Acct 551 week 1, 3, 5, 7 quizzes

ACCT 551 – Intermediate Accounting II (DeVry)

ACCT 551 Week 1 Quiz

1. Question: (TCO C) The total amount of patent cost amortized to date is usually          
2. Question: (TCO C) When developing computer software to be sold, which of the following costs should be capitalized?    
3. Question: (TCO C) Jeff Corporation purchased a limited-life intangible asset for $120,000 on May 1, 2008. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2010?
4. Question: (TCO C) On January 2, 2011, Klein Co. bought a trademark from Royce, Inc. for $1,000,000. An independent research company estimated that the remaining useful life of the trademark was 10 years. Its unamortized cost on Royce’s books was $800,000. In Klein’s 2011 income statement, what amount should be reported as amortization expense?     
5. Question: (TCO C) The following information is available for Barkley Company’s patents:
Barkley would record a loss on impairment of

ACCT 551 Week 3 Quiz

1. Question : (TCO D) A bond discount should be shown on the balance sheet as:
2. Question : (TCO D) “In-substance defeasance” is a term used to refer to an arrangement whereby
3. Question : (TCO D) On January 1, 2010, Ellison Co. issued eight-year bonds with a face value of $1,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:
4. Question : (TCO D) On January 1, 2010, Crown Company sold property to Leary Company. There was no established exchange price for the property, and Leary gave Crown a $2,000,000 zero-interest-bearing note payable in five equal annual installments of $400,000, with the first payment due December 31, 2010. The prevailing rate of interest for a note of this type is 9%. The present value of the note at 9% was $1,442,000 at January 1, 2010. What should be the balance of the Discount on Notes Payable account on the books of Leary at December 31, 2010 after adjusting entries are made, assuming that the effective-interest method is used?
5. Question : (TCO D) On January 1, 2006, Goll Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to mature on January 1, 2016, but were callable at 101 any time after December 31, 2009. Interest was payable semiannually on July 1 and January 1. On July 1, 2011, Goll called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, Goll’s gain or loss in 2011 on this early extinguishment of debt was

ACCT 551 Week 5 Quiz

1. Question: (TCO E) Stockholders’ equity is generally classified into two major categories:
2. Question: (TCO E) A primary source of stockholders’ equity is (Points : 4)
3. Question: (TCO E) A “secret reserve” will be created if
4. Question: (TCO E) Which of the following represents the total number of shares that a corporation may issue under the terms of its charter? (Points : 4)
5. Question: (TCO E) Norton Company issues 4,000 shares of its $5 par value common stock having a market value of $25 per share, and 6,000 shares of its $15 par value preferred stock having a market value of $20 per share, all for a lump sum of $192,000. What amount of the proceeds should be allocated to the preferred stock?
6. Question: (TCO F) Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011?
7. Question: (TCO F) Colson Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is 1 year in arrears on its preferred stock. How much cash will Colson distribute to the common stockholders?
6,000 x 7% x 100 = $42,000 owed to preferred shareholders each year.
160,000 – 42,000 preferred dividends in arrears – 42,000 preferred current dividends =
A. $76,000. (Points : 4)
8. (TCO F) Written, Inc. has 300,000 outstanding shares of $2 par common stock and 60,000 shares of no-par 8% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past 2 years and the current year.
Assuming that $63,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive? (Points : 4) 

ACCT 551 Week 7 Quiz

1. Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.
For the year ended December 31, 2011, Patton Company should report interest revenue from the Scott Co. bonds of (Points : 4)
2. (TCO B) On October 1, 2010, Menke Co. purchased (to hold to maturity) 200, $1,000, 9% bonds for $208,000. An additional $6,000 was paid for accrued interest. Interest is paid semiannually on December 1 and June 1, and the bonds mature on December 1, 2014. Menke uses straight-line amortization. Ignoring income taxes, the amount reported in Menke’s 2010 income statement from this investment should be (Points : 4)
3. (TCO B) On its December 31, 2010 balance sheet, Calhoun Company appropriately reported a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account. There was no change during 2011 in the composition of Calhoun’s portfolio of marketable equity securities held as available-for-sale securities. The following information pertains to that portfolio:…………………
What amount of unrealized loss on these securities should be included in Calhoun’s stockholders’ equity section of the balance sheet at December 31, 2011? (Points : 4)
4. (TCO B) On December 29, 2011, James Co. sold an equity security that had been purchased on January 4, 2010. James owned no other equity securities. An unrealized holding loss was reported in the 2010 income statement. A realized gain was reported in the 2011 income statement. Was the equity security classified as available for sale, and did its 2010 market price decline exceed its 2011 market price recovery?
5. (TCO B) Rich, Inc. acquired 30% of Doane Corp.’s voting stock on January 1, 2010 for $400,000. During 2010, Doane earned $160,000 and paid dividends of $100,000. Rich’s 30% interest in Doane gives Rich the ability to exercise significant influence over Doane’s operating and financial policies. During 2011, Doane earned $200,000 and paid dividends of $60,000 on April 1 and $60,000 on October 1. On July 1, 2011, Rich sold half of its stock in Doane for $264,000 cash. What should be the gain on sale of this investment in Rich’s 2011 income statement? (Points : 4)