Student ID: 21563066 Exam: 061691RR - THE VALUE OF MONEY

When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.

1. Casey Company's bank statement shows a bank balance of $43,267. The statement shows a bank service charge of $50. Casey's book balance shows outstanding checks of $5,288 and deposits in transit of $9,325. The bank-side reconciliation would show cash of
A. $39,230. B. $43,217. C. $47,304. D. $43,267.

2. A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $500. The journal entry to record this transaction is
A. debit Cash for $500, debit Loss on Disposal for $55,500, and credit Truck for $56,000. B. debit Loss on Disposal $6,000, debit Accumulated DepreciationTruck for $50,000, and credit Truck for $56,000. C. debit Cash for $500, debit Truck for $50,000, debit Loss on Disposal for $5,500, and credit Accumulated Depreciation Truck for $56,000. D. debit Cash for $500, debit Accumulated DepreciationTruck for $50,000, debit Loss on Disposal for $5,500, and credit Truck for $56,000.

3. A $400,000 issue of bonds that sold for $363,000 matures on August 1, 2015. The journal entry to record the payment of the bond on the maturity date is
A. debit cash, $363,000; credit bonds payable, $363,000. B. debit bonds payable, $363,000; credit cash, $363,000. C. debit cash, $400,000; credit bonds payable, $400,000. D. debit bonds payable, $400,000; credit cash, $400,000.

4. Nick Company has cash of $33,000; net accounts receivable of $41,000; short-term investments of $15,000; and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. The quick ratio for Nick Company is
A. 3.80. B. 2.97. C. 1.78. D. 3.30.

5. Which marketable securities are reported at cost on the balance sheet date?
A. Trading and held-to-maturity securities

B. Held-to-maturity securities C. Trading securities D. Available-for-sale securities

6. Mackey Company has a five-year mortgage for $100,000. In the first year of the mortgage, Mackey will report this liability as a
A. current liability of $80,000 and a long-term liability of $20,000. B. current liability of $100,000. C. long-term liability of $100,000. D. current liability of $20,000 and a long-term liability of $80,000.

7. Jewell Company has current assets of $56,000; long-term assets of $135,000; current liabilities of $44,000; and long-term liabilities of $90,000. Jewell Company's debt ratio is
A. 127.3%. B. 70.2%. C. 78.6%. D. 239.3%.

8. Which of the following would be considered a contingent liability?

A. Accounts payable obligation B. Pending legal action C. Sales tax obligation D. Mortgage obligation

9. Ryan Corporation made a basket purchase of three items. Item A was appraised at $35,000; item B was appraised at $55,000; and item C was appraised at $60,000. The purchase price was $125,000. The amount at which item B should be recorded is
A. ($55,000/$125,000) $150,000. B. ($55,000/$95,000) $125,000. C. ($55,000/$150,000) $125,000. D. ($55,000/$95,000) $150,000.

10. Brandon Company completed an aging of its accounts receivable and came up with an estimated amount of $6,342. The credit sales for the period are $85,000. The balance in the allowance for doubtful accounts is a debit of $817. If Brandon uses 5% of credit sales as its estimating uncollectable accounts, how much will the credit be to the allowance for doubtful accounts if Brandon uses the estimate of aging receivables as its method of estimating uncollectable accounts?
A. $7,159 B. $4,250 C. $5,067 D. $5,525

11. Amanda Industries had total assets of $600,000; total liabilities of $175,000; and total stockholders' equity of $425,000. Amanda Industries' debt ratio is

A. 29.2%. B. 41.2%. C. 17.1%. D. 70.8%.

12. Brandon Corporation purchased a vein of mineral ore for $3,250,000. It is estimated that 15,000,000 tons of ore are available to be extracted. The salvage value is determined to be $400,000. The estimation depletion expense for this year's extraction of 1,760,000 tons of ore (rounded to the nearest dollar) is
A. $400,000. B. $381,333. C. $428,267. D. $334,400.

13. A repair that extends the useful life of an asset would be considered a/an
A. betterment. B. capital expense. C. ordinary repair. D. extraordinary repair.

14. Margaret is a customer of Tammy Company. The company wrote off her account of $1,200 on August 15. On October 12, she sent in a payment of $560. What will Tammy Company record first to reinstate her account?
A. Debit Accounts Receivable/Margaret; credit Allowance for Doubtful Accounts. B. Debit Uncollectible Accounts Expense; credit Accounts Receivable/Margaret. C. Debit Allowance for Doubtful Accounts; credit Accounts Receivable/Margaret. D. Debit Cash; credit Accounts Receivable/Margaret.

15. A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $0. The journal entry to record this transaction is
A. debit Accumulated Depreciation Truck for $50,000 and credit Truck for $50,000. B. debit Truck for $50,000, debit Loss on Disposal for $6,000 and credit Accumulated Depreciation Truck for $56,000. C. debit Loss on Disposal $6,000, debit Accumulated Depreciation Truck for $50,000, and credit Truck for $56,000. D. debit Truck for $56,000, credit Accumulated Depreciation Truck for $50,000, and credit Gain on Disposal for $6,000.

16. A company receives a note payable for $3,500 at 9% for 45 days. How much interest (to the nearest cent) will the customer owe using a 360-day year?
A. $38.84 B. $354.38 C. $315.00 D. $39.38

17. Which of the following would indicate poor internal control over accounts receivable?
A. The same person handling cash receipts also records the accounts receivable transactions.

B. The mailroom employees open the mail and give the cash receipts to another employee. C. The person handling cash receipts passes the receipts to someone who enters them into accounts receivable. D. The person who handles accounts receivable wouldn't write off accounts as uncollectable.

18. Using a 365-day year, the maturity value of a 180-day note for $2,700 at 9% annual interest is (rounded to the nearest cent)
A. $119.84. B. $2,821.50. C. $2,819.84. D. $2,943.00.

19. A company purchased furniture on January 1, 2012. Its cost was $15,600, and it had a residual value of $1,600. Its useful life is determined to be three years. Using double-declining balance depreciation, the depreciation for 2012 to the nearest dollar will be
A. $5,200. B. $9,333. C. $10,400. D. $4,667.

20. Which of the following would be considered a cash equivalent?

A. Money orders B. Checks C. Time deposits D. Currency

End of exam