ACCT 301 Final Examination Answers – UMUC
On April 1, 20X6, Ratchford Industries issued $500,000 of 12%, 10-year bonds. The
bonds, which were issued at 103, pay interest on October 1 and April 1. The entry to
record issuance of the bonds includes:
When interest income on a bond investment is less than the cash received:
Stringer Corporation issued 5,000 shares of $2 par value common stock. The issue
price was $7.50 per share. The entry to record this transaction includes a:
A. debit to Cash for $10,000.
B. debit to Paid-in Capital in Excess of Par for $27,500.
C. debit to Common Stock for $10,000.
D. credit to Gain on Stock $37,500.
E. None of these.
(True or False)
The presence of goodwill in a balance sheet suggests that accounts of the subsidiary have not yet been consolidated with the parent company.
Which formula ‘calculates’ the return on assets ratio?
In an effort to concentrate its resources in more profitable areas, Southern Steel Corporation recently sold its family pizza restaurant segment. The disposal constitutes:
Assuming use of the direct approach for preparing a statement of cash flows, which of the following would be most likely reported as a line item in the ‘operating activity’ section?
Finished goods ending inventory of $10,000 is erroneously determined to be $100,000. The effect of this error will be to:
On May 21, Vincent worked 6 hours on Job 657, and 2 hours on general ‘overhead activities.’ Vincent is paid $15 per hour. Overhead is applied based on $4 per direct labor hour. Job 657 also entailed $30 of direct material. On May 21, Vincent used $7 of indirect material. Indirect material is included in the overhead application rate. Of these amounts, how much total cost should be allocated to Job 657 for May 21?
Jose Company uses a job order cost system. At the end of an accounting period, Jose has a debit balance in the Factory Overhead account. This would indicate:
If beginning work in process was 600 units, 1,400 additional units were put into production, and ending work in process was 500 units, how many units were completed?
Which of these alternatives would decrease contribution per unit margin the most?
Each of the following would affect the breakeven point except a change in the:
Anticipated unit sales are January, 5,000; February, 4,000; and March 8,000. Finished goods are consistently maintained at 80% of the following month’s sales. If units cost $10 each to produce, how much is February’s total cost of production?
Which of the following is one of the purposes of standard costs?
How is a labor rate variance computed?
Which of the following decisions would necessarily result in an increase in profit or decrease in loss?
In calculating the controllable contribution margin, fixed costs should be subtracted from the contribution margin:
In considering a special order situation that will enable a company to make use of presently idle capacity, which of the following costs would be irrelevant?
The type of costs presented to management for an equipment replacement decision should be limited to: