系級：__________________
學號：___________________
姓名：___________________
National Tsing Hua University, Department of Quantitative Finance
Intermediate Accounting (A), Midterm Examination I, 2010
※ Date & Time: 2010/11/03
14:10-16:10
※ 共 6 大題，總分 100 分，總頁數為 6 頁，請各位同學檢查清楚。
※ 請寫上系級、學號、姓名。
I. MULTIPLE CHOICE (40%)
1. For Grimmett Company, the following information is available:
Capitalized leases
$200,000
Trademarks
65,000
Long-term receivables
75,000
In Grimmett’s balance sheet, intangible assets should be reported at
A. $65,000.
B. $75,000.
C. $265,000.
D. $275,000.
2. Houghton Company has the following items: common stock, $720,000; treasury stock,
$85,000; deferred taxes, $100,000 and retained earnings, $313,000. What total amount
should Houghton Company report as stockholders’ equity?
A. $848,000.
B. $948,000.
C. $1,048,000.
D. $1,118,000.
3. Presented below are data for Caracas Corp.
2010
$3,800
2,280
?
760
684
?
760
Assets, January 1
Liabilities, January 1
Stockholders' Equity, Jan. 1
Dividends
Common Stock
Stockholders' Equity, Dec. 31
Net Income
Net income for 2012 is
A. $684 income.
B. $684 loss.
C. $38 income.
D. $38 loss.
4. Lohmeyer Corporation reports:
Cash provided by operating activities
Cash used by investing activities
Cash provided by financing activities
Beginning cash balance
What is Lohmeyer’s ending cash balance?
A. $280,000.
B. $350,000.
C. $500,000.
D. $570,000.
1
2011
2012
$4,560
?
?
$2,736
?
2,850
570
646
608
650
?
2,166
684
?
$250,000
110,000
140,000
70,000
5. For Grimmett Company, the following information is available:
Capitalized leases
$200,000
Trademarks
65,000
Long-term receivables
75,000
In Grimmett’s balance sheet, intangible assets should be reported at
A. $65,000.
B. $75,000.
C. $265,000.
D. $275,000.
6. Houghton Company has the following items: common stock, $720,000; treasury stock,
$85,000; deferred taxes, $100,000 and retained earnings, $313,000. What total amount
should Houghton Company report as stockholders’ equity?
A. $848,000.
B. $948,000.
C. $1,048,000.
D. $1,118,000.
7. Presented below are data for Caracas Corp.
2010
$3,800
2,280
?
760
684
?
760
Assets, January 1
Liabilities, January 1
Stockholders' Equity, Jan. 1
Dividends
Common Stock
Stockholders' Equity, Dec. 31
Net Income
Net income for 2012 is
A. $684 income.
B. $684 loss.
C. $38 income.
D. $38 loss.
8. Lohmeyer Corporation reports:
Cash provided by operating activities
Cash used by investing activities
Cash provided by financing activities
Beginning cash balance
What is Lohmeyer’s ending cash balance?
A. $280,000.
B. $350,000.
C. $500,000.
D. $570,000.
2011
2012
$4,560
?
?
$2,736
?
2,850
570
646
608
650
?
2,166
684
?
$250,000
110,000
140,000
70,000
9. Harding Corporation reports the following information:
Net income
$500,000
Depreciation expense
140,000
Increase in accounts receivable
60,000
Harding should report cash provided by operating activities of
A. $300,000.
B. $420,000.
C. $580,000.
D. $700,000.
2
10. In 2010, Benfer Corporation reported net income of $350,000. It declared and paid
common stock dividends of $40,000 and had a weighted average of 70,000 common
shares outstanding. Compute the earnings per share to the nearest cent.
A. $4.43
B. $3.50
C. $4.50
D. $5.00
11. Benedict Corporation reports the following information:
Net income
Dividends on common stock
Dividends on preferred stock
Weighted average common shares outstanding
Benedict should report earnings per share of
A. $3.00.
B. $3.60
C. $4.40.
D. $5.00.
$500,000
140,000
60,000
100,000
Use the following information for questions 8 through 10.
Logan Corp.'s trial balance of income statement accounts for the year ended December 31,
2010 included the following:
Debit
Credit
Sales
$140,000
Cost of sales
$ 50,000
Administrative expenses
25,000
Loss on sale of equipment
9,000
Commissions to salespersons
8,000
Interest revenue
5,000
Freight-out
3,000
Loss due to earthquake damage
12,000
Bad debt expense
3,000
Totals
$110,000
$145,000
Other information:
Logan's income tax rate is 30%. Finished goods inventory:
January 1, 2010
$80,000
December 31, 2010
70,000
On Logan's multiple-step income statement for 2010,
12. Cost of goods manufactured is
A. $63,000.
B. $60,000.
C. $43,000.
D. $40,000.
13. Income before extraordinary item is
A. $64,000.
B. $47,000.
C. $32,900.
D. $24,500.
14. Extraordinary loss is
A. $8,400.
B. $12,000.
C. $14,700.
D. $21,000.
3
15. Murphy Company sublet a portion of its warehouse for five years at an annual rental of
$24,000, beginning on May 1, 2010. The tenant, Sheri Charter, paid one year's rent in
advance, which Murphy recorded as a credit to Unearned Rental Revenue. Murphy
reports on a calendar-year basis. The adjustment on December 31, 2010 for Murphy
should be
A. No entry
B. Unearned Rent Revenue ..............................................................
8,000
Rent Revenue ..................................................................
C. Rent Revenue ...............................................................................
8,000
Unearned Rent Revenue .................................................
D. Unearned Rent Revenue ..............................................................
16,000
Revenue Revenue ...........................................................
16. During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets.
Store supplies in the amount of $19,350 were purchased. Actual year-end store supplies
amounted to $6,450. The adjusting entry for store supplies will
A. increase net income by $12,900.
B. increase expenses by $12,900.
C. decrease store supplies by $6,450.
D. debit Accounts Payable for $6,450.
17. Big-Mouth Frog Corporation had revenues of $200,000, expenses of $120,000, and
dividends of $30,000. When Income Summary is closed to Retained Earnings, the amount
of the debit or credit to Retained Earnings is a
A. debit of $50,000.
B. debit of $80,000.
C. credit of $50,000.
D. credit of $80,000.
18. On June 1, 2010, Nott Corp. loaned Horn $400,000 on a 12% note, payable in five annual
installments of $80,000 beginning January 2, 2011. In connection with this loan, Horn
was required to deposit $5,000 in a noninterest-bearing escrow account. The amount held
in escrow is to be returned to Horn after all principal and interest payments have been
made. Interest on the note is payable on the first day of each month beginning July 1,
2010. Horn made timely payments through November 1, 2010. On January 2, 2011, Nott
received payment of the first principal installment plus all interest due. At December 31,
2010, Nott's interest receivable on the loan to Horn should be
A. $0.
B. $4,000.
C. $8,000.
D. $12,000.
19. Allen Corp.'s liability account balances at June 30, 2011 included a 10% note payable in
the amount of $2,400,000. The note is dated October 1, 2009 and is payable in three equal
annual payments of $800,000 plus interest. The first interest and principal payment was
made on October 1, 2010. In Allen's June 30, 2011 balance sheet, what amount should be
reported as accrued interest payable for this note?
A. $180,000.
B. $120,000.
C. $60,000.
D. $40,000.
4
8,000
8,000
16,000
20. What is a major objective of financial reporting?
A. Provide information that is useful to management in making decisions.
B. Provide information that clearly portray nonfinancial transactions.
C. Provide information that is useful to assess the amounts, timing, and uncertainty
of perspective cash receipts.
D. Provide information that excludes claims to the resources.
21. A common set of accounting standards and procedures are called
A. financial accounting standards.
B. generally accepted accounting principles.
C. objectives of financial reporting.
D. statements of financial accounting concepts.
22. Which of the following are the two components of the revenue recognition principle?
A. Cash is received and the amount is material.
B. Recognition occurs when earned and realized or realizable.
C. Production is complete and there is an active market for the product.
D. Cash is realized or realizable and production is complete.
23. Which of the following is not a required component of financial statements prepared in
accordance with generally accepted accounting principles?
A. President's letter to shareholders.
B. Balance sheet.
C. Income statement.
D. Notes to financial statements.
24. What is the general approach as to when product costs are recognized as expenses?
A. In the period when the expenses are paid.
B. In the period when the expenses are incurred.
C. In the period when the vendor invoice is received.
D. In the period when the related revenue is recognized.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
1.
A
2.
B
3.
D
4.
B
5.
C
6.
D
7.
C
8.
D
9.
C
10.
A
11.
D
12.
B
13.
D
14.
C
15.
B
16.
C
17.
B
18.
B
19.
A
20.
D
5
II. (18%) Data relating to the balances of various accounts affected by adjusting or closing
entries appear below. (The entries which caused the changes in the balances are not given.)
You are asked to supply the missing journal entries which would logically account for the
changes in the account balances.
1. Interest receivable at 1/1/10 was $1,000. During 2010 cash received from debtors for
interest on outstanding notes receivable amounted to $5,000. The 2010 income statement
showed interest revenue in the amount of $5,400. You are to provide the missing
adjusting entry that must have been made, assuming reversing entries are not made.
2. Unearned rent at 1/1/10 was $5,300 and at 12/31/10 was $8,000. The records indicate
cash receipts from rental sources during 2010 amounted to $40,000, all of which was
credited to the Unearned Rent Account. You are to prepare the missing adjusting entry.
3. Accumulated depreciation—equipment at 1/1/10 was $230,000. At 12/31/10 the balance
of the account was $270,000. During 2010, one piece of equipment was sold. The
equipment had an original cost of $40,000 and was 3/4 depreciated when sold. You are to
prepare the missing adjusting entry.
4. Allowance for doubtful accounts on 1/1/10 was $50,000. The balance in the allowance
account on 12/31/10 after making the annual adjusting entry was $65,000 and during
2010 bad debts written off amounted to $30,000. You are to provide the missing adjusting
entry.
5. Prepaid rent at 1/1/10 was $9,000. During 2010 rent payments of $120,000 were made
and charged to "rent expense." The 2010 income statement shows as a general expense
the item "rent expense" in the amount of $125,000. You are to prepare the missing
adjusting entry that must have been made, assuming reversing entries are not made.
6. Retained earnings at 1/1/10 was $150,000 and at 12/31/10 it was $210,000. During 2010,
cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both
dividends were properly charged to retained earnings. You are to provide the missing
closing entry.
Solution 3-134
1. Interest Receivable ..............................................................................
Interest Revenue ....................................................................
Interest revenue per books
$5,400
Interest revenue received related to 2010
($5,000 – $1,000)
4,000
Interest accrued
$1,400
2. Unearned Rent Revenue .....................................................................
Rent Revenue .........................................................................
Cash receipts
$40,000
Beginning balance
5,300
Ending balance
(8,000)
Rent revenue
$37,300
6
1,400
1,400
37,300
37,300
3.
Depreciation Expense .......................................................................
Accumulated Depreciation—Equipment ...............................
Ending balance
$270,000
Beginning balance
230,000
Difference
40,000
Write-off at time of sale 3/4 × $40,000
30,000
$ 70,000
4. Bad Debt Expense ...............................................................................
Allowance for Doubtful Accounts .........................................
Ending balance
$65,000
Beginning balance
50,000
Difference
15,000
Written off
30,000
$45,000
5. Rent Expense ......................................................................................
Prepaid Rent ...........................................................................
Rent expense
$125,000
Less cash paid
120,000
Reduction in prepaid rent account
$
5,000
6. Income Summary ................................................................................
Retained Earnings ..................................................................
Ending balance
$210,000
Beginning balance
150,000
Difference
60,000
Cash dividends
$50,000
Stock dividends
40,000
90,000
$150,000
7
70,000
70,000
45,000
45,000
5,000
5,000
150,000
150,000
III. (20%) Presented below is information related to Farr Company.
Retained earnings, December 31, 2010
Sales
Selling and administrative expenses
Hurricane loss (pre-tax) on plant (extraordinary item)
Cash dividends declared on common stock
Cost of goods sold
Gain resulting from computation error on depreciation charge in 2009 (pre-tax)
Other revenue
Other expenses
$ 650,000
1,400,000
240,000
290,000
33,600
780,000
520,000
120,000
100,000
Instructions
Prepare in good form a multiple-step income statement for the year 2011. Assume a
30% tax rate and that 80,000 shares of common stock were outstanding during the
year.
Solution 4-124
Farr Company
INCOME STATEMENT
For the Year Ended December 31, 2011
Sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Income from operations
Other revenue
Other expenses
Income before taxes
Income taxes
$1,400,000
780,000
620,000
240,000
380,000
120,000
(100,000)
400,000
(120,000)
Income before extraordinary item
Extraordinary loss, net of applicable income taxes of $87,000
Net income
Per share of common stock—
Income before extraordinary item
Extraordinary item, net of tax
Net income
$3.50
(2.54)
$ .96
8
$
280,000
(203,000)
77,000
IV. (22%) The following balance sheet was prepared by the bookkeeper for Kraus
Company as of December 31, 2010.
Kraus Company
Balance Sheet
as of December 31, 2010
Cash
Accounts receivable (net)
Inventories
Investments
Equipment (net)
Patents
$ 80,000
52,200
57,000
76,300
96,000
32,000
$393,500
Accounts payable
Long-term liabilities
Stockholders' equity
$ 75,000
100,000
218,500
$393,500
The following additional information is provided:
1. Cash includes the cash surrender value of a life insurance policy $9,400, and a
bank overdraft of $2,500 has been deducted.
2. The net accounts receivable balance includes:
(a) accounts receivable—debit balances $60,000;
(b) accounts receivable—credit balances $4,000;
(c) allowance for doubtful accounts $3,800.
3. Inventories do not include goods costing $3,000 shipped out on consignment.
Receivables of $3,000 were recorded on these goods.
4. Investments include investments in common stock, trading $19,000 and
available-for-sale $48,300, and franchises $9,000.
5. Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used
and is held for sale. Accumulated depreciation on the other equipment is $40,000.
Instructions
Prepare a balance sheet in good form (stockholders' equity details can be omitted.)
9
Solution 5-118
Kraus Company
Balance Sheet
As of December 31, 2010
Assets
Current assets
Cash
Trading securities
Accounts receivable
Less: Allowance for doubtful accounts
Inventories
*Equipment held for sale
Total current assets
Investments
Available-for-sale securities
Cash surrender value
$ 73,100
19,000
$ 57,000
3,800
(2)
53,200
60,000
1,000
206,300
48,300
9,400
Property, plant, and equipment
Equipment
Less accumulated depreciation
135,000
40,000
Intangible assets
Patents
Franchises
Total assets
32,000
9,000
(1)
(3)
(4)
57,700
(5)
95,000
41,000
$400,000
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
Bank overdraft
Total current liabilities
$ 79,000
2,500
81,500
Long-term liabilities
Total liabilities
100,000
181,500
Stockholders' equity
Total liabilities and stockholders' equity
(1)
(2)
(3)
(4)
(5)
(6)
($80,000 – $9,400 + $2,500)
($60,000 – $3,000)
($57,000 + $3,000)
($5,000 – $4,000)
($96,000 + $40,000 – $5,000 + $4,000)
($75,000 + $4,000)
*An alternative is to show it as an other asset.
10
218,500
$400,000
(6)