ACCOUNTING

Acct 311 (7982), Fall, 2017

Professor: Leon Hutton, CPA, CGFM, MBA, MA

Student: _____________________ Due: Sunday, November 12, 2017 by 11pm (EST)

Administrative Notes:

· 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.

· Work the questions carefully, take your time, do not rush, go back and check your work, keep track of the due date and time –

· 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:

Component Points
20 multiple choice questions – 4 points each. 80
Problems 1 to 4 are worth 5 points each for a total of 20 points. 20
Total Points 100

MULTIPLE CHOICE.

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

a. $58,000.

b. $54,000.

c. $64,000.

d. $96,000

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:

12/31/16 12/31/17

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?

a. $100,000.

b. $84,000.

c. $92,000.

d. $55,000.

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?

a. $360,000.

b. $330,000.

c. $240,000.

d. $220,000.

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?

a. $9,100,000.

b. $6,600,000.

c. $6,100,000.

d. $4,100,000.

Use the following information for questions 7 and 8:

On January 1, 2016, Daley Co. issued eight-year bonds with a face value of $1,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:

Present value of 1 for 8 periods at 6% .627

Present value of 1 for 8 periods at 8% .540

Present value of 1 for 16 periods at 3% .623

Present value of 1 for 16 periods at 4% .534

Present value of annuity for 8 periods at 6% 6.210

Present value of annuity for 8 periods at 8% 5.747

Present value of annuity for 16 periods at 3% 12.561

Present value of annuity for 16 periods at 4% 11.652

7. The present value of the principal is

a. $534,000.

b. $540,000.

c. $623,000.

d. $627,000.

8. The present value of the interest is

a. $344,820.

b. $349,560.

c. $372,600.

d. $376,830.

9. The term used for bonds that are unsecured as to principal is

a. junk bonds.

b. debenture bonds.

c. indebenture bonds.

d. callable bonds.

10. Best, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten

years from date of issue. If the bonds were issued at a premium, this indicates that

a. the effective yield or market rate of interest exceeded the stated (nominal) rate.

b. the nominal rate of interest exceeded the market rate.

c. the market and nominal rates coincided.

d. no necessary relationship exists between the two rates.

11. The rate of interest actually earned by bondholders is called the

a. stated rate.

b. yield rate.

c. effective rate.

d. effective, yield, or market rate.

12. In a corporate form of business organization, legal capital is best defined as

a. the amount of capital the state of incorporation allows the company to accumulate over its existence.

b. the par value of all capital stock issued.

c. the amount of capital the federal government allows a corporation to generate.

d. the total capital raised by a corporation within the limits set by the Securities and Exchange Commission.

Order now and get 10% discount on all orders above $50 now!!The professional are ready and willing handle your assignment.

ORDER NOW »»