Day 17

Question 1

ABC has 20k of $5 9% preferred stock and 100k of $2 common stock. They announce a $30k dividend. How much should be allocated?

Answer 1

Preferred = $10,000
20,000 × $5 × .09 = $9,000

Common = $20,000
100,000 × $2 × .09 = $18,000

EXCESS DIV ARE SPLIT TO RELATIVE CAPITALIZATION

Preferred = 100,000 / 300,000 = 33.33%

MCQ-05101

Question 2

Treasury stock is considered “reissued” only when the reissue price is above the repurchase price. True or False?

Answer 2

False

The firm who purchases their own stock can reissue it at any price they want

MCQ-00875

Question 3

ABC had a credit balance of $12k in allowance for Uncollectible accounts at 12/31/22. During the year two $48k was written off. The Allowance for Uncollectible at the end of year two should be $50k. What is the Uncollectible account expense?

Answer 3

Beg Allowance: 12,000
PLUS: Uncollectible Expense xxx
Less: Write offs (48,000)

= Ending Allowance 50,000

86,000

MCQ-05654

Question 4

When must the lower of cost or net realizable value be applied?

Answer 4

1. LCNRV must be applied to all items of inventory, WIP, Raw Materials, Finished Goods, everything
2. LCNRV must be applied when FIFO cost Flow assumption is used

MCQ-04490

Question 5

I’m the final year of an asset how is the deferred tax liability removed?

Answer 5

The deferred tax liability is a temporary difference and when the asset is fully depreciated the deferred tax liability is removed by a debit

MCQ-07901

Question 6

How is the liability calculated for an Asset Retirement Obligation?

Answer 6

PV of the future obligation

MCQ-08732

Question 7

A NFP organization received $190,000 in Pledges at year end. The organization estimates 8% will be uncollected. Assuming all Pledges are legally enforceable, what is net pledges receivable?

Answer 7

190,000 × (1 - .08) = 174,800

MCQ-07920

Question 8

Bond issuance costs are _____ from the initial bond liability when issued.

Answer 8

SUBTRACTED

MCQ-00632

Question 9

When must the 10-Q be filled for large accelerated filers and accelerated filers?

Answer 9

40 days

MCQ-09007

Question 10

In periods of rising prices, what inventory costing method will provide the lowest ending inventory?

Answer 10

Dollar-Value LIFO

Pushes the most expensive (most recent) items through COGS and the earlier items that were purchased at lower prices provide a lower ending inventory

Question 11

What is the equation for Gross Profit?

Answer 11

Sales - COGS = Gross Profit

Question 12

How should an understated revenue be corrected in the income statement?

Answer 12

By increasing the current period’s revenues

This should be corrected by increasing the current period’s revenues to reflect the actual amount earned

Question 13

What is the purpose of reporting comprehensive income?

Answer 13

To summarize all changes in equity from nonowner sources

MCQ-15680

Question 14

A machine with a 5-year estimated useful life and an estimated 10% salvage value was acquired on Jan 1, Year 1. On Dec 31, Year 4, A/D, using the Sum-Of-The-Years’ Digits method, would be:

Answer 14

(Original Cost LESS Salvage Value) multiplied by 14/15

MCQ-00385

Question 15

Accounts Payable - Net Method:

Answer 15

AP is recorded net of the discount, if pmt is made within the discount period, No Adjustment is Needed

MCQ-00617

Question 16

What are Cash flow Financing Activities:

Answer 16

1. Non-Current Liability (Creditor-Oriented) Activities
   - Issuing Bonds, Notes, and other borrowings (cash inflow)
   - Payments of PRINCIPAL on amounts borrowed (cash outflow)
2. Equity (Owner-Oriented) Activities
   - Issuing Stock (cash inflow)
   - Paying CASH Dividends or Repurchasing Stock (cash outflow)

MCQ-08254