國立彰化師範大學九十三學年度碩士班招生考試試題
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第 1 頁，共 10 頁
PART I
A. Multiple choice. 50 points.
1.
The information provided by financial reporting pertains to
a. individual business enterprises, rather than to industries or an economy as a whole or to members of
society as consumers.
b. business industries, rather than to individual enterprises or an economy as a whole or to members of
society as consumers.
c. individual business enterprises, industries, and an economy as a whole, rather than to members of
society as consumers.
d. an economy as a whole and to members of society as consumers, rather than to individual
enterprises or industries.
2.
Decision makers vary widely in the types of decisions they make, the methods of decision making they
employ, the information they already possess or can obtain from other sources, and their ability to
process information. Consequently, for information to be useful there must be a linkage between these
users and the decisions they make. This link is
a. relevance.
b. reliability.
c. understandability.
d. materiality.
3.
Application of the full disclosure principle
a. is theoretically desirable but not practical because the costs of complete disclosure exceed the
benefits.
b. is violated when important financial information is buried in the notes to the financial statements.
c. is demonstrated by the use of supplementary information presenting the effects of changing prices.
d. requires that the financial statements be consistent and comparable.
4.
When converting from cash basis to accrual basis accounting, which of the following adjustments should
be made to cash receipts from customers to determine accrual basis service revenue?
a. Subtract ending accounts receivable.
b. Subtract beginning unearned service revenue.
c. Add ending accounts receivable.
d. Add cash sales.
5.
Baker Corp.'s liability account balances at June 30, 2002 included a 10% note payable in the amount of
$1,500,000. The note is dated October 1, 2000 and is payable in three equal annual payments of
$500,000 plus interest. The first interest and principal payment was made on October 1, 2001. In Baker's
June 30, 2002 balance sheet, what amount should be reported as accrued interest payable for this note?
a. $112,500.
b. $75,000.
c. $37,500.
d. $25,000.
-1-
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6.
第 2 頁，共 10 頁
The occurrence which most likely would have no effect on 2001 net income (assuming that all amounts
involved are material) is the
a. sale in 2001 of an office building contributed by a stockholder in 1978.
b. collection in 2001 of a receivable from a customer whose account was written off in 2000 by a
charge to the allowance account.
c. settlement based on litigation in 2001 of previously unrecognized damages from a serious accident
which occurred in 1999.
d. worthlessness determined in 2001 of stock purchased on a speculative basis in 1997.
7.
Ross, Inc. incurred the following infrequent losses during 2001:
A $90,000 write-down of equipment leased to others.
A $40,000 adjustment of accruals on long-term contracts.
A $60,000 write-off of obsolete inventory.
In its 2001 income statement, what amount should Ross report as total infrequent losses that
are not considered extraordinary?
a. $190,000.
b. $150,000.
c. $130,000.
d. $100,000.
8.
On January 1, 2001, Ehr Co. leased a building to Dent Corp. for a ten-year term at an annual rental of
$60,000. At inception of the lease, Ehr received $240,000 covering the first two years' rent of
$120,000 and a security deposit of $120,000. This deposit will not be returned to Dent upon expiration
of the lease but will be applied to payment of rent for the last two years of the lease. What portion of the
$240,000 should be shown as a current and long-term liability in Ehr's December 31, 2001 balance
sheet?
Current Liability Long-term Liability
a.
$0
$240,000
b.
$60,000
$120,000
c.
$120,000
$120,000
d.
$120,000
$60,000
9.
On July 1, 2001, Ed Yates signed an agreement to operate as a franchisee of Kwik Foods, Inc., for an
initial franchise fee of $60,000. Of this amount, $20,000 was paid when the agreement was signed and
the balance is payable in four equal annual payments of $10,000 beginning July 1, 2002. The agreement
provides that the down payment is not refundable and no future services are required of the franchisor.
Yates' credit rating indicates that he can borrow money at 14% for a loan of this type. Information on
present and future value factors is as follows:
Present value of 1 at 14% for 4 periods 0.59
Future value of 1 at 14% for 4 periods 1.69
Present value of an ordinary annuity of 1 at 14% for 4 periods 2.91
Yates should record the acquisition cost of the franchise on July 1, 2001 at
a. $43,600.
b. $49,100.
c. $60,000.
d. $67,600.
-2-
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第 3 頁，共 10 頁
10. At the beginning of 2000, Finney Company received a three-year zero-interest-bearing $1,000 trade note.
The market rate for equivalent notes was 8% at that time. Finney reported this note as a $1,000 trade note
receivable on its 2000 year-end statement of financial position and $1,000 as sales revenue for 2000. What
effect did this accounting for the note have on Finney's net earnings for 2000, 2001, 2002, and its retained
earnings at the end of 2002, respectively?
a. Overstate, overstate, understate, zero
b. Overstate, understate, understate, understate
c. Overstate, overstate, overstate, overstate
d. None of these
11. For the year ended December 31, 2001, Colt Co. estimated its allowance for uncollectible accounts
using the year-end aging of accounts receivable. The following data are available:
Allowance for uncollectible accounts, 1/1/01
$51,000
Provision for uncollectible accounts during 2001
(2% on credit sales of $2,000,000)
40,000
Uncollectible accounts written off, 11/30/01
46,000
Estimated uncollectible accounts per aging, 12/31/01
69,000
After year-end adjustment, the uncollectible accounts expense for 2001 should be
a. $46,000.
b. $57,000.
c. $69,000.
d. $64,000.
12.
Which of the following statements is not valid as it applies to inventory costing methods?
a. If inventory quantities are to be maintained, part of the earnings must be invested (plowed back) in
inventories when FIFO is used during a period of rising prices.
b. LIFO tends to smooth out the net income pattern by matching current cost of goods sold with
current revenue, when inventories remain at constant quantities.
c. When a firm using the LIFO method fails to maintain its usual inventory position (reduces stock on
hand below customary levels), there may be a matching of old costs with current revenue.
d. The use of FIFO permits some control by management over the amount of net income for a period
through controlled purchases, which is not true with LIFO.
13.
The balance in Judd Co.'s accounts payable account at December 31, 2001 was $600,000 before any
necessary year-end adjustments relating to the following:
 Goods were in transit to Judd from a vendor on December 31, 2001. The invoice cost was $50,000.
The goods were shipped f.o.b. shipping point on December 29, 2001 and were received on January 4,
2002.
 Goods shipped f.o.b. destination on December 21, 2001 from a vendor to Judd were received on
January 6, 2002. The invoice cost was $25,000.
 On December 27, 2001, Judd wrote and recorded checks to creditors totaling $30,000 that were
mailed on January 10, 2002.
In Judd's December 31, 2001 balance sheet, the accounts payable should be
a. $630,000
b. $650,000.
c. $675,000.
d. $680,000.
-3-
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14.
第 4 頁，共 10 頁
On December 31, 2001, Karney Co. adopted the dollar-value LIFO retail inventory method. Inventory
data for 2002 are as follows:
LIFO Cost
Retail
Inventory, 12/31/01
$310,000
$440,000
Inventory, 12/31/02
?
550,000
Increase in price level for 2002
10%
Cost to retail ratio for 2002
70%
Under the LIFO retail method, Karney’s inventory at December 31, 2002, should be
a. $356,200
b. $385,000.
c. $387,000.
d $394,700.
15. During 2001, Allen Corporation constructed assets costing $500,000. The weighted-average accumulated
expenditure on these assets during 2001 was $300,000. To help pay for construction, $220,000 was
borrowed at 10% on January 1, 2001, and funds not needed for construction were temporarily invested in
short-term securities, yielding $4,500 in interest revenue. Other than the construction funds borrowed,
the only other debt outstanding during the year was a $250,000, 10-year, 9% note payable dated January
1, 1995. What is the amount of interest that should be capitalized by Allen during 2001?
a. $30,000.
b. $15,000.
c. $29,200.
d. $47,200.
16. Irvin Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation
expense in the year of disposition. Data relating to one of Irvin's depreciable assets at December 31, 2001
are as follows:
Acquisition year
1999
Cost
$280,000
Residual value
40,000
Accumulated depreciation
192,000
Estimated useful life
5 years
Using the same depreciation method as used in 1999, 2000, and 2001, how much depreciation
expense should Irvin record in 2002 for this asset?
a. $32,000
b. $48,000
c. $56,000
d. $64,000
17. The intangible asset goodwill may be
a. capitalized only when purchased.
b. capitalized either when purchased or created internally.
c. capitalized only when created internally.
d. written off directly to retained earnings.
-4-
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第 5 頁，共 10 頁
18.
On January 3, 2001, Belle Corp. owned a machine that had cost $100,000. The accumulated depreciation
was $60,000, estimated salvage value was $6,000, and fair market value was $160,000. On January 4,
2001, this machine was irreparably damaged by Snow Corp. and became worthless. In October 2001, a
court awarded damages of $160,000 against Snow in favor of Belle. At December 31, 2001, the final
outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of
Belle’s attorney, Snow’s appeal will be denied. At December 31, 2001, what amount should Belle accrue
for this gain contingency?
a. $160,000.
b. $130,000.
c. $100,000.
d. $0.
19. The December 31, 2001, balance sheet of Ellis Corporation includes the following items:
9% bonds payable due December 31, 2010
$700,000
Unamortized premium on bonds payable
18,900
The bonds were issued on December 31, 2000, at 103, with interest payable on July 1 and
December 31 of each year. Ellis uses straight-line amortization.
On March 1, 2002, Ellis retired $280,000 of these bonds at 98 plus accrued interest. What
should Ellis record as an extraordinary gain on retirement of these bonds? Ignore taxes.
a. $13,160.
b. $7,560.
c. $13,020.
d. $14,000.
20. The par value method of accounting for treasury stock differs from the cost method in that
a. any gain is recognized upon repurchase of stock but a loss is treated as an adjustment to retained
earnings.
b. no gains or losses are recognized on the issuance of treasury stock using the par value method.
c. it reverses the original entry to issue the common stock with any difference between carrying value
and purchase price adjusted through paid-in capital and/or retained earnings and treats a subsequent
reissuance like a new issuance of common stock.
d. it reverses the original entry to issue the common stock with any difference between carrying value
and purchase price being shown as an ordinary gain or loss and does not recognize any gain or loss
on a subsequent resale of the stock.
21. Presented below is information related to Milson, Inc.:
December 31,
2001
2000
Common stock
$ 75,000 $ 60,000
6% Preferred stock
350,000
350,000
Retained earnings (includes net income for current year)
90,000
75,000
Net income for year
60,000
32,000
What is Milson’s rate of return on common stock equity for 2001?
a. 48.8%
b. 26%
c. 25%
d. 22.4%
-5-
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22.
第 6 頁，共 10 頁
If Doleman Company acquired a 30% interest in Barnes Company on December 31, 2001 for $67,500
and during 2002 Barnes Company had net income of $25,000 and paid a cash dividend of $10,000,
applying the equity method would give a debit balance in the Investment in Barnes Company Stock
account at the end of 2002 of
a. $67,500.
b. $72,000.
c. $75,000.
d. $72,500.
23.
Under the cost recovery method of revenue recognition,
a. income is recognized on a proportionate basis as the cash is received on the sale of the product.
b. income is recognized when the cash received from the sale of the product is greater than the cost of
the product.
c. income is recognized immediately.
d. none of these.
24.
On January 1, 2001, Cole Corp. purchased 40% of the voting common stock of Slay, Inc. and
appropriately accounts for its investment by the equity method. During 2001, Slay reported earnings of
$450,000 and paid dividends of $150,000. Cole assumes that all of Slay's undistributed earnings will be
distributed as dividends in future periods when the enacted tax rate will be 30%. Ignore the
dividend-received deduction. Cole's current enacted income tax rate is 25%. The increase in Cole's
deferred income tax liability for this temporary difference is
a. $90,000.
b. $75,000.
c. $54,000.
d. $36,000.
25.
On January 1, 2001, O’Rear Corp. adopted a defined benefit pension plan. The plan's service cost of
$250,000 was fully funded at the end of 2001. Prior service cost was funded by a contribution of
$100,000 in 2001. Amortization of prior service cost was $40,000 for 2001. What is the amount of
O'Rear’s prepaid pension cost at December 31, 2001?
a. $60,000.
b. $100,000.
c. $140,000.
d. $150,000.
-6-
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第 7 頁，共 10 頁
B. Problem. 20 points.
The net changes in the balance sheet accounts of Younger Corporation for the year 2001 are shown below.
Account
Cash
Short-term investments
Accounts receivable
Allowance for doubtful accounts
Inventory
Prepaid expenses
Investment in subsidiary (equity method)
Plant and equipment
Accumulated depreciation
Accounts payable
Accrued liabilities
Deferred tax liability
8% serial bonds
Common stock, $10 par
Additional paid-in capital
Retained earnings—Appropriation for bonded indebtedness
Retained earnings—Unappropriated
Debit
$ 92,000
Credit
$121,000
73,200
13,300
74,200
22,800
20,000
210,000
130,000
80,700
16,500
15,500
80,000
90,000
150,000
60,000
38,000
$643,600
An analysis of the Retained Earnings—Unappropriated account follows:
Retained earnings unappropriated, December 31, 2000
Add: Net income
Transfer from appropriation for bonded indebtedness
Total
Deduct: Cash dividends
$145,000
Stock dividend
240,000
Retained earnings unappropriated, December 31, 2001
$643,600
$1,300,000
287,000
60,000
$1,647,000
385,000
$1,262,000
1. On January 2, 2001 short-term investments (classified as available-for-sale) costing $121,000 were sold
for $150,000.
2. The company paid a cash dividend on February 1, 2001.
3. Accounts receivable of $16,200 and $19,400 were considered uncollectible and written off in 2001 and
2000, respectively.
4. Major repairs of $25,000 to the equipment were debited to the Accumulated Depreciation account
during the year. No assets were retired during 2001.
5. The wholly owned subsidiary reported a net loss for the year of $20,000. The loss was recorded by the
parent.
6. At January 1, 2001, the cash balance was $136,000.
Instructions
Prepare a statement of cash flows (indirect method) for the year ended December 31, 2001. Younger
Corporation has no securities which are classified as cash equivalents.
-7-
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第 8 頁，共 10 頁
Part II -- Advanced Accounting: Multiple-Choice Question (30%)
Items 1 and 2 are based on the following:
On June 30, 2003, Poe Corporation exchanged 75,000 shares of its $20 par value common stock for all of
Saxe Corporation’s common stock. At that date, the fair value of Poe’s common stock issued was equal to
the book value of Saxe’s net assets. Both corporations continued to operate as separate businesses,
maintaining accounting records with years ending December 31. Information from separate company
operations follows:
Retained earnings—12/31/02
Net income—six months ended 6/30/03
Dividends paid—3/25/03
Poe
$1,600,000
400,000
375,000
Saxe
$462,500
137,500
--
1. If the business combination is accounted for as a polling of interest, what amount of retained earnings
would Poe report in its June 30, 2003 consolidated balance sheet?
(A)$2,600,000 (B)$2,225,000 (C)$1,662,500 (D)$1,625,000
2. If the business combination is accounted for as a purchase, what amount of retained earnings would Poe
report in its June 30, 2003 consolidated balance sheet?
(A)$2,600,000 (B) $2,225,000 (C)$1,662,500 (D)$1,625,000
Items 3 and 4 are based on the following:
On January 1, 2004, Pard Corporation and Spin Corporation had condensed balance sheets as follows:
Current assets
Noncurrent assets
Total assets
Current liabilities
Long-term debt
Stockholders’ equity
Total liabilities and stockholders’ equity
Pard
$140,000
180,000
$320,000
$ 60,000
100,000
160,000
$320,000
Spin
$40,000
80,000
$120,000
$20,000
-100,000
$120,000
On January 2, 2004, Pard borrowed $120,000 and used the proceeds to purchase 90% of the outstanding
common shares of Spin. This debt is payable in ten equal annual principal payments, plus interest,
beginning December 30, 2004. The excess cost of the investment over Spin’s book value of acquired net
assets should be allocated 70% to inventory and 30% to goodwill.
On Pard’s January 2, 2004 consolidated balance sheet,
3. Noncurrent liabilities including minority interests should be:
(A)$230,000 (B)$218,000 (C)$208,000 (D)$110,000
4. Stockholders’ equity should be:
(A)$160,000 (B)$170,000 (C)$180,000
(D)$260,000
-8-
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第 9 頁，共 10 頁
5.Strass Corporation is an 80%-owned subsidiary of Post Corporation. During 2002, Strass sold
merchandise that cost $240,000 to Post for $320,000. Post’s ending inventory on December 31, 2002
contained unrealized profit of $16,000 from the intercompany sales.
During 2003, Strass sold merchandise that cost $280,000 to Post for $380,000. One-half of this
merchandise remained unsold by Post on December 31, 2003. For 2003, Post’s separate income
(investment income not included) was $500,000 and Strass’ reported net income was $380,000.
Consolidated net income for 2003 will be:
(A)$770,000 (B)$776,800 (C)$831,200 (D)$838,000
6.Posy Corporation acquired a 90% interest (36,000 shares) in Seda Corporation at $1,080,000, 90% of
Seda’s book value on December 31, 2002. Seda’s stockholders’ equity is $1,400,000 on December 31,
2003. On January 1, 2004, Seda sold 10,000 new shares of its $10 par value common stock for $60 per
share. If Seda sold the additional shares to the general public, Posy’s “Investment in Seda” account after
the sale would be:
(A)$1,008,000 (B)$1,260,000 (C)$1,440,000 (D)$1,600,000
7.Peters Corporation owns an 80% interest in Arp Corporation and Arp owns a 60% interest in Blue
Corporation. Both interests were acquired at book value equal to fair value. During 2003, Arp sells land
to Blue at a profit of $24,000. Blue still holds the land on December 31, 2003. Profits and (losses) of
Peters, Arp, and Blue for 2003 are $360,000, $144,000, and ($60,000) respectively. Consolidated net
income (loss) and minority interest income (loss), respectively, for 2003 are:
(A)$422,400 and ($2,400) (B)$422,400 and ($7,200) (C)$427,200 and ($2,400)
(D)$427,200 and ($7,200)
8.Patton Corporation’s wholly owned subsidiary, Sun Corporation, maintains its accounting records in
German marks. Because all of Sun’s branch officers are in Switzerland, its functional currency is the
Swiss Franc. Remeasurement of Sun’s 2003 financial statements resulted in a $51,000 gain, and
translation of its financial statements resulted in a $15,000 gain. What amount should Patton report as a
foreign exchange gain in its consolidated income statement for the year ended December 31, 2003?
(Patton is a U.S. firm and there is no foreign exchange gain or loss included in Patton’s separate net
income)
(A)$0 (B)$15,000 (C)$51,000 (D)$66,000
9.On December 5, 2003, West Corporation, a U.S. firm, bought inventory items from Pop Corporation of
Norway for 2,000,000 Norwegian krone when the spot rate for krone was $0.168. On December 31,2003,
West’s year-end, the spot rate was $0.167. On January 4, 2004, West purchased 2,000,000 krone for
$335,000 and paid the invoice. How much foreign exchange gain or (loss) should West report in its 2003
and 2004, respectively, income statements?
(A)($2,000) and $1,000 (B)$0 and ($1,000) (C)$0 and $1,000 (D)$2,000 and ($1,000)
-9-
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第 10 頁，共 10 頁
10.Seed Corporation, Nome Corporation’s wholly owned French subsidiary, maintains its accounting
records in franc. On December 31, 2004, the following assets of Seed have been converted into US
dollars at the following exchange rates:
Current Rates
Accounts receivable
$ 425,000
Historical Rates
$
437,500
Inventories
300,000
287,500
Plant assets
600,000
450,000
$1,325,000
$ 1,175,000
Totals
If the functional currency of Seed is the US dollar, what amount of Seed’s assets should be reported in
Nome Corporation’s December 31, 2004 consolidated balance sheet?
(A)$1,162,500 (B)$1,175,000 (C)$1,187,500 (D)$1,325,000
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