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ACCT 557 Final Exam

ACCT 557 Final Exam

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Author: Christine Farr
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1. (TCO A) Amazon Building, Inc. won a bid for a new warehouse building contract.
Below is information from the project accountant.
Total Construction Fixed Price $15,000,000
Construction Start Date June 13, 2012
Construction Complete Date December 16, 2013As of Dec. 31… 2012 2013
Actual cost incurred $6,500,000 $4,360,000
Estimated remaining costs $5,250,000 $-
Billed to customer $5,000,000 $7,000,000
Received from customer $4,500,000 $6,500,000
Assuming Amazon Building, Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013? (Points : 5)

$4,140,000
$2,342,128
$2,390,000
$2,290,213
2. (TCO B) At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%.
Pretax income included:
Interest income from municipal bonds $15,000
Accrued warranty costs, estimated to be used in 2013 $74,000
Prepaid rent expense, will be used in 2013 $31,000
Installment sales revenue, to be collected in 2013 $56,000
Operating loss carryforward $71,000
What is taxable income for 2012? (Points : 5)
$727,000
$826,000
$915,000
$1,073,000
3. (TCO C) Presented below is pension information related to Amazing Goods, Inc. for the year 2013.
Service cost $96,000
Interest on projected benefit obligation $53,000
Interest on vested benefits $25,000
Amortization of prior service cost due to increase in benefits $10,000
Expected return on plan assets $19,000
The amount of pension expense to be reported for 2013 is (Points : 5)
$130,000.
$140,000.
$165,000.
$184,000
4. (TCO C) Apple Dumpling, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2013.
Service cost $280,000
Contributions to the plan $270,000
Actual return on plan assets $260,000
Projected benefit obligation (beginning of year) $2,900,000
Fair value of plan assets (beginning of year ) $2,700,000
The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2013 is (Points : 5)
$280,000.00.
$310,000.00.
$300,000.00.
$570,000.00


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