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ACCT 504 Final Exam v2

ACCT 504 Final Exam v2

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Author: Abraham Nolito
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1. (TCO A) A disadvantage of the corporate form of business is _____. (Points : 5)
2. (TCO A) Which one of the following statements is correct with regard to dividends? (Points : 5)
3. (TCOs A and B) Below is a partial list of account balances for LBJ Company.
Cash

$30, 000

Prepaid rent

1,000

Accounts receivable

5,500

Accounts payable

3,800

Notes payable

4,200

Common stock

14,000

Dividends

1,700

Revenues

25,000

Expenses

15,500

What did LBJ Company show as total credits? (Points : 5)
4. (TCO B and E) Under cash-basis accounting, which of the following transactions would not be recorded? (Points : 5)
5. (TCO D) Two different companies utilize a different inventory costing method. If the price of goods has decreased during the period, then the company using _____. (Points : 5)
6. (TCO A, E) Johnson Company, a calendar year company, purchased a delivery vehicle for $21,000 on 1/1/14. License and insurance costs for the vehicle will be $700 per year. The salvage value is $3,500 and it has an estimated useful life of 5 years. The vehicle will be depreciated using the double declining balance method of depreciation. What will the depreciation expense be in year one? (Points : 5)
7. (TCOs D and G) When the market rate of interest exceeds the stated rate of interest on the bond, the bond will require _____. (Points : 5)
8. (TCO C) Accounts receivable arising from sales to customers amounted to $50,000 and $45,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $150,000. Based on these transactions, the cash flows from operating activities to be reported on the statement of cash flows would be _____. (Points : 5)
9. (TCO F) If you are calculating the percentage change between 2 years’ worth of sales data, you are conducting a _____. (Points : 5)
10. (TCO F) Vertical analysis is also known as _____. (Points : 5)
11. (TCO F) Which one of the following is typically analyzed via financial statement ratio analysis? (Points : 5)
12. (TCO F) A common ratio to measure liquidity is the _____. (Points : 5)
13. (TCO F) Shareholders are usually most interested in evaluating _____. (Points : 5)
14. (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5)
1. (TCO A) Below you will find selected information (in millions) from Coca-Cola Co.’s 2012 Annual Report.
Income Taxes Payable

$471

Short-term Investments and Marketable Securities

8,109

Cash

8,442

Other non-current Liabilities

10,449

Common Stock

1,760

Receivables

4,812

Other Current Assets

2,973

Long-term Investments

10,448

Other Non-current Assets

3,585

Property, Plant and Equipment

23,486

Trademarks

6,527

Other Intangible Assets

20,810

Allowance for Doubtful Accounts

53

Accumulated Depreciation

9,010

Accounts Payable

8,680

Short Term Notes Payable

17,874

Prepaid Expenses

2,781

Other Current Liabilities

796

Long-Term Liabilities

14,736

Paid-in-Capital in Excess of Par Value

11,379

Retained Earnings

55,038

Inventories

3,264

Treasury Stock

35,009

Other information taken from the Annual Report.
Sales Revenue for 2012

$48,017

Cost of Goods Sold for 2012

19,053

Net Income for 2012

9,019

Inventory Balance on 12/31/11

3,092

Net Accounts Receivable Balance on 12/31/11

4,920

Total Assets on 12/31/11

79,974

Equity Balance on 12/31/11

31,921


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