Essay about Accountancy Final Exam Questions

1015 Words Sep 25th, 2012 5 Pages
1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
Debit Bad Debt Expense $12,000, Credit – Allowance for Doubtful Accounts $12,000

2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
Answer: B - $12,000

3) Intangible assets
Answer: B - should be reported as a separate
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decreases common stock outstanding

21) Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses?
D. $280,000

22) Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?
B. Investing activities section

23) In performing a vertical analysis, the base for cost of goods sold is
B. net sales

24) Blanco, Inc. has the following income statement (in millions):
BLANCO, INC.
Income Statement
For the Year Ended December 31, 2011
Net Sales .............................. $200
Cost of Goods Sold .............................. 120
Gross Profit .............................. 80
Operating Expenses .............................. 44
Net Income .............................. $ 36
Using vertical analysis, what percentage is assigned to Net Income?
C. 18%

25) Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?
C. Cash ...................... $4,500 Common Stock 1,000 Paid-In Capital in Excess of Stated Value 3,500

26) Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock

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