Intermediate Accounting II
Acct 311 (7982), Fall, 2017
Professor: Leon Hutton, CPA, CGFM, MBA, MA
Student: _____________________ Due: Sunday, November 12, 2017 by 11pm (EST)
· This quiz is open book & open notes, a calulator should be used.
· Write, print or type directly on this quiz
· you may present your answers in a Word, excel or pdf file.
· Show your work, in good form, where applicable for full credit –even for the multiple choice questions, show your work (points deducted f or not showing computations)
· You may not discuss this quiz with classmates or other students – our UMUC Honor Code prevents you from obtaining outside or classmate asssistance – contact me with any questions or concerns in this matter.
· Scan your answers into 1 document (pdf, Word, Excel, etc) and submit in the Quiz 1 section.
· Out of fairness to the students who complete and submit the quiz on time, I will have to assess grade penalties for late submission. The absolute latest you can submit this quiz is Tuesday, November 14.
This quiz consists of the following:
|20 multiple choice questions – 4 points each.||80|
|Problems 1 to 4 are worth 5 points each for a total of 20 points.||20|
1. Which of the following is generally associated with payables classified as accounts payable?
Periodic Payment Secured
of Interest by Collateral
a. No No
b. No Yes
c. Yes No
d. Yes Yes
2. On January 1, 2018, Fiorenza Co. leased a building to Cedar Corp. for a ten-year term at an annual rental of $80,000. At inception of the lease, Fiorenza received $320,000 covering the first two years’ rent of $160,000 and a security deposit of $160,000. This deposit will not be returned to Cedar upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What portion of the $320,000 should be shown as a current and long-term liability, respectively, in Fiorenza’s December 31, 2018 balance sheet?
Current Liability Long-term Liability
a. $0 $320,000
b. $80,000 $160,000
c. $160,000 $160,000
d. $160,000 $80,000
3. On September 1, 2017, Demich Co. issued a note payable to National Bank in the amount of $2,400,000, bearing interest at 12%, and payable in three equal annual principal payments of $800,000. On this date, the bank’s prime rate was 11%. The first payment for interest and principal is scheduled for September 1, 2018. At December 31, 2017, Demich should record accrued interest payable of
4. Carlock Company’s salaried employees are paid biweekly. Occasionally, advances made to employees are paid back by payroll deductions. Information relating to salaries for the calendar year 2017 is as follows:
Employee advances $12,000 $ 18,000
Accrued salaries payable 75,000 ?
Salaries expense during the year 650,000
Salaries paid during the year (gross) 625,000
At December 31, 2017, what amount should Carlock report for accrued salaries payable?
5. Close Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had a balance of $480,000 at December 31, 2015 before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of $120,000 at December 31, 2015. Outstanding service contracts at December 31, 2015 expire as follows:
During 2016 During 2017 During 2018
$100,000 $160,000 $70,000
What amount should be reported as unearned service contract revenues in Close’s December 31, 2015 balance sheet?
6. Camacho Trading Stamp Co. records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Camacho’s past experience indicates that only 80% of the stamps sold to licensees will be redeemed. Camacho’s liability for stamp redemptions was $7,500,000 at December 31, 2015. Additional information for 2016 is as follows:
Camacho Trading Stamp service revenue from stamps sold to licensees $5,000,000
Cost of redemptions $3,400,000
If all the stamps sold in 2015 were presented for redemption in 2016, the redemption cost would be $2,500,000. What amount should Camacho report as a liability for stamp redemptions at December 31, 2016?