix costs $0.50 per pound and employees of the company are paid $15.00 per

hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Jacob has 5,200

pounds of clay mix in beginning inventory and wants to have 6,000 pounds in ending inventory.

What is the total amount to be budgeted in pounds for direct materials to be purchased for the

month?

Multiple Choice Question 94

A cost is considered controllable at a given level of managerial responsibility if

Multiple Choice Question 91

As one moves up to each higher level of managerial responsibility,

Multiple Choice Question 92

A responsibility report should

53,600

50,080

48,480

49,280

the manager has the power to incur the cost within a given time period.

the cost has not exceeded the budget amount in the master budget.

it is a variable cost, but it is uncontrollable if it is a fixed cost.

it changes in magnitude in a flexible budget.

performance evaluation becomes less important.

fewer costs are controllable.

a greater number of costs are controllable.

the responsibility for cost incurrence diminishes.

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Casey Company has a materials price standard of $2.10 per pound. Six thousand pounds of

materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000

pounds, although the standard quantity allowed for the output was 5,400 pounds.

Casey Company’s total materials variance is

Multiple Choice Question 91

The standard quantity allowed for the units produced was 4,500 pounds, the standard price was

$2.50 per pound, and the materials quantity variance was $475 favorable. Each unit uses 1 pound

of materials. How many units were actually produced?

Multiple Choice Question 92

The matrix approach to variance analysis

Multiple Choice Question 93

only be prepared at the highest level of managerial responsibility.

be prepared in accordance with generally accepted accounting principles.

show only those costs that a manager can control.

only show variable costs.

$1,920 F.

$1,920 U.

$1,860 U.

$1,860 F.

11,725

4,500

4,310

4,690

will yield slightly different variances than the formula approach.

is more accurate than the formula approach.

does not separate the price and quantity variance calculations.

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Labor efficiency is measured by the

Multiple Choice Question 94

Spencer Company is contemplating the replacement of an old machine with a new one. The

following information has been gathered:

If the old machine is replaced, it can be sold for $120,000.

Which of the following amounts is a sunk cost?

Multiple Choice Question 96

Old Machine New Machine

Price $390,000 $530,000

Accumulated Depreciation 170,000 -0-

Remaining useful life 6 years -0-

Useful life -0- 10 years

Annual operating costs $167,000 $151,500

Salem Co. is contemplating the replacement of an old machine with a new one. The following

information has been gathered:

Multiple Choice Question 97

Old Machine New Machine

provides a convenient structure for determining each variance.

total labor variance.

labor quantity variance.

materials quantity variance.

labor rate variance.

$220,000

$151,500

$170,000

$167,000

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If the old machine is replaced, it can be sold for $120,000.

Which of the following amounts is relevant to the replacement decision?

Price $390,000 $530,000

Accumulated Depreciation 170,000 -0-

Remaining useful life 6 years -0-

Useful life -0- 10 years

Annual operating costs $167,000 $151,500

Sardine Kitchen Company produces three sizes of crock pots: small, medium, and large. A

condensed segmented income statement for a recent period follows:

Assume none of the fixed expenses for the small size crock pot are avoidable. What will be total net

income if the line is dropped?

Multiple Choice Question 99

Large Medium Small Total

Sales $200,000 $200,000 $105,000 $505,000

Variable expenses 125,000 110,000 65,000 300,000

Contribution margin 75,000 90,000 40,000 205,000

Fixed expenses 55,000 55,000 47,000 157,000

Net income (loss) $20,000 $35,000 $(7,000) $48,000

If Donna Bradford invests $21,029.40 now and she will receive $60,000 at the end of 11 years,

what annual rate of compound interest will she be earning on her investment?

Multiple Choice Question 32

$170,000

$390,000

$151,500

$0

$55,000

$13,000

$47,000

$8,000

8%.

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Amy Gamma has been offered the opportunity of investing $240,228 now. The investment will

earn 4% per year and at the end of its life will return $400,000 to Amy. How many years must

Amy wait to receive the $400,000?

Multiple Choice Question 33

Dave Divine invests $30,000 and will earn 10% annual compound interest. How many years will it

take for him to have the $103,569 to buy the car he wants?

Multiple Choice Question 34

8.5%.

9%.

10%.

10.

11.

12.

13.

10.

12.

13.

15.

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