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ACC 557 Comprehensive Final Exam: Financial Accounting and Reporting

Comprehensive final exam covering financial accounting principles and reporting.

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    Comprehensive Final Exam for ACC 557: Financial Accounting and Reporting ACC 557/ACC557 Fin al Exam Part 1 & 2 PART 1 1. Ramos Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a Answer credit to Gain on Sale of Treasury Stock for $14,000. credit to Paid - in Capital from Treasury Stock for $4,000. debit to Paid - in Capital in Excess of Par for $4,000. credit to Treasury Stock for $18,000. 2. Each of the following decreases retained earnings except Answer cash dividend. liquidating dividend. stock dividend. All of these decrease retained earnings. 3. Paid - In Capital in Excess of Stated Value Answer is credited when no - par stock does not have a stated value. is reported as part of paid - in capital on the balance sheet. represents the amount of legal capital. normally has a debit balance.

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    4. A computer company has $2,800,000 in research and development costs. Before accounting for these costs, the net income of the company is $2,000,000. What is the amount of net income or loss after these R & D costs are accounted for? Answer $800,000 loss $2,000,000 net income $0 Cannot be determined from the information provided. 5. A plant asset was purchased on January 1 for $100,000 with an estimated salvage value of $20,000 at the end of its useful life. The current year's Depreciation Expense is $10,000 calculated on the straight - line basis and the balance of the Accumulated Depreciation account at the end of the year is $50,000. The remaining useful life of the plant asset is Answer 10 years. 8 years. 5 years. 3 years.

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    6. Goodwill can be recorded Answer when customers keep returning because they are satisfied with the company's products. when the company acquires a good location for its business. when the company has exceptional management. only when there is an exchange transaction involving the purchase of an entire business. 7. Which of the following statements concerning IFRS and U.S. GAAP is true? Answer IFRS permits revaluation of all intangible assets, whereas U.S. GAAP prohibits revaluation of intangible assets. Gains on exchange of assets when the exchange has commercial substance are recognized under both IFRS and U.S. GAAP. Changes in depreciation method under IFRS are reported in current and future periods, under U.S. GAAP such changes are treated as prior period adjustments. All of the choices are true regarding IFRS and U.S. GAAP.

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    8. A company has the following assets: Buildings and Equipment, less accumulated depreciation of $2,000,000 $9,600,000 Copyrights 960,000 Patents 4,000,000 Timberlands, less accumulated depletion of $2,800,000 4,800,000 The total amount reported under Property, Plant, and Equipment would be Answer $19,360,000. $14,400,000. $18,400,000. $15,360,000. 9. Powell’s Courier Service recorded a loss of $9,000 when it sold a van that originally cost $84,000 for $15,000. Accumulated depreciation on the van must have been Answer $78,000. $24,000. $75,000. $60,000.

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    10.On October 1, 2015, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5 - year life and $30,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2015, balance sheet assuming that Holt Company uses the double - declining - balance method of depreciation? Answer $78,000 $90,000 $108,000 $114,000 11. The balance in the Accumulated Depreciation account represents the Answer cash fund to be used to replace plant assets. amount to be deducted from the cost of the plant asset to arrive at its fair market value. amount charged to expense in the current period. amount charged to expense since the acquisition of the plant asset. 1 2 . The times interest earned is computed by dividing Answer net income by interest expense. income before income taxes by interest expense. income before interest expense by interest expense. income before income taxes and interest expense by interest expense.

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