ACC 557 Final Exam Part 1 â€¢ Question 1 Grimwood Trucking purchased a tractor trailer for $171,500. Interline uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. Salvage value is estimated to be $24,500. If the truck is driven 90,000 miles in its first year, how much depreciation expense should Grimwood record? â€¢ Question 2 Natural resources are â€¢ Question 3 Mehring Company reported net sales of $540,000, net income of $72,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company’s asset turnover? â€¢ Question 4 The four subdivisions for plant assets are â€¢ Question 5 The amortization period for a patent cannot exceed â€¢ Question 6 A plant asset was purchased on January 1 for $100,000 with an estimated salvage value of $20,000 at the end of its useful life. The current year’s Depreciation Expense is $10,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $50,000. The remaining useful life of the plant asset is â€¢ Question 7 A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is â€¢ Question 8 On October 1, 2015, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2015, balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation? â€¢ Question 9 In the stockholdersâ€™ equity section of the balance sheet, â€¢ Question 10 Farmer Company reports the following amounts for 2015: Net income $135,000 Average stockholdersâ€™ equity 500,000 Preferred dividends 15,000 Par value preferred stock 100,000 The 2015 rate of return on common stockholdersâ€™ equity is â€¢ Question 11 The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is â€¢ Question 12 Art, Inc., has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2015. There were no dividends declared in 2013. The board of directors declares and pays a $45,000 dividend in 2014 and in 2015. What is the amount of dividends received by the common stockholders in 2015? â€¢ Question 13 Ramos Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a â€¢ Question 14 The declaration of a stock dividend will â€¢ Question 15 When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the â€¢ Question 16 Retained earnings is increased by each of the following except â€¢ Question 17 Jarrett Company issued 900 shares of no-par common stock for $13,200. Which of the following journal entries would be made if the stock has no stated value? â€¢ Question 18 Hardy Company has current assets of $95,000, current liabilities of $100,000, long-term assets of $180,000 and long-term liabilities of $80,000. Hardy Company’s working capital and its current ratio are: â€¢ Question 19 A corporation recognizes a gain or loss â€¢ Question 20 Bonds issued against the general credit of the borrower are called â€¢ Question 21 Admire County Bank agrees to lend Givens Brick Company $600,
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