Acct 557 quizzes week 1, week 2, week 5, week 6

ACCT 557 Intermediate Accounting III

(DeVry – Winter 2016)

 

ACCT 557 Week 1 Quiz

Question Type:

# Of Questions:

 

Multiple Choice

5

  

Question 1.

Question :

(TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant:

 

Total Construction Fixed Price                 $8,000,000     

Construction Start Date                            March 3, 2012 

Construction Complete Date                    December 4, 2013      

                              

As of Dec 31…                             2012                            2013

Actual cost incurred                      $2,500,000                 $3,150,000 

Estimated remaining costs            $3,750,000                   $-   

Billed to customer                        $2,400,000                   $5,300,000 

Received from customer               $2,250,000                 $5,400,000 

                              

Assuming Platypus Building Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013?

 

Question 2.

Question :

(TCO A) Kerry Corp purchased a used bottling machine from Bob’s Bottling Inc. on Jan 1, 2012 for $2100000.  Bob accounted for the sale correctly under the installment sales method.  It had a book value of $1575000.  Kerry paid with $300000 cash and a note for $1800000 with an annual interest of 10%.  Kerry agreed to make equal annual payments of $600000.  Kerry Corp made their first payment on Jan 1, 2013 of $780000 which included interest of $180000 to date of payment.

 

As of Dec 31, 2013 Bob has deferred gross profit of ?

 

Question 3.

Question :

(TCO A) Blue Suede Construction Corp used the percentage-of-completion method of revenue recognition. They were contracted to build the new amphitheater for $4500000.  Additional information was provided:

                        

As of Dec 31….                                              2012                2013

Percentage of completion                               35%                 60%

Estimated total expected costs                    $3,750,000      $3,900,000 

Gross profit recognized (Cumulative)            $225,000         $300,000 

                        

Contracted costs incurred during 2013 were…

 

Question 4.

Question :

(TCO A) Revenue should NOT be recognized at the time of sale if…

 

Question 5.

Question :

(TCO A) Windsor Construction Company uses the completed contract method of accounting. In 2014, Windsor began work on a two year contract it had received which provided for a contract price of $3,000,000. Other details follow for 2014:

  • Costs incurred during the year $1,400,000
  • Estimated costs to complete as of December 31 2014, $600,000
  • Billings during the year $1,000,000
  • Collections during the year $900,000

What should be the gross profit recognized in 2014?

 

ACCT 557 Week 2 Quiz

 

Question Type:

# Of Questions:

# Correct:

Multiple Choice

5

5

 

Question 1.

Question :

(TCO B)  As a result of differences between depreciation for financial reporting purposes and tax purposes, the financial reporting basis of Noor Co.’s sole depreciable asset, acquired in Year 1, exceeded its tax basis by $250,000 at December 31, Year 1.  This difference will reverse in future years.  The enacted tax rate is 30% for Year 1, and 40% for future years.  Noor has no other temporary differences.  In its December 31, Year 1, balance sheet, how should Noor report the deferred tax effect of this difference?

 

Question 2.

Question :

(TCO B) On its December 31, Year 2, balance sheet, Shin Co. had income taxes payable of $13,000 and a current deferred tax asset of $20,000 before determining the need for a valuation account.  Shin had reported a current deferred tax asset of $15,000 at December 31, Year 1.  No estimated tax payments were made during Year 2.  At December 31, Year 2, Shin determined that it was more likely than not that 10% of the deferred tax asset would not be realized.  In its Year 2 income statement, what amount should Shin report as total income tax expense?

Question 3.

Question :

(TCO B) Justification for the method of determining periodic deferred tax expense is based on the concept of:

Question 4.

Question :

(TCO B) In Year 2, Ajax, Inc. reported taxable income of $400,000 and pretax financial statement income of $300,000.  The difference resulted from $60,000 of nondeductible premiums on Ajax’s officers’ life insurance and $40,000 of rental income received in advance.  Rental income is taxable when received.  Ajax’s effective tax rate is 30%.  In its Year 2 income statement, what amount should Ajax report as income tax expense-current portion?

Question 5.

Question :

(TCO B) When accounting for income taxes, a temporary difference occurs in which of the following scenarios?

 

ACCT 557 Week 5 Quiz

Date Taken: ……………………./2016

Question Type:          # Of Questions:               

Multiple Choice                      5                          

 

Question 1.Question : (TCO E) Which of the following is not a retrospective-type accounting

change?

Question 2.Question : (TCO E) What type of accounting change/correction should always be

accounted for in the current and future accounting periods?

Question 3.Question : (TCO E) On December 31, 2013, Gifts Galore, Inc. appropriately changed

its inventory valuation method from weighted-average cost to FIFO

method for financial statement and income tax purposes. The change will

result in a $1,800,000 increase in the beginning inventory at January 1,

2013. Assume a 40% income tax rate. The cumulative effect of this

accounting change on beginning retained earnings is

Question 4.Question : (TCO E) As of January 1, 2011, Survival Industries, Inc. purchased a boat

at a cost of $490,000.

When purchased, the company was using the double declining

depreciation method.

Key info on the asset at time of purchase is the following.

Estimated useful life is 7 years.

Residual Value is $0.

At the beginning of 2014, the CFO decided to change to straight-line

depreciation method.

Compute the depreciation expense for 2014

Question 5.Question : (TCO E) Mystical Corporation found the following errors in their year-end

financial statements.

As of Dec. 2012 As of

Dec. 2013

Ending Inventory $32,000

understated $46,000 overstated

Depreciation Exp. $7,000 understated

On December 31, 2013, a fully depreciated machine was sold for $35,000

but the sale was not recorded until January 15, 2014 when the cash was

received. In 2012, a three-year insurance premium was prepaid for

$45,000 of which the entire amount was expensed in the first year.

There were no other errors or corrections. Ignore any tax considerations.

What is the total net effect of errors on Mystical’s 2013 Retained Earnings?

 

ACCT 557 Week 6 Quiz

Date Taken: …………2016

Question 1.Question : (TCO F) Which of the following would not be disclosed within a statement

of cash flow?

Question 2.Question : (TCO F) Which of the following is not true?

Question 3.Question : (TCO F) Glitter Girl, Inc. recognized net income of $205,000 including

$60,000 in depreciation expense. Additional changes from the balance sheet are as follows.

Accounts Receivable $2,000 decrease

Prepaid Expenses $15,000 decrease

Inventory $36,000 increase

Accrued Liabilities $10,000 decrease

Accounts Payable $40,000 increase

Question 4.Question : (TCO F) Pig Builder’s, Inc. shows the following as of December 31,

2012.

   A –cquired 50% of Wolf Corp’s common stock for $160,000 cash,

which was borrowed from Granny’s Bank.

   Is–sued 5,000 shares of its preferred stock for land having a fair

value of $320,000

   Is–sued 500 of its 11% debenture bonds, due 2017, for $392,000

cash

   P –aid $120,000 toward bank loan.

   P –urchased a patent for $220,000 cash

   S –old available for sales securities for $796,000

   R –ecognized $88,000 net increase in returnable long term customer

deposits

Pig’s net cash provided by investing activities for 2012 is

Question 5.Question : (TCO F) Pig Builder’s, Inc. shows the following as of December 31, 2012.

   A –cquired 50% of Wolf Corp’s common stock for $160,000 cash

which was borrowed from Granny’s Bank.

   Is–sued 5,000 shares of its preferred stock for land having a fair value of $320,000

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