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ACC 291 Final Exam Study Guide

A study guide for preparing the final exam, covering accounting topics and principles.

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    ACC 291 Final Exam Study Guide Question 207 On January 1, a machine with a useful life of five years and a residual value of $40,000 was purchased for $120,000. What is the depreciation expense for year 2 under the double - declining - balance method of depreciation? $28,800 Explanation: Use the standard double - declining - balance formula to solve. IFRS Multiple Choice Question 01 As a recent graduate of State University you're aware that IFRS requires component depreciation for plant assets. A friend has asked you to succinctly explain what component depreciation means. Which of the following correctly describes component depreciation? The method that requires that significant parts of a plant asset with different useful lives be depreciated separately. Multiple Choice Question 198 Given the following account balances at year end, compute the total intangible assets on the balance sheet of Janssen Enterprises. Cash $1,500,000 Accounts Receivable 4,000,000 Trademarks 1,000,000 Goodwill 2,500,000 Research & Development Costs 2,000,000 $3,500,000. Explanation: Intangible Assets = Goodwill + Trademarks = 3,500,000 Multiple Choice Question 146 Bonds with a face value of $300,000 and a quoted price of 97¼ have a selling price of $291,750 Explanation: Price - 300,000 x 0.9725 = 291750

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    Multiple Choice Question 188 Sparks Company received proceeds of $423,000 on 10 - year, 8% bonds issued on January 1, 2013. The bonds had a face value of $400,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight - line method of amortization. What is the carrying value of the bonds on January 1, 2015? $418,400 Explanation: Annual Premium = 23000/10 = 2300 Carrying Value = 423000 – ( 2300 *2) = 418,400 Multiple Choice Question 90 S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was reached whereby E. Corp. would pay S. Lawyer a legal fee of approximately $15,000 by issuing 8,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $1.80 per share. Given this information, the best journal entry for E. Corp. to record for this transaction is Legal Expense 14,400 Common Stock 8,000 Paid - in Capital in Excess of Par - Common 6,400 Explanation: Use the market value of stock for the entry. 1.80 * 8000 = 14,400 Multiple Choice Question 110 Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or credits to Preferred Stock for $2,500,000 and Paid - in Capital in Excess of Par Value — Preferred Stock for $500,000.

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