(Multiple Choice; ) Dutch Grove Use the data presented below for Dutch Grove Corp. for the year ended December 31, 2004 to answer the questions that…

7. (Multiple Choice; )Dutch Grove Use the data presented below for Dutch Grove Corp. for the year ended December 31, 2004 to answer the questions that follow.Sales (100% on credit) $950,000Net credit sales 929,000Accounts Receivable (December 31, 2004) 114,000Allowance for Doubtful Accounts (before adjustment at December 31,2004; credit balance) 1,000Estimated amount of uncollectible accounts based on an aging analysis 10,000Refer to Dutch Grove data. If Dutch Grove uses an aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2004?A. $2,280B. $8,000C. $9,000D. $10,0008. (Multiple Choice; ) Badgers Inc. issued a 120-day note in the amount of $60,000 on 12/16/07 with an annual rate of 8%.What amount of interest has accrued as of 4/16/08?A. $4,800B. $197.26C. $1578.08D. $2,400E. zero9. (Multiple Choice; ) Which of the following would require the company to record an accrual on the balance sheet?A. The company owes $20,000 in wages to its employees for the previous two weeks.B. Interest will be paid when a note payable matures in the following accounting periodC. All of these cases would require the company to record an accrual on the balance sheet.D. The company knows that they will be fined for pollution as a result of their manufacturing process and can estimatethe amount of the obligation.10. (Multiple Choice; ) Cornucopia Electric Corp. sells $100,000 of bonds to private investors. The bonds have a 8%coupon rate and interest is paid semi-annually. The bonds were sold to yield 9%. What periodic interest paymentdoes Cornucopia make?A. $9,000B. $4,500C. $8,000D. $4,00011. (Multiple Choice; ) Amortization of bond discount results in a(n)A. decrease of the bonds payable account.B. decrease of owners’ equity.C. increase of owners’ equity.D. decrease in the cash account.12. (Multiple Choice; ) Cornucopia Electric Corp. sells $100,000 of bonds to private investors. The bonds are due in 5years, have a 8% coupon rate and interest is paid semi-annually. The bonds were sold to yield 10%. What proceedsdoes Cornucopia receive from the investors?A. $100,000B. $107,985C. $108,110D. $92,278E. $92,41813. (Multiple Choice; ) On June 1, Panda Club borrows $20,000 from First State Bank. The loan is due in one year alongwith 5% interest. The company is preparing its quarterly report for August 31. Which of the following best describes thenecessary accrual for interest expense?A. $62.50 decrease liabilities, decrease cashB. $250 decrease liabilities, decrease cashC. $250 increase expenses, decrease cashD. $250 increase liabilities, increase expensesE. $62.50 increase liabilities, increase expenses14. Selected recent balance sheet and income statement information for American Eagle Outfitters follows:(in thousands) 2005Year-end accounts payable $ 139,197Average accounts payable 124,063Sales 2,309,371Cost of goods sold 1,101,679Accounts payable turnover for 2005 is:A. 9.96 B. 8.88 C. 16.59 D. 18.6115. (Multiple Choice; ) Debt ratings:A. reflect the relative riskiness of the borrowing companyB. result in higher market prices for the bonds when there is a higher quality debt ratingC. that are higher quality result in lower effective interest rates for the issuerD. All of these statements are correctE. All of these statements are false.16. (Multiple Choice; ) Current liabilities:A. are obligations that require payment within the coming year or operating cycle, whichever is longer.B. are generally settled with existing current assets or operating cash flowsC. consist of both operating and nonoperating liabilitiesD. All of these are true17. (Multiple Choice; ) Kraft Inc. offers Schnuck’s credit terms of 2/5, net 65. If Schnuck’s does not take the early paymentdiscount, it is effectively paying what annual rate of interest?A. 36%B. 18.25%C. 40%D. 12.17%18. (Multiple Choice; ) Astro Publications declares a small stock dividend of 17% of the outstanding shares of commonstock. Currently, Astro has 700,000 shares of $1 par value common stock outstanding. The current market price of thestock is $81.53 per share. Astro will record a dividend of:A. $700,000B. $57,771,000C. $9,821,000D. $9,702,07019. (Multiple Choice; ) Digital Masterpieces paid a 50% stock dividend. The company has 600,000 $1 par value sharesissued and outstanding. The market value of Digital’s stock is $47 the day the dividend is paid. How does this transactionaffect the “Common Stock, at par” account?A. Increases by $600,000B. Increases by $300,000C. Has no effectD. Increases by $6,750,00020. (Multiple Choice; ) If a company issues 2,000 shares of common stock at a market price of $20 per share, which ofthe following is the correct balance sheet effect?A. Increase cash by $40,000 and increase contributed capital by $40,000B. Increase cash by $40,000 and increase earned capital by $40,000C. Increase stock revenues by $40,000D. Stock issuances are not reported on the balance sheet21. (Multiple Choice; ) In June 2007, Typesetters, Inc announced a 3-for-2 stock split. On the split date, Typesetters hadabout 28.7 million shares outstanding. After the split the number of shares outstanding was:A. 64.5 millionB. 43.05 millionC. 32.25 millionD. 14.3 million22. (Multiple Choice; ) Digital Masterpieces paid a 50% stock dividend. The company has 600,000 $1 par value sharesissued and outstanding. The market value of Digital’s stock is $47 the day the dividend is paid. How does this transactionaffect the “Additional paid-in capital” account?A. Increases by $600,000B. Increases by $300,000C. Has no effectD. Increases by $6,750,00023. (Multiple Choice; ) In 2006, Morgan Bates Corporation paid dividends in arrears of $8,994,000 to its preferredshareholders and paid no dividends to its common shareholders. This practice is called a:A. Liquidation preferenceB. Treasury preferenceC. Dividend preferenceD. Stock ownership prefer

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