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1. The factor that is not relevant in computing depreciation is
 salvage value.
useful life.
 replacement value.
cost.

2. Lincoln Company sells 600 units of a product that has a one-year warranty on parts.
The average cost of honoring one warranty contract is $50. During the year 30 contracts are honored  at a cost of $1,500. It is estimated that 60 contracts will be honored in the following year. The adjusting  entry at the end of the current year will include a
debit to Warranty Expense for $4,500.
credit to Estimated Warranty Liability for $3,000.
credit to Estimated Warranty Liability for $4,500.
debit to Warranty Expense for $1,500.

3. The paid absence that is most commonly accrued is
voting leave.
vacation time.
maternity leave.
 disability leave.

4. Most companies pay current liabilities
by issuing stock.
by creating long-term liabilities.
out of current assets.
by issuing interest-bearing notes payable.

 

1. The entry to record the issuance of an interest-bearing note credits Notes Payable for the note’s
cash realizable value.
maturity value.
market value.
face value.

2. Which one of the following would not be considered an expense of a partnership in determining income for the period?
 Freight-out
Salary allowance to partners
Supplies used
Expired insurance

3. Finney is admitted to a partnership with a 25% capital interest by a cash investment of $90,000. If total capital of the partnership is $390,000 before admitting Finney, the bonus to Finney is
$30,000.
$15,000.
$60,000.
$45,000.

4. Mary Janane’s capital statement reveals that her drawings during the year were $50,000.
She made an additional capital investment of $25,000 and her share of the net loss for
the year was $10,000. Her ending capital balance was $200,000. What was Mary Janane’s beginning capital balance?
 $225,000.
$260,000.
$185,000.
$235,000.

1. The most appropriate basis for dividing partnership net income when the partners do not plan to take an active role in daily operations is
 salaries to the partners and the remainder on a fixed ratio.
 interest on capital balances and salaries to the partners.
 on a ratio based average capital balances.
 on a fixed ratio.

2. The following data is available for BOX Corporation at December 31, 2010:
Common stock, par $10 (authorized 15,000 shares)            $100,000
Treasury Stock (at cost $15 per share)       600
Based on the data, how many shares of common stock are outstanding?
 15,000
 10,000
 14,960
 9,960

3. When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the
stated value of the stock.
book value of the stock.
market value of the stock.
par value of the stock.

4. The two ways that a corporation can be classified by ownership are
 publicly held and privately held.
majority and minority.
stock and non-stock.
inside and outside.

1. On January 2, 2007, Pacer Corporation issued 30,000 shares of 6% cumulative preferred stock at $100 par value. On December 31, 2010, Pacer Corporation declared and paid its first dividend. What dividends are the preferred stockholders entitled to receive in the current year before any distribution is made to common stockholders?
$720,000
$0
$180,000
$540,000

2. The most appropriate basis for dividing partnership net income when the partners do not plan to take an active role in daily operations is
 salaries to the partners and the remainder on a fixed ratio.
 interest on capital balances and salaries to the partners.
 on a ratio based average capital balances.
 on a fixed ratio.

3. Finney is admitted to a partnership with a 25% capital interest by a cash investment of $90,000. If total capital of the partnership is $390,000 before admitting Finney, the bonus to Finney is
$30,000.
$15,000.
$60,000.
$45,000.

4. The entry to record the issuance of an interest-bearing note credits Notes Payable for the note’s
cash realizable value.
maturity value.
market value.
face value.

 

1. When Dimock Construction’s Designer House #10 is completed, Dimock’s
A) work in process is increased.
B) total assets are increased.
C) work in process is decreased.
D) total assets are decreased.

2. The total of the dollar amounts on the job order cost cards that have not been completed would be equal to the
A) cost of goods completed.
B) balance in the Finished Goods Inventory account.
C) Cost of Goods Sold account.
D) balance in the Work in Process Inventory account.

3. Costs assigned to the building of a house should appear on the income statement when
A)  the house is completed.
B) the house is sold.
C) the purchase order to manufacture the house is received.
D) cash is collected for the sale of the house.

4. The basic document for keeping track of costs in a job order costing system is a
A) job order cost card.
B)  labor time card.
C) process cost report.
D) materials requisition form.