Posted: October 20th, 2022

DeVry ACCT504 Final exam 2014

1. Which of the following is an advantage of corporations
relative to partnerships and sole proprietorships?
Reduced legal liability for investors
Harder to transfer ownership
Lower taxes
Most common form of organization

2. Dividends _____.
represent an expense and are an operating activity
represent an obligation and are an operating activity
represent a distribution of earnings and are a financing
activity
represent an asset and are an investing activity

3. Below is a partial list of account balances for LBJ
Company:
Cash $15,000
Prepaid insurance 5,000
Accounts receivable 2,500
Accounts payable 3,000
Notes payable 6,000
Common stock 10,000
Dividends 500
Revenues 15,000
Expenses 13,000
What did LBJ Company show as total debits?
$34,000
$36,000
$70,000
$31,000

4. Under the accrual basis of accounting, revenues are
recorded and reported _____.
when companies receive payments for jobs performed or
products provided
when companies have provided products or performed services
when companies receive payments prior to providing products
or performing services
when companies receive payments after providing products or
performing services

5. In a period of increasing prices, which inventory cost
flow assumption will result in the highest amount of net income?
LIFO
The average cost method
FIFO
Income tax expense for the period will be the same under all
assumptions.
6. Equipment was purchased for $55,000 on January 1, 2011.
Freight charges of $2,200 were incurred and there was a cost of $1,800 for
installation. It is estimated the equipment will have a $5,500 salvage value at
the end of its 5-year useful life. Depreciation expense for 2011 using the
straight-line method will be _____.
$10,340
$10,700
$10,260
$9,900

7. Payne Corporation issues 100 twenty-year, 6%, $1,000
bonds dated July 1, 2010, at 94. The journal entry to record the issuance will
show a _____.
debit to Cash of $100,000
credit to Bonds Payable of $94,000
credit to Premium on Bonds Payable of $4,000
debit to Discount on Bonds Payable of $6,000

8. Accounts receivable arising from sales to customers
amounted to $80,000 and $120,000 at the beginning and end of the year,
respectively. Income reported on the income statement for the year was
$2,000,000. Exclusive of the effect of other adjustments, the cash flows from
operating activities to be reported on the statement of cash flows is _____.
$2,040,000
$2,000,000
$1,200,000
$1,960,000

9. If you are making comparisons within a company to detect
changes in financial relationships and significant trends, you are performing
what type of analysis?
Industry averages analysis
Intercompany analysis
Common-size analysis
Intracompany analysis

10. The formula for performing horizontal analysis is _____.

(Current Year Amount minus Base Year Amount) divided by
Current Year Amount
Base Year Amount divided by Current Year Amount
Current Year Amount minus Base Year Amount
(Current Year Amount minus Base Year Amount) divided by Base
Year Amount

11.Horizontal analysis of comparative financial statements
includes the _____.
development of common-size statements
calculation of liquidity ratios
calculation of dollar amount changes and percentage changes
from the previous year to the current year
Assessment of financial statement data that expresses each
item in a financial statement as a percentage of a base amount

12. A common measure of solvency is the _____.
asset turnover
current cash debt coverage ratio
cash debt coverage ratio
current ratio

13. Stockholders would be most interested in which of the
following ratios?
Days in inventory
Free cash flow
Current ratio
Average collection period

14. To calculate the market value of a bond, we need to
_____.
multiply the bond price times the interest rate
calculate the present value of the principal only
calculate the present value of the interest only
calculate the present value of both the principal and
interest payments

/
1.The financial manager should examine available risk-return
trade-offs and make his decision based upon the greatest expected return.

2.Only a few financial decisions involve some sort of
risk-return tradeoff.

3.The sole proprietorship can be described as the absence of
any legal business structure.

4.In a general partnership, all partners have unlimited
liability for the actions of any one partner when that partner is conducting
business for the firm.

5.There is no legal distinction made between the assets of
the business and the personal assets of the owners in the limited partnership.

6.General partners have unrestricted transferability of
ownership, while limited partners must have the consent of all partners to
transfer their ownership.

7.Ultimate control in a corporation is vested in the board
of directors.

8.There are a significant number of legal requirements to
follow when establishing a sole proprietorship.

9.Limited partners may actively manage the business.

10.The life of a corporation is not dependent upon the
status of the investors.

11.A sole proprietorship is the most desirable business form
in all circumstances.

12.In a sole proprietorship, the owner is personally
responsible without limitation for the liabilities incurred.

13.In a limited partnership, at least one general partner
must remain in the association; the privilege of limited liability still
applies to this partner.

14.In a general partnership, there is a distinction between
business and personal assets.

15.In order to maximize shareholder wealth, a firm must
consider historical costs as an integral part of their decision-making.

16.Financial management is concerned with the maintenance
and creation of wealth.

17.Shareholder wealth is measured by the market value of the
firm’s common stock.

18.The agency problem arises due to the separation of
ownership and control in a firm.

19.There is little, if any, difference between a business
error and an ethical error.

20.For markets to be efficient, price adjustments to new
information must be correct.

21.Ethical dilemmas frequently exist in finance.

22.Even though diversification can eliminate risk, it also
makes it more difficult to measure a project’s or an asset’s risk.

23.Consider the following equally likely project outcomes:
Profit XY Pessimistic prediction$0$500 Expected outcome$ 500$500 Optimistic
prediction$1000 $500
a.Project Y has less uncertainty than Project X.
b.Project X has more
variability than Project Y.
c.a and b.
d.Since Projects X and Y have the same expected outcomes of
$500, investors will view them as identical in value.

24.Maximization of shareholder wealth as a goal is superior
to profit maximization because:
a.it considers the time value of the money.
b.following the shareholder wealth maximization goal will
ensure high stock prices.
c.it considers uncertainty.
d.a and c.

25.Why is maximizing shareholder wealth a better goal than
maximizing profits?
a.Maximizing shareholder wealth places greater emphasis on
the short term.
b.Maximizing profits ignores the uncertainty that is related
to expected profits.
c.Maximizing shareholder wealth gives superior consideration
to the entire portfolio of shareholder investments.
d.Maximizing profits gives too much weight to the tax
position of shareholders.

26. Profit maximization does not adequately describe the
goal of the firm because:
a.profit maximization
does not require the consideration of risk.
b.profit maximization ignores the timing of a project’s
return.
c.maximization of dividend payout ratio is a better
description of the goal of the firm.
d.a and b.

27. Consider cash flows for Projects X and Y such as:
Project XProject Y Year 1$3000 $0 Year 2$0$3000 A rational person would prefer
receiving cash flows sooner because:
a.the money can be reinvested.
b.the money is nice to have around.
c.the investor may be tired of a particular investment.
d.the investor is indifferent to either proposal.

28. What is the chief disadvantage of the sole
proprietorship as a form of business organization when compared to the
corporate form?
a.Sole proprietorships are subject to double taxation of
profits.
b.The cost of formation.
c.Inadequate profit sharing.
d.Owners have unlimited liability.

29. Which of the following is not for limited partnerships?
a. Limited partners can only manage the business.
b. One general partner must exist who has unlimited
liability.
c. Only the name of general partners can appear in the name
of the firm.
d. Limited partners may sell their interest in the company.

30 .In terms of organizational costs, which of the following
sequences is correct, moving from lowest to highest cost?
a.General partnership, sole proprietorship, limited
partnership, corporation
b.Sole proprietorship, general partnership, limited
partnership, corporation
c.Corporation, limited partnership, general partnership,
sole proprietorship
d.Sole proprietorship, general partnership, corporation,
limited partnership

31.Coplon, Inc., an industrial firm, earned $180,000 in
dividends in 1993 on their stock holding in the Finco Company. How much of the
dividends are excluded from Coplon’s taxable income?
a.$27,000
b.None
c.$126,000
d.$153,000

32.Which one of the following categories of owners enjoys
limited liability?
a.General partners in a limited partnership
b.Shareholders (common stock) of a corporation
c.Sole proprietors
d.Both a & b

33. Which of the following is a characteristic of a limited
partnership?
a.It allows one or more partners to have limited liability.
b.It requires one or more of the partners to be a general
partner to whom the privilege of limited liability does not apply.
c.It prohibits the limited partners from participating in
the management of the partnership.
d.all of the above.

34.Which of the following categories of owners have limited
liability?
a.General partners
b.Sole proprietors
c.Shareholders of a corporation
d.Both a and b

35.Which of the statements below is ?
a.The sole proprietorship and the general partnership both
feature unlimited liability.
b.It is very complicated (legally) to establish a
corporation.
c.No legal criterion exists for a general partnership.
d.All of the above are .

36.Which of the following types of business forms is the
most ideal in terms of attracting new capital? a.Sole proprietorship
b.Limited partnership
c.General partnership
d.A public corporation

37.Which forms of organization are free of initial legal
requirements?
a.Sole proprietorship
b.General partnership
c.Corporation
d.Both a and b

38. For these types of organization, no distinction is made
between business and personal assets.
a. Sole proprietorship
b. General partnership
c. Limited partnership
d. All of the above
e. Both a and b

39.Which of the following is a significant disadvantage of a
general partnership?
a.The cost of forming it is high.
b.Each partner is fully responsible for the liabilities
incurred by the partnership.
c.There is a risk associated with the industry in which it
operates.
d.Forming the business is very complex.

40.Which of the following should be considered when
assessing the financial impact of business decisions?
a.The amount of projected earnings
b.The risk-return tradeoff
c.The timing of projected earnings; i.e., when they are
expected to occur
d.The amount of the investment in a given project
e.All of the above

41. Which of the following forms of business organization is
the dominant economic force in the United States?
a.The sole proprietorship
b.The general partnership
c.The limited partnership
d.The joint venture
e.The corporation

42.Which of the following reasons is most responsible for
corporations being the most important form of business organization in the
United States?
a.Corporations have limited life.
b.Stockholders have unlimited liability.
c.Corporations are subject to less government regulation
than the other forms of business organization. d.Corporations have the ability
to raise larger sums of capital than the other forms of business organization.
e.Corporations are
subjected to less taxation than the other forms of business organization.

43.How could you compensate an investor for taking on a
significant amount of risk?
a.Increase the expected rate of return.
b.Raise more debt capital.
c.Offer stock at a higher price.
d.Increase sales.

44.Which of the following would be most likely to align the
interests of managers and shareholders? a. Fixed but high salaries
b. Large bonuses
c. Stock options
d. All of the above
e. None of the above

45.What does the agency problem refer to?
a.The conflict that exists between the board of directors
and the employees of the firm
b.The problem associated with financial managers and
Internal Revenue agents
c.The conflict that exists between stockbrokers and
investors
d.The problem that results from potential conflicts of
interest between the manager of a business and the stockholders
e.None of the above

46.A limited liability company (LLC) is:
a.able to retain limited liability for owners.
b.taxed like a corporation.
c.a cross between a partnership and a corporation.
d.a and c.
e.all of the above.

47.Purchasing a security of a company that is issuing their
stock for the first time publicly would be considered:
a.a secondary market transaction.
b.an initial public offering.
c.a seasoned new issue.
d.both a and b.

48.In measuring value, the focus should be on:
a.cash flow.
b.accounting profits.
c.time value of money.
d.earnings per share.

49.Which of the following is regarding accounting profits?
a.Received by the firm and reinvested
b.Reflects money in hand
c.Represents actual money received and paid out
d.Equals cash in the bank

50.Which of the following statements is regarding competitive markets?
a.Large profits exist
over the long run.
b.Product differentiation produces insulation for
competitors.
c.Cost advantages attract new entrants.
d.Both b and c.

51.Which of the following decrease new competition in
competitive markets?
a.Economies of scale
b.Proprietary technology
c.Product differentiation
d.Both a and b
e.All of the above

52. Cost advantages in competitive markets:
a.have the potential
to create large profits.
b.deter new entrants from entering.
c.can be created by economies of scale.
d.all of the above.

53.Which of the following is a characteristic of an
efficient market?
a.Small number of individuals.
b.Opportunities exist for investors to profit from publicly
available information.
c.Security prices reflect fair value of the firm.
d.Immediate response occurs for new public information.

54. Diversification increases when ________ decreases.
a.variability
b.return
c.risk
d.a and c
e.all of the above

55. IBM issuing new shares of common stock would be
classified as:
a. a new seasoned issue.
b. an initial public offering.
c. a secondary market transaction.
d. a and b.

56. According to the agency problem, _________ represent the
principals of a corporation. a.shareholders b.managers c.employees d.suppliers

57. The opening of new international markets to the U.S. can
be attributed to:
a.acceptance of a free market system by third world
countries.
b.regulation of U.S. industries.
c.increase in information technology.
d.a and c.
e.all of the above. Short-Answer Questions

58.Briefly discuss mechanisms that can be used to align the
interests of shareholders and managers.
59.Briefly discuss why financial decision makers must focus
on incremental cash flows when evaluating new projects.
60.Discuss the risk/return tradeoff and how it relates to
finance.
61.Compare and contrast primary market and secondary market
transactions as it relates to the flow of funds in the transactions.
62.Discuss how new entrants are deterred from entering a
competitive market.
63.What is incremental cash flow and how is it used in
project analysis?

Ch1:
1. In
the past, the study of finance has included
A) mergers and
acquisitions.
B) raising capital.
C) bankruptcy.
D) all of the above.
2. One
of the major disadvantages of a sole proprietorship is
A) that there is
unlimited liability to the owner.
B) the simplicity of decision making.
C) low organizational costs.
D) low operating costs.
3. Many
companies such as Tyco, Enron, WorldCom, etc. that suffered financial distress
in the late 1990s and early 2000s,
A) committed fraud.
B) had failed corporate governance
oversight.
C) went bankrupt.
D) all of the above are .
4. Agency
theory would imply that conflicts are more likely to occur between management
and shareholders when
A) the company is
owned and operated by the same person.
B) management acts in the best
interests of maximizing shareholder wealth.
C) the chairman of the board is also
the chief executive officer (CEO).
D) the board of directors exerts strong
and involved oversight of management
5. Maximization
of shareholder wealth is a concept in which
A) increased
earnings is of primary importance.
B) profits are maximized on a quarterly
basis.
C) virtually all earnings are paid as
dividends to common stockholders.
D) optimally increasing the long-term
value of the firm is emphasized.
6. Money
markets would include which of the following securities?
A) common stock and
corporate bonds.
B) treasury bills and commercial paper.
C) certificates of deposit and
preferred stock.
D) all of the above.

7. The
Internet has affected the financial markets by
A) creating more
competition between markets.
B) pushing the cost of trading down.
C) forcing brokerage companies to
consolidate.
D) all of the above

Ch. 2
1. A
short-term creditor would be most interested in
A) profitability
ratios.
B) asset utilization ratios.
C) liquidity ratios.
D) debt utilization ratios.
2. Given
the balance sheet and income state for Simmons Maintenance Company, compute the
ratios that are also shown for the industry average. The “right answer” refers to the
question of whether a particular ratio for Simmons is better or worse than the
industry average.

SIMMONS MAINTENANCE COMPANY
Balance Sheet

Assets Liabilities
Cash $ 15,000 Accounts
Payable $ 21,000
Accts. Receivable 22,000 Notes Payable 20,000
Inventory 30,000 Accrued
Expenses 5,000
Current Assets 67,000 Current Liabilities 46,000
Net Fixed Assets 73,000 Long-term
Debt 30,000
Stockholders’
Equity 64,000

Total Assets $140,000 Total Liabilities &
Stockholders’ Equity $140,000

Income Statement

Sales (80% credit) $120,000
Less: Cost of Goods Sold 45,000
Gross Profit 75,000
Selling and Administrative Expense 20,000
Rent Expense (Lease) 8,000 28,000
EBIT 47,000
Interest Expense 5,000
Earnings before taxes 42,000
Taxes (@ 25%) 10,500
Net Income $ 31,500

Common shares outstanding 15,000
EPS $ 2.10
?

?
Ch. 4
1. In
developing the pro forma income statement we follow four important steps:
1) compute
other expenses,
2) determine
a production schedule,
3) establish
a sales projection,
4) determine
profit by completing the actual pro forma statement.
What
is the correct order for these four steps?
A) 1,2,3,4
B) 4,3,2,1
C) 2,1,3,4
D) 3,2,1,4
2. Ellis
Sport Shop projects the following sales:

April May June
$75,000 $95,000 $110,000

Ninety
percent of Ellis’ sales are on credit with 60 percent of receivables collected
in the month after the sale and the rest of receivables collected in the second
month after the sale. February sales
were $60,000 and March sales were $70,000.
In the past Ellis’ bad debt percentage has been 0 and is expected to
continue.

a) Prepare a
monthly schedule of cash receipts for April-June.
b) What is
the balance of Receivables at the end of June.

?
Ch. 5
1. The
concept of operating leverage involves the use of __________ to magnify returns
at high levels of operation.

A) fixed costs
B) variable costs
C) marginal costs
D) semi-variable costs

2. At
the break-even point, a firm’s profits are
A) greater
than zero.
B) less than zero.
C) equal to zero.
D) Not enough information to tell

3. A
highly automated plant would generally have
A) more
variable than fixed costs.
B) more fixed than variable costs.
C) all fixed costs.
D) all variable costs.

4. If
a firm has a price of $4.00, variable cost per unit of $2.50 and a breakeven
point of 20,000 units, fixed costs are equal to:
A) $13,333
B) $10,000
C) $30,000
D) $50,000

5. Combined
leverage is concerned with the relationship between
A) changes in
EBIT and changes in EPS.
B) changes in volume and changes in
EPS.
C) changes in volume and changes in
EBIT.
D) changes in EBIT and changes in net
income.

6. Use the
table to answer following questions:

Sales (75,000 units) $750,000
Variable costs 225,000
Contribution margin $525,000
Fixed manufacturing costs 187,500
Operating income $337,500
Interest 75,000
Earnings before taxes $262,500
Taxes (at 31%) 81,375
Net Income $181,125
Shares outstanding 15,000

1. (TCO A) Which of the following is an advantage of the
sole proprietorship relative to the corporate form of business organization?
(Points : 5)
Limited
liability of investor

Transferability of ownership
Simple to
establish
Unlimited life

2. (TCO A) Dividends _____. (Points : 5)
represent an
expense and are an operating activity
represent an
obligation and are an operating activity
represent a
distribution of earnings and are a financing activity
represent an
asset and are an investing activity

3. (TCOs A, B) Below is a partial list of account balances
for LBJ Company:

Cash
$15,000
Prepaid insurance
5,000
Accounts receivable
2,500
Accounts payable
3,000
Notes payable
6,000
Common stock
10,000
Dividends 500
Revenues 15,000
Expenses
13,000

What did LBJ Company show as total debits?
(Points : 5)
$34,000
$36,000
$70,000
$31,000

4. (TCOs B, E) Why is the accrual basis of accounting
preferred by GAAP? (Points : 5)

The Accrual
basis is easier to use.
The Accrual
basis is also preferred by the Internal Revenue Service.
The Accrual
basis complies with the revenue recognition and matching principles.
The Accrual
basis requires fewer accounting resources.

5. (TCO D) In a period of increasing prices, which inventory
cost flow assumption will result in the highest amount of net income?(Points :
5)
LIFO
The average
cost method
FIFO
Income tax
expense for the period will be the same under all assumptions.

6. (TCOs A, E) Equipment was purchased for $75,000 on
January 1, 2011. Freight charges of $3,200 were incurred and there was a cost
of $6,000 for installation. It is estimated the equipment will have a $12,000
salvage value at the end of its 5-year useful life. Depreciation expense for
2011 using the straight-line method will be _____. (Points : 5)
$13,800
$14,440
$12,600
$13,240

7. (TCO D,G) Payne Corporation issues 100 twenty-year, 6%,
$1,000 bonds dated July 1, 2010, at 94. The journal entry to record the
issuance will show a _____. (Points : 5)
debit to Cash
of $100,000
credit to
Bonds Payable of $94,000
credit to
Premium on Bonds Payable of $4,000
debit to
Discount on Bonds Payable of $6,000

8. (TCO C) Accounts receivable arising from sales to
customers amounted to $80,000 and $100,000 at the beginning and end of the
year, respectively. Income reported on the income statement for the year was
$1,000,000. Exclusive of the effect of other adjustments, the cash flows from
operating activities to be reported on the statement of cash flows is _____.
(Points : 5)
$20,000
$1,020,000
$1,000,000
$980,000

9. (TCO F) If you are making comparisons within a company to
detect changes in financial relationships and significant trends, you are
performing what type of analysis? (Points : 5)
Industry
averages analysis
Intercompany analysis
Common-size
analysis
Intracompany
analysis

10. (TCO F) The formula for performing horizontal analysis
is _____. (Points : 5)
(Current Year
Amount minus Base Year Amount) divided by Current Year Amount
Base Year
Amount divided by Current Year Amount
Current Year
Amount minus Base Year Amount
(Current Year
Amount minus Base Year Amount) divided by Base Year Amount

11. (TCO F) Horizontal analysis is a technique for
evaluating a series of financial statement data over a period of time
_____.(Points : 5)
that has been
arranged from the highest number to the lowest number
that has been
arranged from the lowest number to the highest number
to determine
which numbers are in error
to determine
the amount and/or percentage increase or decrease that has taken place

12. (TCO F) A common measure of liquidity is _____. (Points
: 5)

debt-to-total-assets ratio
cash debt
coverage
free cash flow
working
capital

13. (TCO F) Short-term creditors would be most interested in
which of the following ratios? (Points : 5)
Average
collection period
Times interest
earned
Cash debt
coverage
Free cash flow

14. (TCO G) To calculate the market value of a bond, we need
to _____. (Points : 5)
multiply the
bond price times the interest rate
calculate the
present value of the principal only
calculate the
present value of the interest only
calculate the
present value of both the principal and

1. (TCO A) Use the following partial financial statement
information below to calculate the liquidity and profitability ratios. This
information can be used to correctly solve each of the ratios below.
Average common shares outstanding 35,000 Current liabilities $25,000
Capital expenditures $20,000 Net income $50,000
Cash provided by operations $77,000 Net sales $100,000
Preferred stock dividends paid $30,000 Total liabilities $50,000
Current assets
$20,000 Total assets $80,000
Instructions: Compute the following.
a) Current ratio
b) Working capital
c) Earnings per share
d) Debt-to-total-assets ratio
e) Free cash flow
To earn full credit, you must show the formula you are
using, show your computations, and explain the meaning of each of your ratio
results. (Points : 30)(TCO D) The Oxford Company has budgeted sales revenues as follows.Oct Nov DecCredit sales $120,000 $96,000 $72,000Cash sales 72,000 204,000 156,000Total sales 192,000 300,000 228,000Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit, with 60% paid in the month of purchase and 40% in the month following purchase. Budgeted inventory purchases are $260,000 in October, $180,000 in November, and $84,000 in December.Other budgeted cash receipts include (a) the sale of plant assets for $49,400 in November and (b) the sale of new common stock for $67,400 in December. Other budgeted cash disbursements include (a) operating expenses of $27,000 each month, (b) selling and administrative expenses of $50,000 each month, (c) dividends of $76,000 to be paid in November, and (d) purchase of equipment for $24,000 cash in December.The company has a cash balance of $40,000 at the beginning of December and wishes to maintain a minimum cash balance of $40,000 at the end of each month. An open line of credit is available at the bank and carries an annual interest rate of 12%. Assume that all borrowing is done on the first day of the month in which financing is needed and that all repayments are made on the last day of the month in which excess cash is available. Also assume that $14,000 of financing was obtained on November 1.Requirements: Use this information to prepare a schedule of expected cash payments for purchases of inventory for the months of November and December only

This question does not require creation of an entire cash
budget so please only create the schedule that is asked for in the question
because otherwise you will be wasting valuable time.
(Points : 30)The following items are taken from the financial
statements of Lansing Company for 2010. Accounts
payable: $16,500. Accounts receivable: $ 25,500. Accumulated depreciation: 12,600.
Bonds payable: 35,000. Cash: 55,000. Common stock: 75,000. Cost of goods sold:
53,000. Depreciation expense: 6,300. Dividends:
5,300. Equipment: 35,000. Interest expense: 4,300. Patents: 6,500. Retained earnings: January 1 $80,000. Salaries expense: $ 42,000.
Sales revenue: $ 115,000. Supplies: $ 3,500.
Instructions: Prepare an income statement
and a retained earnings statement for Lansing Company. (Point : 30)(TCO D) Your friend James has hired you to evaluate the
following internalcontrol procedures.a) Explain to your friend whether each of
the numbered items below is an internal control strength or weakness. You must
also state which principle relates to each of the internal controls.b) For the weaknesses, you also need to
state a recommendation for improvement .Everyone has access to the petty cash
fund.
Cash register codes are assigned to each
cashier. The treasurer is the only one allowed to sign checks. Supervisors
count cash receipts daily. The treasurer approves of the purchases and makes
the payment because he is familiar with the purchases. (Points : 30)
(Points : 30)

5.  (TCOs D, E) Please prepare the following
journal entries. Indicate which account should be debited with the abbreviation
DR in front of the account name and which account should be credited with the
abbreviation CR in front of the account name along with the dollar amount of
the debit and credit.
a) Investors invested $150,000 in exchange
for 10,000 shares of common stock.
b) Company made payment on account for
$10,000
c) Company received $15,000 for services
not yet performed
d) Company purchased $7,500 worth of
equipment
e) Company billed $5,000 for services
performed (Points : 30)
6. (TCO C) Please indicate which section of the statement of
cash flows should contain each of the following items and whether each item
would result in an inflow or outflow of cash. The sections are Operating,
Investing, and Financing.
a) Depreciation of equipment
b) Increase in accounts payable
c) Sold a building at book value
d) Payment of dividends

e) Increase in inventory
(Points : 30)

Order | Check Discount

Tags: AI Plagiarism free essay writing tool, Australian best tutors, best trans tutors, buy essay uk, cheap dissertation writer