POST ACC111 UNIT 7 CH 9 ,10 AND 11 QUIZES

UNIT 7 CH 9

• Question 1

0 out of 0 points

When recording depreciation, which of the following statements is true?

Total assets increase and stockholders equity increases.

Total assets decrease and total liabilities increase.

Total assets decrease and stockholders equity increases.

Total assets decrease and stockholders equity decreases.

• Question 2

0 out of 0 points

ACME, Inc. uses straight- line depreciation for all of its depreciable assets. ACME sold a piece of machinery on December 31, 2010, that it purchased on January 1, 2009, for $ 10,000. The asset had a five- year life and zero residual value. Accumulated depreciation was $4,000. If the sales price of the used machine was $ 7,500, the resulting gain or loss on disposal was which of the following amounts?

Loss of $ 6,000.

Loss of $ 1,500.

Gain of $ 6,000.

Gain of $ 1,500.

• Question 3

0 out of 0 points

On January 1, 200X Jones Company purchased a machine for $20,000. The machine had a salvage value of $2,000 and a useful life of 5 years. Using straight line depreciation, the accounting entry for recording depreciation expense for 200X would be:

Debit depreciation expense - $3,600, credit accumulated depreciation - $3,600.

Debit depreciation expense - $4,000, credit accumulated depreciation - $4,000.

Debit depreciation expense - $3,600, credit machine - $3,600.

Debit depreciation expense - $4,000, credit machine - $4,000.

• Question 4

0 out of 0 points

On January 1, 200X Jones Company purchased a machine for $10,000. The machine has no salvage value and a useful life of 5 years. Jones uses straight line depreciation. After 4 years the book value of the machine would be?

$10,000

$2,000

$8,000

$5,000.

• Question 5

0 out of 0 points

You purchase a patent for $100,000. The remaining useful life is 10 years. The entry for amortization expense for the first year would be:

Debit patent $100,000 and credit cash $100,000.

Debit patent expense $10,000 and credit cash $10,000.

Debit patent $10,000 and credit cash $10,000.

Debit amortization expense $10,000 and credit patent $10,000.

• Question 1

2 out of 2 points

Which of the following is not capitalized when a piece of production equipment is acquired for a factory?

Sales taxes.

Installation costs.

Transportation costs.

Ordinary repairs.

• Question 2

2 out of 2 points

On January 1, 200X Post Company purchased a machine for $80,000. The machine had a salvage value of $8,000 and a useful life of 10 years. Using straight line depreciation, the accounting entry for recording depreciation expense for the second year of operation would be:

Debit depreciation expense - $7,200, credit accumulated depreciation - $7,200.

Debit depreciation expense - $8,000, credit accumulated depreciation - $8,000.

Debit depreciation expense - $8,000, credit machine - $8,000.

Debit depreciation expense - $4,000, credit machine - $4,000.

• Question 3

2 out of 2 points

Post Company uses straight- line depreciation for all of its depreciable assets. Post sold a piece of machinery on December 31, 2009, that it purchased on January 1, 2009 for $ 2,000. The asset had a five- year life and zero residual value. Accumulated depreciation was $400. If the sales price of the used machine was $ 1,200, the resulting gain or loss on disposal was which of the following amounts?

Loss of $ 400.

Loss of $800

Gain of $400

Gain of $ 1,200.

• Question 4

2 out of 2 points

Post Company purchased a patent on January 1, 200X for $50,000. The patent has a useful life of 10 years. The accounting entry to record the patent amortization expense for the first year would be:

Debit patent amortization expense $50,000; credit patent $50,000.

Debit patent amortization expense $5,000; credit patent $5,000.

Debit patent $50,000; credit accounts payable $50,000.

Debit patent $5,000; credit accounts payable $5,000.

UNIT 7 CH 10

• Question 1

0 out of 0 points

Assume that Warnaco Group Inc. the makers of Calvin Klein underwear, borrowed $ 100,000 from the bank to be repaid over the next five years, with principal payments of $20,000 each year. Warnaco should report this item as:

$100,000 should be reported as a long- term liability.

$80,000 should be reported as a long- term liability and $20,000 as a current liability.

$100,000 should be reported as a long- term asset.

$80,000 should be reported as a long- term asset and $20,000 as a current asset.

• Question 2

0 out of 0 points

On April 1, 200X you enter into a note payable of $100,000 with a 9% annual interest rate. Your interest expense for 200X will be:

$9,000

$750

$6,750

$6,000

• Question 3

0 out of 0 points

Jones Company issues a 10 year, 8%, $400,000 bond at par on July 31. The journal entry would be:

A debit to cash of $400,000 and a credit to bonds payable of $400,000.

A debit to bonds payable of $400,000 and a credit to cash of $400,000.

A debit to cash of $400,000 and a credit to bonds receivable of $400,000.

A debit to bonds receivable of $400,000 and a credit to cash of $400,000.

• Question 4

0 out of 0 points

Jones Company issues a 10 year, 8%, $400,000 bond at par on July 31. How much interest will be paid over the life of the bond?

$40,000

$4,000

$320,000

$32,000

• Question 1

2 out of 2 points

On July 1, 200X you enter into a note payable of $200,000 with a 5% annual interest rate. Your interest expense for 200X will be:

$10,000.

$2,500

$2,000

$5,000

• Question 2

0 out of 2 points

Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. The journal entry would be:

A debit to cash of $200,000 and a credit to bonds payable of $200,000.

A debit to bonds payable of $200,000 and a credit to cash of $200,000.

A debit to cash of $200,000 and a credit to bonds receivable of $200,000.

A debit to bonds receivable of $200,000 and a credit to cash of $200,000.

• Question 3

2 out of 2 points

Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. How much interest will be paid over the life of the bond?

$4,000

$6,000

$12,000

$72,000

• Question 4

2 out of 2 points

A company has current assets of $500,000, net income of $10,000, current liabilities of 250,000 and equity of $250,000. What is the current ratio?

0.5

7.5

0.3

2.0

• Question 5

2 out of 2 points

If a company has gross salaries of $12,000 and it withholds $1,800 for income taxes and $800 for FICA taxes, the journal entry to record the employee’s pay should include:

Debit to salary expense for $9,400

Debit to salary payable for $9,400

Credit to salary payable for $9,400

Credit to cash for $12,000

• Question 1

2 out of 2 points

On July 1, 200X you enter into a note payable of $200,000 with a 5% annual interest rate. Your interest expense for 200X will be:

$10,000.

$2,500

$2,000

$5,000

• Question 2

0 out of 2 points

Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. The journal entry would be:

A debit to cash of $200,000 and a credit to bonds payable of $200,000.

A debit to bonds payable of $200,000 and a credit to cash of $200,000.

A debit to cash of $200,000 and a credit to bonds receivable of $200,000.

A debit to bonds receivable of $200,000 and a credit to cash of $200,000.

• Question 3

2 out of 2 points

Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. How much interest will be paid over the life of the bond?

$4,000

$6,000

$12,000

$72,000

• Question 4

2 out of 2 points

A company has current assets of $500,000, net income of $10,000, current liabilities of 250,000 and equity of $250,000. What is the current ratio?

0.5

7.5

0.3

2.0

• Question 5

2 out of 2 points

If a company has gross salaries of $12,000 and it withholds $1,800 for income taxes and $800 for FICA taxes, the journal entry to record the employee’s pay should include:

Debit to salary expense for $9,400

Debit to salary payable for $9,400

Credit to salary payable for $9,400

Credit to cash for $12,000

UNIT 7

CH 11

• Question 1

0 out of 0 points

Post Company issues 100,000 shares of $10 par value stock for $18 a share. The accounting entry for this transaction would be:

Debit cash -$1,000,000 and credit Capital Stock - $1,000,000.

Debit cash -$1,800,000 and credit Capital Stock - $1,800,000.

Debit cash -$1,800,000 and credit Capital Stock - $1,000,000, credit Additional Paid in Capital $800,000.

Debit cash -$1,000,000, debit Additional Paid in Capital Stock - $800,000 and credit Capital - $1,800,000,

800,000

• Question 2

0 out of 0 points

Dividends become a liability of the corporation:

On the date the board of directors declares the dividend.

On the date of record.

On the date payment is made.

When preferred dividends have not been paid.

• Question 3

0 out of 0 points

On January 1, 200X XYZ Company declared a cash dividend of .50 per share. On January 1 they will make the following journal entry:

Debit cash and credit dividends payable.

Debit dividends declared and credit dividends payable.

Credit cash and debit dividends declared.

Debit expense and credit cash.

• Question 1

2 out of 2 points

Post Company issues 10,000 shares of $5 par value common stock for $20 a share. The accounting entry for this transaction would be:

Debit cash -$200,000 and credit Common Stock - $200,000.

Debit cash -$50,000 and credit Common Stock - $50,000.

Debit cash -$200,000, debit Additional Paid in Capital - $50,000 and credit Common Stock - $200,000,

Debit cash -$200,000 and credit Common Stock - $50,000, credit Additional Paid in Capital - $150,000.

• Question 2

2 out of 2 points

Dividends become a liability of the corporation:

On the date the board of directors declares the dividend.

On the date of record.

On the date payment is made.

When preferred dividends have not been paid.

• Question 3

2 out of 2 points

XYZ Company has 100,000 shares of stock outstanding. On January 1, 200X XYZ Company declared a cash dividend of .50 per share to be paid on January 31. On January 1 XYZ Company will make the following journal entry:

Debit cash $50,000 and credit dividends payable $50,000.

Debit dividends declared $50,000 and credit dividends payable $50,000.

Credit cash $50,000and debit dividends declared $50,000.

No entry is made until January 31.

• Question 4

2 out of 2 points

Which of the following will result when a dividend is paid?

A credit to dividends payable.

A debit to dividends payable.

A debit to capital.

A credit to capital.

• Question 5

2 out of 2 points

In its most basic form, the Earnings per Share (EPS) ratio is calculated as:

Dividends paid on common stock divided by the average number of shares outstanding of common stock.

Net income divided by the average number of shares outstanding of common stock.

Net income divided by average stockholder’s equity.

Sales divided by average stockholder’s equity.