ADVANCED ACCOUNTING (02)

Transcription

1 9 Pages Contestant Number Total Work Time Rank ADVANCED ACCOUNTING (02) State 2002 Objective Portion 2 points each) (60 pts.) Production Portion: Job 1 Depreciation (20 pts.) Job 2 Calculating Inventory Costs (20 pts.) TOTAL POINTS (100) Failure to adhere to any of the following rules will result in disqualification: 1. Contestant must hand in this test booklet and all printouts. Failure to do so will result in disqualification. 2. No equipment, supplies, or materials other than those specified for this event are allowed in the testing area. No previous BPA tests and/or sample tests or facsimile therefore (handwritten, photocopied, or keyed) are allowed in the testing area. 3. No programmable cordless calculators, PDAs, or personal information managers may be used in any event. 110 minutes for testing/production 110 minutes total time allotted Do NOT open test booklet until instructed to do so. Property of Business Professionals of America. May be reproduced only for use in the Business Professionals of America Workplace Skills Assessment Program state-level competitions.

2 ADVANCED ACCOUNTING STATE 2002 PAGE 2 Choose the best answer for the following questions and record your answers on the form provided. 1. The journal entry to pay principal and interest on a note payable is A. debit Notes Payable; credit Cash and Interest Expense B. debit Notes Payable and Interest Expense; credit Cash C. debit Cash; credit Notes Payable and Interest Expense D. debit Cash and Notes Payable; credit Interest Expense 2. The journal entry to record a dishonored note receivable is A. debit Accounts Receivable; credit Notes Receivable B. debit Accounts Receivable; credit Notes Receivable and Interest Income C. debit Notes Receivable; credit Accounts Receivable D. debit Accounts Receivable; credit Notes Receivable 3. When a customer dishonors a note, A. interest is earned but not recorded B. no interest is earned C. interest is both earned and recorded D. none of the above 4. The purpose of recording depreciation is to A. earn revenue B. recover the cash spent on plant assets C. record an expense in the periods in which the asset is used to earn revenue D. earn money to replace the asset 5. Minh Winh, M.D., keeps her accounting records on the cash basis. During 2001, Dr. Winh collected $150,000 in fees from her patients. On December 31, 2000, Dr. Winh had accounts receivable of $20,000. At December 31, 2001, Dr. Winh had accounts receivable of $35,000 and unearned fees of $5,000. How much was Dr. Winh s patient service revenue for 2001? A. $150,000 B. $160,000 C. $165,000 D. $170,000

3 ADVANCED ACCOUNTING STATE 2002 PAGE 3 6. Gar, Inc. s trial balance reflected the following liability account balances at December 31, 2001: Accounts Payable $49,000 Bonds Payable, due ,000 Discount on Bonds Payable 2,000 Dividends Payable on 2/15/01 5,000 Income Tax Payable 9,000 Notes Payable, due 1/19/2001 6,000 In Gar s December 31, 2001, balance sheet, the current liabilities total is A. $71,000 B. $69,000 C. $67,000 D. $65, Mall Co. at December 31, 2001 and 2000 reported the following balances: 12/31/01 12/31/00 Inventory $260,000 $290,000 Mall paid suppliers $490,000 during the year ended December 31, What amount should Mall report for cost of goods sold in 2001? A. $520,000 B. $495,000 C. $485,000 D. $435, The following costs were incurred by Gruff, a manufacturer, during 2001: Accounting and Legal Fees $ 25,000 Transportation In 175,000 Delivery Expense 160,000 Officers Salaries 150,000 Insurance 85,000 Sales Representatives Salaries 215,000 What amount of these costs should be reported as selling and administrative expenses for 2001? A. $260,000 B. $550,000 C. $635,000 D. $810,000

4 ADVANCED ACCOUNTING STATE 2002 PAGE 4 9. Block Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2001, includes the following: Accounting Fees $120,000 Advertising 150,000 Delivery Expense 80,000 Interest 70,000 Legal Fees 30,000 Officers Salaries 225,000 Rent for Office Space 220,000 Sales and Salaries Commissions 140,000 The sales department occupies one-half of the rented premises. Block s total selling expenses for 2001 are A. $480,000 B. $400,000 C. $370,000 D. $340, The useful life of a plant asset is estimated based on A. prior experience with similar assets B. guidelines published by trade associations C. IRS guidelines D. all of the above 11. Book value of a plant asset is original cost A. plus accumulated depreciation B. minus accumulated depreciation C. plus salvage value D. minus salvage value 12. On December 31, 2000, Lex, Inc., had 300,000 shares of common stock issued and outstanding. Lex issued a 10% stock dividend on July 1, On October 1, 2001, Lex purchased 24,000 shares of its own common stock. What number of shares should be used in computing earnings per share for the year ended December 31, 2001? A. 306,000 B. 309,000 C. 324,000 D. 330, When a plant asset is disposed, a journal entry is recorded that A. recognizes the annual depreciation B. removes the amount owed on the plant asset from Accounts Payable C. closes the depreciation expense account to Income Summary D. removes the original cost of the plant asset and its related accumulated depreciation 14. The journal entry to record the sale of office equipment for more than the book value is debit Cash and

5 ADVANCED ACCOUNTING STATE 2002 PAGE 5 A. credit Office Equipment B. debit Accumulated Depreciation-Office Equipment; credit Office Equipment and Gain on Plant Assets C. debit Office Equipment; credit Accumulated Depreciation-Office Equipment and Gain on Plant Assets D. none of the above 15. If a plant asset costs $4,000, has accumulated depreciation of $3,200, and is sold for $900, the gain or loss on disposal is A. $900 gain B. $800 loss C. $100 loss D. $100 gain 16. If a plant asset costs $700, has accumulated depreciation of $550, and is sold for $100, the gain or loss on disposal is A. $50 loss B. $100 gain C. $150 loss D. $450 gain 17. A form used to show the kind of merchandise, quantity received, quantity sold, and balance on hand is A. an inventory record B. a stock record C. a stock ledger D. none of the above 18. The entry to journalize the adjusting entry for accrued interest income is A. debit Income Summary; credit Interest Income B. debit Interest Income; credit Income Summary C. debit Interest Income; credit Interest Receivable D. debit Interest Receivable; credit Interest Income 19. Stock records do not reflect A. the cost of the merchandise B. increases in quantity on hand C. decreases in quantity on hand D. the balance on hand after each increase or decrease is recorded

6 3 Pages 20. The entry to journalize the reversing entry for accrued interest income is A. debit Income Summary; credit Interest Income B. debit Interest Income; credit Income Summary C. debit Interest Income; credit Interest Receivable D. debit Interest Receivable; credit Interest Income 21. At the end of a fiscal period, any revenue that has been earned but not received should be credited to an appropriate A. revenue account B. expense account C. liability account D. asset account 22. A transaction for the declaration of a dividend is recorded in a A. cash payments journal B. cash receipts journal C. sales journal D. none of the above 23. The adjusting entry for accrued interest expense is A. debit Interest Expense; credit Interest Income B. debit Interest Expense; credit Interest Payable C. debit Interest Payable; credit Interest Expense D. debit Interest Expense; credit Interest Receivable 24. In preparing its August 31, 2001, bank reconciliation, Thomas Company has available the following information: Balance per bank statement $46,500 Deposit in transit 10,300 Return of customer s NSF check 600 Outstanding checks 12,600 Bank service charge August 100 At August 31, 2001, Thomas adjusted bank balance is A. $44,800 B. $44,900 C. $44,200 D. $47, The value of ending inventory using the LIFO method for merchandise that has a beginning inventory of 20 $5 each, purchases during the year of 10 $6 each, and ending inventory of 12 units is A. $60 B. $62 C. $70 D. $ A voucher should be prepared A. before a purchase order is issued

7 3 Pages B. before any obligation is recorded or paid C. immediately after a check is issued to pay an invoice D. before a purchase requisition is issued 27. A good internal control procedure is to A. require that only one person be responsible for the preparation and approval of a voucher B. require that the person who ordered goods or services authorize payment for them C. use pre-numbered business forms D. handle all receipts and payments with cash 28. Which of the following is not considered a quick asset? A. Merchandise Inventory B. Marketable Securities C. Accounts Receivable D. Cash 29. During a period of rising prices, the cost of merchandise sold will be A. lowest using the LIFO method B. lowest using the FIFO method C. lowest using the weighted-average method D. the same using either FIFO or LIFO method 30. Actual Federal income tax expense is calculated on the amount of A. net sales B. net sales less total expenses C. net sales less cost of goods sold D. net income before Federal income tax

8 3 Pages Job 1 DEPRECIATION On January 2, 2000, Acme, Inc., purchased a manufacturing machine for $864,000. The machine has an 8-year estimated life and a $144,000 estimated salvage value. Acme expects to manufacture 1,800,000 units over the life of the machine. During 2001, Acme manufactured 300,000 units. For each of the following depreciation methods, calculate the depreciation expense for 2001 (the second year of ownership) for the machine described above. Straight-line depreciation Double-declining balance (DDB) Sum-of-the-years -digits (SYD) Units of production

9 3 Pages Job 2 CALCULATING INVENTORY COSTS The Cody Basket Shop has the following record of basket liner kits for the month of September: Beginning Inventory 13 $3.48 = $ Purchased September 4 15 $3.51 = Purchased September 9 20 $3.67 = Purchased September $3.71 = Purchased September $3.74 = units $ At the end of September, there were 22 units on hand. Based on the above information, complete the following statements. 1. The value of the ending inventory using the FIFO method is. 2. The value of the ending inventory using the LIFO method is. 3. The value of the ending inventory using the weighted average cost method is. 4. The purchase that will have the greatest impact on the weighted average cost method was made on. 5. Which method produces the highest value for the ending inventory?

10 3 Pages ADVANCED ACCOUNTING (02) KEY 1.State 2002 Objective Portion 2 points each) (60 pts.) Production Portion: Job 1 Depreciation 5 points each) (20 pts.) Job 2 Calculating Inventory Costs 4 points each) (20 pts.) TOTAL POINTS (100) Graders: When grading computer-generated problems, refer to the Style and Reference Manual and Production Standards in the Workplace Skills Assessment Program Guidelines for further instructions. Double-check and verify all scores! Property of Business Professionals of America. May be reproduced only for use in the Business Professionals of America Workplace Skills Assessment Program state-level competitions.

11 ADVANCED ACCOUNTING STATE 2002 PAGE 2 KEY 1. A B C D E 2. A B C D E 3. A B C D E 4. A B C D E 5. A B C D E 6. A B C D E 7. A B C D E 8. A B C D E 9. A B C D E 10. A B C D E 11. A B C D E 12. A B C D E 13. A B C D E 14. A B C D E 15. A B C D E 16. A B C D E 17. A B C D E 18. A B C D E 19. A B C D E 20. A B C D E 21. A B C D E 22. A B C D E 23. A B C D E 24. A B C D E 25. A B C D E 26. A B C D E 27. A B C D E 28. A B C D E 29. A B C D E 30. A B C D E Contestant Number

12 ADVANCED ACCOUNTING STATE 2002 PAGE 3 KEY Job 1 DEPRECIATION (20 points) Straight-line depreciation $90,000 (5 points) Double-declining balance (DDB) $137,000 (5 points) Sum-of-the-years -digits (SYD) $140,000 (5 points) Units of production $120,000 (5 points) Job 2 CALCULATING INVENTORY COSTS (20 points) 6. FIFO method $82.07 (4 points) 7. LIFO method $76.83 (4 points) 8. Weighted average cost method is $79.64 (4 points) 9. Purchase date September 9 (4 points) 10. Highest value FIFO (4 points) Contestant Number