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Summary full accounting exam with solutions
- Course
- BUS-A 100
- Institution
- Indiana University-Bloomington
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A100 Final ExamSpring 1, 2018 - First 8 WeeksExam Version 01Fill in the information below. Write clearly:Name (print): IU User Name:Class Day & Time:Course Section #:There are 34 multiple-choice questions on this exam. Be sure your exam is complete.You have two hours to finish the exam.For each question, select the best answer from among the alternatives provided. In ordet otreceive credit for your answers, you must use pencil on the machine-readable answer sheetprovided. Answers on the exam itself will not be considered in grading the exam.Fill in (and bubble) the following sections on the left side of the Scantron:Name (Last, first, middle initial)User nameVersion (01, 02, 03, or 04)Section number (The proctor will provide this to you)You may not have notes, scrap paper, or calculators other than Sharp EL-233S (or EL-233SB)with you while taking this exam. No pencil boxes or cases are allowed. Phones and smart watches mustbe put away and kept out of sight during the exam.You may have with you during the exam only your ID, pencils and an eraser, and the A100-approvedcalculator. When you complete the exam, place your answer sheet behind your exam and turn boththe exam and the answer sheet in to the exam proctor as you leave the room.NO EXAM MATERIALS MAY LEAVE THIS ROOM.Failure to turn in all exam materials or having other materials while taking the test is a violation ofthe Honor Code.Your signature below indicates you have read and will follow the above instructions:Signature: 1 1Which of the following is true of the FASB?aIt is responsible for GAAP.bIt is responsible for auditing the auditors of publicly-traded companies once a year.cIt is responsible for IFRS.dIt is responsible for auditing all publicly-traded companies once a year.eIt is an organization of internal auditors of publicly-traded companies.2Sarbanes-Oxley came about at least partially as a result ofathe newly-enacted IASB requirements.bthe federal income tax when it became law in 1913.cprivately-held companies over-issuing stock.dthe fraud that occurred at Enron.ethe differences in the accounting standards between GAAP and IFRS.3What has the SEC required to be included in every publicly-traded company's annual financial statementsince 1934?aSummary sheetbWelcome sheetcIndependent auditor's opiniondInternal auditor's annual report on statuseSummary of managerial accounting systems used4Which of the following is true of managerial accounting?aCompanies must follow the rules established by either GAAP or IFRS in preparing managerialaccounting statements.bA company's managerial accounting information is typically distributed to suppliers and competitors.cManagerial accounting is focused only on the results of prior period operations.dManagerial accounting information is only expressed in terms of currency.eNone of the above are true.5Yarrow, Inc. produces a product which it sells for $6. Yarrow's total cost per unit is $4 when it sells2,400 units, and at that level of production its costs are 25% variable and 75% fixed. Approximatelyhow much does the company need in total sales dollars to earn $12,000 net income?a$25,600 b$14,400 c$23,040 d$24,000 eNone of the above6Verbena Corp. has a contract to sell 50 units of its product for a total of $8,000. At this level ofproduction, Verbena's total cost is $6,000 and 20% of this total cost is fixed. Verbena's customer wantsto reduce the number it purchases to 40 units. What would be Verbena's total cost per unitat this reduced level of production?a$150b$120c$126d$112eNone of the above7Alyssum, Inc. produces rotary saws. Its sales price is $130 per unit, its variable cost per unit is $20,and its net income when it sells 1,200 units is $4,000. How many units does Alyssum need to sell to 2 earn $5 net income per unit?a1,012 b890 c1,245 d1,219 e1,205 8Which of the following is a period cost in a manufacturing firm?aUtility expense for the factorybWages paid to the fork lift drivercDirect materials used in productiondSalesmen's commissionseNone of the above are period costs.9Ranunculus Co. sells one product for $6 per unit. During the year Ranunculus had total fixed costs of$42,000 and net income of $30,000. Its variable cost per unit is $1.50. How many units did Ranunculus sell during the year?a16,000 b16,667 c18,250 d17,750 eNone of the aboveUse the following information to answer questions 10 and 11:Marigold Company produces a product which has a sales price of $12. The variable cost per unit is $3, and the total fixed cost is $36,000.10How much will Marigold have in total variable costs if it can get its net income up to $40,000?a$19,000 b$25,333c$21,200d$23,000eNone of the above11How much will Marigold need in total sales dollars to breakeven if the cost of its direct materials goes upand increases the variable cost to $4 per unit?a$54,000 b$48,000 c$92,000 d$56,000 eNone of the above12Mirabilis, Inc. hopes to earn $10,000 net income on the sale of its only product. It expects that variable cost per unit will be $4, and the total fixed cost will be $88,000. If Mirabelis predicts it can sell 8,000 units, what should the sales price per unit be?a$18.00 b$16.25 c$24.00 d$21.50 eNone of the above13The owners of Lobella Company are trying decide how to form their new business. They want to havelegal protection for their personal assets, and they do not want the income of the business to be subjectto double taxation. Which types of companies would be their best options?aS Corporation or Regular CorporationbPartnership, S Corporation, or Limited Liability CompanycPartnership, Regular Corporation, or Limited Liability CompanydRegular Corporation or Limited Liability CompanyeS Corporation or Limited Liability Company14Impatiens, Inc. is considering making an investment in a large piece of equipment. Impatiens expectsthe equipment will earn $14,000 net income before taxes per year. The equipment costs $100,000, 3 and the company expects it will last for 10 years and then be worthless. Impatiens is in the 25% taxbracket. What would you expect Impatiens cash flow after taxes to be on this piece of equipment?a$3,000 b$13,000 c$13,500 d$20,500 eNone of the aboveUse the following tax table to answer questions 15 and 16:If Taxable Income is:The Tax is:ThisPlusOf the amountOver:But not over:Amount:this %:over:$0 $50,000 $0 15%$0 $50,000 $75,000 $7,500 25%$50,000 $75,000 $100,000 $13,750 34%$75,000 $100,000 $335,000 $22,250 39%$100,000 15Hepatica, Inc. had tax credits for the year totalling $12,000. The company had deductions of $140,000,exclusion of $2,000, and gross income realized of $230,000. How much does Hepatica owe in tax?a$1,750 b$9,315 c$6,170 d$21,315 eNone of the above16Gaura Company had the following partial income statement for the year. How much is Gaura'snet income?Fee income$96,000 Wages expense($26,000)Advertising expense($12,000)Entertainment expense($8,000)Insurance expense($6,000)Penalties expense($4,000)Income tax expense?Net income?a$63,200 b$32,800 c$36,800 d$59,200 eNone of the above17Foxglove Company had net income of $72,000 for 2017. During the year Foxglove had penaltiesof $1,000, an exclusion of $5,000, total entertainment expense of $6,000, and income tax expense of$8,000. How much was Foxglove's taxable income for 2017?a$79,000 b$89,000 c$84,000 d$65,000 eNone of the above18Lantana, Inc. bought $65,000 of inventory during 2017. All of this was paid for during 2017 except for$3,000, which will be paid in January of 2018. At Jan. 1, 2017, Lantana had $6,000 in inventory, and atDecember 31, 2017, it had $2,500 in inventory. How much was Lantana's inventory turnover during2017?a15.3b15.4c16.5d16.1eNone of the above19The cost of equipment minus accumulated depreciation at the end of the year is called 4The benefits of buying summaries with Stuvia:
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