Confirmed at the Meeting of the Department of Socio-Economic Disciplines

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 1

on the discipline “Financial Accounting”

for the 3rd year students

What are cash equivalent?
Jacobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank on April 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.
Georgia Products Co. had the following positive cash flows during the current year: received cash from customers of $ 750,000; received bank loans of $ 35,000; and received cash from the sale of common stock of $ 145,000. During the same year, cash was paid out to purchase inventory for $ 335,000, to employees for $ 230,000, and for the purchase of plant assets of $ 190,000. Calculate the amount of cash provided by or used for operating activities by the direct method.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 2

on the discipline “Financial Accounting”

for the 3rd year students

What is a capital expenditures?
Alpha Co sold 10000 shares of common stock, which has a par value of $ 10, for $13 per share. The company’s balance in retained earning is $75000. Prepare the stockholders’ equity section of the company’s balance sheet.
Assume that the following information relates to your most recent bank statement dated September 30:

Balance per bank statement at September 30: ………………………………….$3400

Checks written that had not cleared the bank as of September 30:

#203 University tuition $1,500
#205 University bookstore 350
#208 Rocco's pizza 25
#210 Stereo purchase 425
#211 October apartment rent 500

Interest amounting to $4 was credited to your account by the bank in September. The bank's service charge for the month was $5. In addition to your bank statement, you received a letter from your parents on October 2 informing you that they had made a $2,400 electronic funds transfer directly into your account. After reading your parents' letter, you looked in your checkbook and discovered its balance was $601. Adding your parents' deposit brought that total to $3,001.

Prepare a bank reconciliation to determine your correct checking account balance. Explain why neither your bank statement nor your checkbook shows this amount.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 3

on the discipline “Financial Accounting”

for the 3rd year students

Differences between current and long-term liabilities.
A company had the following positive and negative cash flows during the current year

Positive Cash Flows:

Received from Customers - $180,000

Interest & Dividends - $60,000

Sale of plant assets - $220,000

Negative Cash Flows

Paid to suppliers and employees - $80,000

Purchase of Investments - $25,000

Purchase of treasury stock - $47,000

Determine the amount of cash used for or provided by for operating activities by the direct method.

Smart Hardware purchases new shelving for its store on April 1, 2009. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase:

Cost of the shelving………………………………$12,000

Freight charges……………………………………..$520

Sales taxes………………………………………….$780

Installation……………………………………… $2,700

Cost to repair shelf damaged during installation….$400

Instructions

Compute depreciation expense for the year 2009 through 2012, 200% declining-balance

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 4

on the discipline “Financial Accounting”

for the 3rd year students

Stockholders prefer to invest in preferred stock because…
Many companies hold a significant portion of their financial assets in the form of marketable securities. For example, Microsoft Corporation recently reported investments in marketable securities totaling $ 14.5 billion, an amount equal to 38 percent of its total financial assets. In contrast, only 24 percent of its financial assets were in the form of accounts receivable.
Define marketable securities ( also referred to as short- term investments). What characteristics of these securities justify classifying them as financial assets?
Cronan, Inc., sells $1,000,000 general obligation bonds for 98. The interest rate on the bonds, paid quarterly, is 6 percent. Calculate the amount that the company will actually receive from the sale of the bonds. Calculate the amount of both the quarterly and the total annual cash interest that the company will be required to pay

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 5

on the discipline “Financial Accounting”

for the 3rd year students

In what case we spend cash?
Starlight a Broadway media firm uses the balance sheet approach to estimate uncollectible accounts expense. At year- end an aging of the accounts receivable produced the following five groupings:

a. Notyetdue…………………………………………… / $500,000
b. 1-30 dayspastdue…………………………………… / 110,000
c. 31-60 dayspastdue……………………………………. / 50,000
d. 61-90 dayspastdue……………………………………. / 30,000
e. over 90 days past due………………………………….. / 60,000
Total………………………………………………………. / $750,000

On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age group to be as follows: Group a, 1 Percent; Group b, 3 Percent; Group c, 10 Percent; Group d, 20 percent; and Group e, 50 Percent.

The Allowance for doubtful accounts before adjustment at December 31 showed a credit balance of $ 4700.

Reeves, Inc., sold 1000000 share of $25 par value common stock at $30. It subsequently repurchased 100000 of those shares at $50 per share and then sold 70000 of those shares at 55$. Calculate the total amount of stockholders’ equity given the above transactions.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 6

on the discipline “Financial Accounting”

for the 3rd year students

What is the income statement?
Swanson & Hiller, Inc., purchased a new machine on September 1, 2006, at cost of $108,000. The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $8,000.

Instructions

Prepare a complete depreciation schedule, beginning with calendar year 2006 .Straight-line method.

Pearl Company sells $ 1,000,000 general obligation bonds for 101. The interest rate on the bonds, paid quarterly, is 5 percent. Calculate the amount that the company will actually receive from the sale of the bonds, and the amount of both the quarterly and the total annual cash interest that the company will be required to pay.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 7

on the discipline “Financial Accounting”

for the 3rd year students

. Explain what amount is recorded in the additional paid-in capital account when stock is issued.

2. Texas, Inc., sold common stock for $560,000 and preferred stock for $36,000 during the current year. In addition, the company purchased treasury stock for $35,000 and paid dividends on common and preferred stock for $24,000.

Determine the amount of cash provided by or used for financing activities during the year

3. Magnum Plus, Inc., is a manufacturer of hunting supplies. The following is a summary of the company's annual payroll-related costs:

Wages and salaries expense (of which $2,200,000 was withheld
from employees' pay and forwarded directly to tax authorities) / $ 7200000
Payrolltaxes / $ 580 000
Workers' compensationpremiums / $ 250 000
Grouphealthinsurancepremiums / $725000
Contributions to employees' pension plan / $ 450000

Compute Magnum’s total payroll-related costs for the year.
Compute the net amount of cash actually paid to employees (their take-home pay)

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 8

on the discipline “Financial Accounting”

for the 3rd year students

Main categories of CF statement
Super Star, a Hollywood publicity firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings:

a. Not yet due…………………………………………….. / $500,000
b. 1-30 days past due…………………………………… / 210,000
c. 31-60 days past due……………………………………. / 80,000
d. 61-90 days past due……………………………………. / 15,000
e. over 90 days past due………………………………….. / 30,000
Total………………………………………………………. / $835,000

The Allowance for doubtful accounts before adjustment at December 31 showed a credit balance of $ 11,800.

Instructions

Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount.
Assume that on January 10 of the following year, Super Star learned that an account receivable that had originated on September 1 in the amount of $8,250 was worthless because of the bankruptcy of the client, April Showers. Prepare the journal entry required on January 10 to write off this account.

During the current year, Black Corporation incurred the following expenditures which should be recorded either as operating expenses or as intangible assets:

Expenditures were made for the training of new employees. The average employee remains with the company for 5 years, but is trained for a new position every two years.
Black purchased a controlling interest in a vinyl flooring company. The expenditure resulted in the recording of a significant amount of goodwill. Black expects to earn above-average returns on this investment indefinitely.
Black incurred large amounts of research and development costs in developing a dirt-resistant carper fiber. The company expects that the fiber will be patented and that sales of the resulting products will contribute to revenue for at least 25 years. The legal life of the patent, however, will be only 20 years.
Black made an expenditure to acquire the patent on a popular carpet cleaner. The patent had a remaining legal life of 14 years, but Black expects to produce and sell the product for only six more years.
Black spent a large amount to sponsor the televising of the Olympic Games. Black’s intent was to make television viewers more aware of the company’s name and its product lines.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 9

on the discipline “Financial Accounting”

for the 3rd year students

Plant and equipment items are often classified into the following groups:…….
When Resisto Systems, Inc., was formed, the company was authorized to issue 5,000 shares of $100 par value, 8 percent cumulative preferred stock, and 100,000 shares of $2 stated value common stock.

Half of the preferred stock was issued at a price of $103 per share, and 70,000 shares of the common stock were sold for $13 per share. At the end of the current year, Resisto has retained earnings of $382,000.

Prepare the stockholders’ equity section of the company’s balance sheet at the end of the current year?

During the fiscal year ended December 31, Swanlee Corporation engaged in the following transactions involving notes payable:

July. 1 / Borrowed $20,000 from Weston Bank, signing a 90-day, 12 percent note payable.
Sep.16 / Purchased office equipment from Moontime Equipment. The invoice amount was $30,000, and Moontime agreed to accept, as full payment, a 10 percent, three-month note for the invoice amount.
Oct. 1 / Paid Weston Bank the note plus accrued interest.
Dec. 1 / Borrowed $100,000 from Jean Will, a major corporate stockholder. The corporation issued Will a $100,000, 9 percent, 120-day note payable.
Dec. 1 / Purchased merchandise inventory in the amount of $10,000 from Listen Corporation. Listen accepted a 90-day, 12 percent note as a full settlement of the purchase. Swanlee Corporation uses a perpetual inventory system.
Dec. 16 / The $30,000 note payable to Moontime Equipment matured today. Swanlee paid the accrued interest on this note and issued a new 60-day, 16 percent note payable in the amount of $30,000 to replace the note that matured.

Instructions

a. / Prepare journal entries (in general journal form) to record the above transactions. Use a 360-day year in making the interest calculations.
b. / Prepare the adjusting entry needed at December 31, prior to closing the accounts. Use one entry for all three notes (round to the nearest dollar).

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 10

on the discipline “Financial Accounting”

for the 3rd year students

Describe the types of cash payments summarized by the caption “cash paid to suppliers and employees”.
The cash transactions and cash balances of Dodge inc., for November were as follows:

The ledger account for Cash showed a balance at July 30 of $ 6 750.
The November bank statement showed a closing balance of $4710 .
The cash received on November 30 amounted to $3850 . It was left at the bank in the night depository chute after banking hours on November30 and therefore was not recorded by the bank on the November statement.
Also included with the November bank statement was a debit memorandum from the bank for $15 representing service charges for November.
A credit memorandum enclosed with the November bank statement indicated that a non-interest bearing note receivable for $4,000 from Wright Sisters, left with the bank for collection, had been collected and the proceeds credited to the account of Dodge inc
Comparison of the paid cheeks returned by the bank with the entries in the accounting records revealed that check no. 810 for $430, issued November 15 in payment for office equipment, had been erroneously entered in Dodge s records as $ 340.
Examination of the paid cheeks also revealed that three cheeks, all issued in November , had not yet been paid by the bank: no.814 for $115; no.816 for $170; no. 830 for $530.
Included with the November bank statement was a $2900 check drawn by Howard Williams, a customer of Dodge. Inc., This check was marked “NSF.” It had been included in the deposit of November27 but had been charged back against the company’s account on November 31.

Prepare a bank reconciliation statement for Dodge. Inc., at November 30.

Cromley Corporation reports annual sales of $ 1 500 000. Its accounts receivable throughout the year averaged $125000.

Compute the company’s accounts receivable turnover rate.
Compute the average days outstanding of the company’s accounts receivable.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 11

on the discipline “Financial Accounting”

for the 3rd year students

A basic difference between loss contingencies and «real» liabilities is
Johnston, Inc., engaged in the following transactions involving treasury stock:

Feb. 10 Purchased for cash 17,000 shares of treasury stock at a price of $25 per share.

June 4 Reissued 6,000 shares of treasury stock at a price of $33 per share.

Dec. 22 Reissued 4,000 shares of treasury stock at a price of $22 per share.

Prepare general journal entries to record these transactions.
Compute the amount of retained earnings that should be restricted because of the treasury stock still owned at December 31

During the current year, Omega Products Corporation incurred the following expenditures which should be recorded either as operating expenses or as intangible assets:

Expenditures were made for the training of new employees. The average employee remains with the company for 5 years, but is trained for a new position every two years.
Omega Products purchased a controlling interest in a wallpaper company. The expenditure resulted in the recording of a significant amount of goodwill. Omega Products expects to earn above-average returns on this investment indefinitely.
Omega Products incurred large amounts of research and development costs in developing a supervisor product. The company expects that it will be patented and that sales of the resulting products will contribute to revenue for at least 40 years. The legal life of the patent, however, will be only 20 years.
Omega made an expenditure to acquire the patent on a whatsa. The patent had a remaining legal life of 10 years, but Omega expects to produce and sell the product for only four more years.
Omega spent a large amount to sponsor the televising of the WorldSeries. Omega’s intent was to make television viewers more aware of the company’s name and its product lines.

Lecturer A. Kaldarova ______

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt ______

namesignature

EXAMINATION CARD № 12

on the discipline “Financial Accounting”

for the 3rd year students

1. What is depreciation?

2. A portion of the stockholders' equity section from the balance sheet of Walland Corporation appears as follows:

Stockholders' equity
Preferred stock, 9% cumulative, $50 par, 40,000 shares authorized, issued and

outstanding……………………………………………………………..………. $2,000,000

Preferred stock, 12% non-cumulative, $100 par, 8,000 shares authorized, issued and outstanding…………………………………………………………..……………. $800,000

Common Stock, $5 par, 400,000 shares authorized, issued & outstanding……. $2,000,000
Total paid in capital- $4,800,000
Assume that all the stock was issued on January 1 and that no dividends were paid during the first two years of operation. During the third year, Walland Corporation paid total cash dividends of $736,000.