Chapter 1 Quiz

Question 1

Question 2

Question 3
Question 4

Retained Earnings = Revenues - Expenses - Dividends

Individual 1: 15,000 - 8,000 - 6,000 = 1,000

Individual 2: 40,000 - 22,000 - 12,000 = 6,000

Question 5

Profit After Taxes = Net Income - ((Revenues - Expenses) x Tax Rate))

= 125,000 - ((210,000 - 85,000) x 0.20))
= 125,000 - (125,000 x 0.20)
= 125,000 - 25,000
= 100,000
Question 6

Shareholders’ Equity = Total Assets - Total Liabilities

= 85,000 - 35,000
= 50,000

Chapter 2 Quiz

Question 1
Question 2

Liabilities x % of Company Assets > 400,000 x 0.20 > 80,000 = 100,000

100 - % of Company Assets 1.00 - 0.20 0.8

Question 3

Land = Share Capital + Notes Payable + Retained Earnings + Deferred Revenue - Cash -
Accounts Receivable - Inventory

Question 4
 Chapter 3 Quiz

Question 1

Question 2

Beginning retained earnings = Ending retained earnings – Net income + Dividends

= 220,000 - 95,000 + 42,000

= 167,000

Question 3
Question 4

Question 5

Chapter 4 Quiz

Question 1

Calculation of rent expense for the year ended November 30, 2020

Rent expense from December 1, 2019 to July 31, 2020 (8 months ) =$12,000 ×8/12 = $8,000

Rent expense for August 1, 2020 to November 30, 2020 (4 months) = $126,000 ×4/12 =$42,000

Therefore, Total Rent expense for year ended November 30, 2020 is $50,000 ($8,000 +$42,000).

Question 2
Unearned Revenue = Revenues x # of Months Unearned

October - December = 4170 x 9/12 | November - December = 6120 x 10/12 | December = 11310 x 11/12

October - December = 3127.50 | November - December = 5100 | December = 10,367.5

Unearned Revenue = 3,127.50 + 5,100 + 10,367.50 = $18,595

Question 3

Question 4
 Chapter 6 Quiz

Question 1

1. 120,000 - 68,000 = 52,000 x 0.16 = 8,320

 2. 110,000 - 68,000 = 42,000 x 0.07 = 2,940
3. 114,000 - 20,000 = 94,000 x 0.01 = 940
4. Bad Debt Expense = 8,320 + 2,940 + 940 = 12,200
5. 52,000 + 42,000 + 94,000 = 188,000 - 12,200
6. Net Balance of A/R = 175,800

Question 2

Adjusted general ledger @ end of month before adjustments (45,000)

+ Interest Earned During Month (+9000)

- Bank Service Charges During Month (-300)

- Cheque Returned NSF (-2100)

= Adjusted General Ledger Bank Balance @ End of Month (51,600)

Question 3
Question 4

Chapter 7 Quiz

Question 1
Cost of sales = Opening inventory – Ending inventory + Purchases – Purchase discounts –
Purchase returns and allowances

Question 2

Weighted-average cost per unit = (Number of units in opening inventory * Cost per unit
+ Number of units purchased on June 1 * Cost per unit + Number of units purchased on
August 1 * Cost per unit) / (Number of units in opening inventory + Number of units
purchased on June 1 + Number of units purchased on August 1)

Gross margin = (Selling price per unit – Weighted-average cost per unit) * Number of
units sold

8000 x 6 + 6000 x 8 + 5000 x 8 / 8000 + 6000 + 5000

48,000 + 48,000 + 40,000 / 8000 + 6000 + 5000

136,000 / 19,000 = 7.157

Gross Margin = 23 - 7.517 x 12,000 = 190116

Question 3

Question 4

Question 5

Calculation: [($3,600 × 98%) + 120] ÷ 100 =$36.48

Chapter 8 Quiz

Question 1
Total Initial Purchase Cost x (building appraisal/total appraisal) + Renovation Cost

190,000 x (115,000/221,000) + 17,000 = 115,869

Question 2

1. Calculate Cost of Equipment (380,000 + 55,000) = 435,000

Double Declining Method

Double declining depreciation rate

Double declining depreciation rate = 2 x (1 / useful life)
Double declining depreciation rate = 2 x (1 / 12)
Double declining depreciation rate = 0.16 or 16%

Dep Acc Dep Carrying Amount

1. 435,000 x 2/12 = 72,500 72,500 362,500

2. 362,500 x 2/12= 60,416.67 132,916.67 302,083.33

3. 302,083.33 x 2/12= 50,347.22 183,263.89 251,736.11

Answer = 251,736
Question 3

Depreciation per year = (purchase price - residual value) / useful life

= 130,000 - 15,000 / 5

= 23,000 / year

Value as on January 1, year 1 = 130,000

Depreciation till July 1, year 5 = - 80,500 (3.5 x 23,000)

Value as on July 1, Year 5 = 49,500

Sell Price - Value as on July 1, Year 5 = -39,500

Question 4

Question 5
Question 6

Chapter 9 Quiz

Question 1

Present Value of Annuity = Payment x [1 – (1 + i) ^ ( – n )] / i

0.48/12 = 0.04

64,000 = PMT [1- (1 + 0.04) ^ (-10)] / 0.04

64,000 = PMT [1 - (1.04) ^ (-10)] / 0.04

64,000 = PMT 1 - 0.67556416882 / 0.04

64,000 = PMT 0.32443583117 / 0.04

64,000 = PMT 8.11089577936

= 7,890.62

Question 2

Question 3
 Chapter 10 Quiz
Question 1

Bonds that the issuer can buy back at the issuer's option are called

● Indentures

● Redeemable bonds

● Retractable bonds

● Premium bonds
Question 2

On January 1, year 1, ABC. Corp. issued bonds as follows:

Face value $10000000
Stated (or coupon) annual rate of interest 9 % Coupon is paid twice annually.
The market annual rate of interest 6 %
Term in years 3
How much did the bond sell for? Round your answer to the nearest dollar.

Question 3

Barney Inc. has bonds outstanding that were issued at a premium. The bonds were issued on
January 1 and pay interest on June 30 and December 31. At the beginning of the current year
the bonds had a carrying value of $ 100000. The bonds have a face value of $ 92000. The
bonds pay interest at an annual interest rate of 6 %. The annual market rate on the bonds at the
time they were issued was 2 %. The current annual market rate on bonds is 6 %. Round any
value to two decimal places in intermediate steps and round your final answer to the nearest
dollar.

Calculate interest expense for the year on the bonds. Round your answer to the nearest
dollar. (Please note that you do not require present value tables to answer this question so
their omission is deliberate.)
June 30

Interest Expense = Carrying Value (100,000) x Annual Market Rate (2%) / 2 = 1000

Cash Paid for Semi-annual Coupon = Face Value (92000) x Annual Int Rate (6%) / 2 = 2760

Amortization of Premium = 2760 - 1000 = 1760

Carrying Value @ June 30 of Current Year = 100,000 - 1760 = 98,420

December 31

Interest Expense = Carrying Value (98,420) x Annual Market Rate Bond on Time of Issuance
(2%) / 2 = 984.2

Therefore, Interest Expense on Year of Bonds = 1000 + 984.2 = 1984.2

Question 4

If the market interest rate is higher than the coupon interest rate (or stated rate) of the bond, the
bond sells:

● at a premium.

● It is undeterminable.

● at a discount.

● at face value.

Question 5

When a bond is issued at a discount, the amount of interest expense for an interest period is
calculated by multiplying the _______ amount times the _______ interest rate during the period.
Question 5 options:

● face, stated

● carrying, market

● face, market

● carrying, stated
Question 6

Which item listed below does not influence the issue price (present value) of a bond?

● The dollar amounts to be received

● The reason the bond was issued

● The length of time until the amounts are received

● The market rate of interest

Chapter 11 Quiz

Question 1

Laurier Inc. has the following shares outstanding

4000 Common shares outstanding

1000 Preferred shares outstanding, cumulative, with 4 years of outstanding dividends in addition
to the current year. The preferred shares pay dividends of $ 0.80 per share per year.

During the current year, a dividend of $ 8800 was declared. How much would the common
shareholder's receive per share. Round your answer to the nearest cent. ie. 0.26

Dividends on preferred shares = # Of Years (4 years + 1 outstanding) x # of Preferred Shares

(1000) x Dividend per Preferred Share/Year (0.80)
5 x 1000 x 0.80 = 4000

Dividend Per Common Share = Total Dividends (8800) - Dividends on Preferred Shares (4000) /
# of Outstanding Common Shares (4000)

8800 - 4000 / 4000

4800 / 4000

= 1.2

Question 2

Indicate the impact that a share dividend that has been declared and paid has on each of the
following statement of financial position elements.

Question 3

Excel Corporation had net earnings of $500,000. It paid $125,000 in dividends to the preferred
shareholders. Excel Corporation had a weighted average of 1,500,000 common shares and
250,000 preferred shares. Excel Corporation's earnings per share was:

● $0.21

● $0.33

● $0.29

● $0.25

Net Earnings - Dividends / Weighted Average

$500,000 - $125,000 = 375,000 / 1,500,000 = 0.25

Question 4

Domus Realty Limited has 20,000 common shares issued and outstanding at January 1, 20X4.
On July 1, the company sold an additional 10,000 common shares for proceeds of $100,000.
Net income for the year was $30,000. What would the earnings per share be?

Net Income / ((Common Shares + (Additional Common Shares x Months Dec 31 - July 1))

30,000 / (20,000 + (10,000 x 6/12)) = 1.20

Question 5

Which of the following statements is false?

● Issuance of shares would increase cash from financing activities.

● Repurchases of shares at prices lower than the average issue price result in profit for the
issuing company.

● Repurchase of shares (treasury shares) and payment of cash dividends reduce cash
flow from financing activities.

● A stock dividend has no impact on cash.

Chapter 5 Quiz

Question 1

Question 2

The cash flow statement will not report the:

● uses of cash in the current period.

● sources of cash in the current period.

● amount of cheques outstanding at the end of the period.

● change in the cash balance for the current period.

Question 3

Which of the following is a cash inflow from financing activities?

● Proceeds from selling equipment.

● Proceeds from selling investments in equity securities of another company.

● Proceeds from issuance of bonds payable.

● Receipt of interest payments.

Chapter 12 Quiz

Question 1

The following data relates to Laurier Inc.

Total assets, December 31, year 1 100000

Total assets, December 31, year 2 497000

Total liabilities, December 31, year 1 60000

Total liabilities, December 31, year 2 56000

Sales for year 2 1280000

Income for year 2 32000

Calculate the total asset turnover rate for year 2. Round your answer to two digits.

Sales for Year 2 / ((Total Assets Year 1 + Total Assets Year 2 / 2) = Total Asset Turnover Rate
1280000 / 100000 + 497000 / 2 =

1280000 / 298,500 = 4.288

Question 2

Laurier Inc. had total assets at the beginning of the year of $ 4000000 and total assets at the
end of the year of $ 3000000. The following contains information on Laurier Inc.'s statement of
income for the year:

Sales $ 900000

Interest expense $ 9000

Income tax expense $20000

Net income $350000

Calculate Laurier Inc.'s return on assets (ROA) for the year. Express your answer as a
percentage rounded to two digits (i.e. 3.84).

Return on Assets = Net Earnings + Interest Expense (Net of Tax)

Average Total Assets

OR

Return on Assets = Net Income / Average Total Assets

Net Income = 350,000

Average Total Assets = 4000000 + 3000000 / 2

= 3,500,000

350,000 / 3,500,000 = 10%

Question 3

Laurier Inc. had the following account balances at the end of the year

Cash 60000
Equipment 140000

Accounts payable 63000

Accounts receivable 50000

Bonds payable 59000 due in five years

Share capital 70000

Income tax payable 10000

Inventory 87000

Calculate the current ratio. Round your answer to two decimal places.

Current Assets
Current Liabilities

Current Assets:

Cash (6000) + Accounts Receivable (50,000) + Inventory (87,000) = 143,000

Current Liabilities:

Accounts Payable (63,000) + Income Tax Payable (10,000) = 73,000

143,000 / 73,000 = 1.958

Question 4

On May 1 XYX Inc. paid accounts payable of 40000. Prior to the payment, XYX Inc. had current
assets of 90000 and a current ratio of 2. Calculate XYX Inc.'s current ratio after the payment of
the accounts payable. Round your answer to two decimal places.

Current Assets
Current Liabilities

Current Assets:

9000

Current Liabilities

Question 5
Net sales are $2,700,000, beginning total assets are $750,000, and the asset turnover is 3.0.
What is the ending total asset balance?

● $900,000.

● $600,000.

● $1,125,000.

● $1,050,000.

Assets turn over = Net Sales / Average Total Assets

3.0 = $2,700,000 / Average Total Assets

Average Total Assets = $2,700,000 / 3

= $900,000

Average Total Assets = (Beginning total assets + Ending total assets) / 2

$900,000 = ($750,000 + Ending total assets) / 2

$750,000 + Ending total assets = $1,800,000

Ending total assets = $1,800,000 - $750,000

= $1,050,000

Question 6
 ● 13%

● 16%

● 24%

● 6%

60 000-45 000=15 000

107 600-104 000=3600

3600/15 000=0.24=24%

Question 7

● A company that is leveraged is one that

● has a high current ratio.

● has high earnings per share.

● is partially debt-financed.

● equity financed.
 Chapter 6 Mini Quiz

Calculate the net balance of accounts receivable at the end of the year:
Figure out how much is left owing for each customer at the end of the year and then
multiply it by (1 - whatever percentage applies to them based on how long the accounts
are overdue) and add it all together

What is the correct adjusted general ledger bank balance at the end of the
month?
Balance per general ledger at the end of the month before adjustments + interest
earned during the month - bank service charges during the month - cheque returned
NSF

A retail company accepts credit cards as payments for all the following reasons
EXCEPT:
- To increase customer traffic at its stores
- To receive money faster
- Because the fee for the service is small compared to the benefits
- To avoid the costs of providing credit directly to customers
A sale should, not be recognized as revenue by the seller at the time of sale if
- Payment was made by cheque
- The buyer cannot return the product unless there it is defective, which rarely
occurs
- The buyer has a right to return the product and the amount of future returns
cannot be reasonably estimated
- The selling price is less than the normal selling price

Chapter 7 Mini Quiz

Calculate the cost of sales for the year:

Cost of sales = opening inventory - ending inventory + purchases - purchase discounts -
purchase returns and allowances
Calculate the gross profit (margin) for the year. Round your answer to the nearest
dollar.
Requires you find the weighted-average cost per unit - (Number of units in opening
inventory x Cost per unit + number of units purchased on June 1 x Cost per unit +
number of units purchased on August 1 x Cost per unit) / (Number of units in opening
inventory + number of units purchased on June 1 + number of units purchased on
August 1)

Then, plug that into the Gross margin formula: (Selling price per unit - weighted-average
cost per unit) x number of units sold 146/21

For each of the following independent inventory errors below indicate the effect
on reported income/profit for the year ended December 31 2020
A

Which of the following is not an inventory account in a manufacturing company?

- Work in process
- Goods available for sale
- Finished goods
- Raw materials

Which of the following should be included in the cost of inventory?

- Warehouse overhead
- The cost of keeping the inventory records
- Receiving and inspection costs
- Amortization on the inventory warehouse

On March 10, Frazier Company received merchandise for resale from its normal
supplier. The invoice price was $3,600 with terms of 2/10, n/30 for 100 units of
Part #345. The invoice was paid on March 17. Freight costs were $120 and the
company paid $108 of interest on a loan to buy the inventory. What is the unit
cost that should be recorded for each of the 100 units of Part #345?
- $36.00
- $36.48
- 3600+120x0.98
- 2% discount due to paying within 10 days
- $37.56
- $37.20

Chapter 8 Mini Quiz

How much will the building be recorded at? Round your answer to the nearest
dollar.
Find the percentage of the total amount through checking the appraisal, then add
renovation.

What is the book value of the equipment as of December 31st, year 3. - Double
Declining
(Cost - Accumulated depreciation) x (2 / useful life) = depreciation expense

Calculate the gain or loss on disposal - straight line method

(Cost - Residual Value) x (1 / useful life) = Depreciation expense

Depletion is recorded for which of the following?

- Uncollectable trade receivables
- Intangible assets
- Natural resources
- Land and Buildings

All of the following are examples of intangible assets except:

- Trademarks
- Research costs
- Franchises
- Copyrights

Intangible assets
- Must be reported under the heading Property, Plant, and Equipment
- Are reported separately from property, plant and equipment
- Are not reported on the statement of financial position because they lack physical
substance
- Are reported under current assets