ACCT 551 Intermediate Accounting II DeVry

Vist: www.academicguider.com

If you are interested for multiple products, please click on the button!
Shopping Cart
ACCT 551 Week 1 Quiz
Price: USD 10
1. Question: (TCO C) The total amount of patent cost amortized to date is usually
2. Question: (TCO C) When developing computer software to be sold, which of the following
costs should be capitalized?
3. Question: (TCO C) Jeff Corporation purchased a limited-life intangible asset for $120,000 on
May 1, 2008. It has a useful life of 10 years. What total amount of amortization expense should
have been recorded on the intangible asset by December 31, 2010?
4. Question: (TCO C) On January 2, 2011, Klein Co. bought a trademark from Royce, Inc. for
$1,000,000. An independent research company estimated that the remaining useful life of the
trademark was 10 years. Its unamortized cost on Royce's books was $800,000. In Klein's 2011
income statement, what amount should be reported as amortization expense?
5. Question: (TCO C) The following information is available for Barkley Company's patents:
Barkley would record a loss on impairment of

Vist: www.academicguider.com
ACCT 551 Week 3 Quiz
Price: USD 10
1. Question : (TCO D) A bond discount should be shown on the balance sheet as:
2. Question : (TCO D) "In-substance defeasance" is a term used to refer to an arrangement
whereby
3. Question : (TCO D) On January 1, 2010, Ellison Co. issued eight-year bonds with a face
value of $1,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and
December 31. The bonds were sold to yield 8%. Table values are:
4. Question : (TCO D) On January 1, 2010, Crown Company sold property to Leary Company.
There was no established exchange price for the property, and Leary gave Crown a $2,000,000
zero-interest-bearing note payable in five equal annual installments of $400,000, with the first
payment due December 31, 2010. The prevailing rate of interest for a note of this type is 9%. The
present value of the note at 9% was $1,442,000 at January 1, 2010. What should be the balance
of the Discount on Notes Payable account on the books of Leary at December 31, 2010 after
adjusting entries are made, assuming that the effective-interest method is used?
5. Question : (TCO D) On January 1, 2006, Goll Corp. issued 1,000 of its 10%, $1,000 bonds
for $1,040,000. These bonds were to mature on January 1, 2016, but were callable at 101 any
time after December 31, 2009. Interest was payable semiannually on July 1 and January 1. On
July 1, 2011, Goll called all of the bonds and retired them. Bond premium was amortized on a
straight-line basis. Before income taxes, Goll's gain or loss in 2011 on this early extinguishment
of debt was

Vist: www.academicguider.com
ACCT 551 Week 5 Quiz
Price: USD 15
1. Question: (TCO E) Stockholders' equity is generally classified into two major categories:
2. Question: (TCO E) A primary source of stockholders' equity is (Points : 4)
3. Question: (TCO E) A "secret reserve" will be created if
4. Question: (TCO E) Which of the following represents the total number of shares that a

corporation may issue under the terms of its charter? (Points : 4)

5. Question: (TCO E) Norton Company issues 4,000 shares of its $5 par value common stock
having a market value of $25 per share, and 6,000 shares of its $15 par value preferred stock
having a market value of $20 per share, all for a lump sum of $192,000. What amount of the
proceeds should be allocated to the preferred stock?
6. Question: (TCO F) Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative
preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31,
2011. There were no dividends declared in 2009. The board of directors declares and pays a
$45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common
stockholders in 2011?
7. Question: (TCO F) Colson Inc. declared a $160,000 cash dividend. It currently has 6,000
shares of 7%, $100 par value cumulative preferred stock outstanding. It is 1 year in arrears on its
preferred stock. How much cash will Colson distribute to the common stockholders?
6,000 x 7% x 100 = $42,000 owed to preferred shareholders each year.
160,000 - 42,000 preferred dividends in arrears - 42,000 preferred current dividends =
A. $76,000. (Points : 4)
8. (TCO F) Written, Inc. has 300,000 outstanding shares of $2 par common stock and 60,000
shares of no-par 8% preferred stock with a stated value of $5. The preferred stock is cumulative
and nonparticipating. Dividends have been paid in every year except the past 2 years and the
current year.
Assuming that $63,000 will be distributed as a dividend in the current year, how much will the
preferred stockholders receive? (Points : 4)

Vist: www.academicguider.com
ACCT 551 Week 7 Quiz
Price: USD 10
1. Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying
$376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The
discount of $23,900 provides an effective yield of 11%. Patton Company uses the effectiveinterest method and plans to hold these bonds to maturity.
For the year ended December 31, 2011, Patton Company should report interest revenue from the
Scott Co. bonds of (Points : 4)
2. (TCO B) On October 1, 2010, Menke Co. purchased (to hold to maturity) 200, $1,000, 9%
bonds for $208,000. An additional $6,000 was paid for accrued interest. Interest is paid
semiannually on December 1 and June 1, and the bonds mature on December 1, 2014. Menke
uses straight-line amortization. Ignoring income taxes, the amount reported in Menke's 2010
income statement from this investment should be (Points : 4)
3. (TCO B) On its December 31, 2010 balance sheet, Calhoun Company appropriately reported
a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account.
There was no change during 2011 in the composition of Calhoun's portfolio of marketable equity
securities held as available-for-sale securities. The following information pertains to that
portfolio:.....................
What amount of unrealized loss on these securities should be included in Calhoun's stockholders'
equity section of the balance sheet at December 31, 2011? (Points : 4)
4. (TCO B) On December 29, 2011, James Co. sold an equity security that had been purchased
on January 4, 2010. James owned no other equity securities. An unrealized holding loss was
reported in the 2010 income statement. A realized gain was reported in the 2011 income
statement. Was the equity security classified as available for sale, and did its 2010 market price
decline exceed its 2011 market price recovery?

5. (TCO B) Rich, Inc. acquired 30% of Doane Corp.'s voting stock on January 1, 2010 for
$400,000. During 2010, Doane earned $160,000 and paid dividends of $100,000. Rich's 30%
interest in Doane gives Rich the ability to exercise significant influence over Doane's operating
and financial policies. During 2011, Doane earned $200,000 and paid dividends of $60,000 on
April 1 and $60,000 on October 1. On July 1, 2011, Rich sold half of its stock in Doane for
$264,000 cash. What should be the gain on sale of this investment in Rich's 2011 income
statement? (Points : 4)

Vist: www.academicguider.com
ACCT 551 Week 4 Midterm (Version 1)
Price: USD 25
1. Question: (TCO C) The cost of an intangible asset includes all of the following except
2. Question: (TCO C) Wriglee, Inc. went to court this year and successfully defended its patent
from infringement by a competitor. The cost of this defense should be charged to
3. Question: (TCO C) Negative goodwill arises when the _____ of the net assets acquired is
higher than the purchase price of the assets.
4. Question: (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008.
It had a useful life of 10 years. On January 1, 2010, ELO spent $22,000 to successfully defend
the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is 5 years. What
amount should be reported for patent amortization expense for 2010?
5. Question: (TCO C) General Products Company bought Special Products Division in 2010
and appropriately recorded $500,000 of goodwill related to the purchase. On December 31, 2011,
the fair value of Special Products Division is $4,000,000 and it is carried on General Products
books for a total of $3,400,000, including the goodwill. An analysis of Special Products
Divisions assets indicates that goodwill of $400,000 exists on December 31, 2011. What
goodwill impairment should be recognized by General Products in 2011?
6. Question: (TCO D) An employee's net (or take-home) pay is determined by gross earnings
minus amounts for income tax withholdings and the employee's
7. Question: (TCO D) Which gives rise to the requirement to accrue a liability for the cost of
compensated absences?
8. Question: (TCO D) Which of the following is not acceptable treatment for the presentation of
current liabilities?
9. Question: (TCO D) Jenkins Corporation has $2,500,000 of short-term debt it expects to retire
with proceeds from the sale of 75,000 shares of common stock. If the stock is sold for $20 per
share subsequent to the balance sheet date, but before the balance sheet is issued, what amount of
short-term debt could be excluded from current liabilities?
10. Question: (TCO D) Tender Foot, Inc. is involved in litigation regarding a faulty product sold
in a prior year. The company has consulted with its attorney and determined that it is possible
that it may lose the case. The attorneys estimated that there is a 40% chance of losing. Tender
Foots attorney estimated that if it loses, then the amount of any payment would be $500,000.
What is the required journal entry as a result of this litigation?
11. Question: (TCO D) Reich, Inc. issued bonds with a maturity amount of $200,000 and a
maturity 10 years from date of issue. If the bonds were issued at a premium, this indicates that
12. Question: (TCO D) If bonds are issued between interest dates, the entry on the books of the
issuing corporation could include a
13. Question: (TCO D) On January 1, 2010, Ellison Co. issued 8-year bonds with a face value
of $1,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December

31. The bonds were sold to yield 8%. Table values are as follows:
14. Question: (TCO D) A company issues $5,000,000, 7.8%, 20-year bonds to yield 8% on
January 1, 2010. Interest is paid on June 30 and December 31. The proceeds from the bonds are
$4,901,036. Using effective-interest amortization, how much interest expense will be recognized
in 2010?
15. Question: (TCO D) On January 1, Martinez Inc. issued $3,000,000, 11% bonds for
$3,195,000. The market rate of interest for these bonds is 10%. Interest is payable annually on
December 31. Martinez uses the effective-interest method of amortizing bond premium. At the
end of the first year, Martinez should report unamortized bond premium of
1. Question: (TCO C) Intangible assets may be internally generated or purchased from another
party. In either case, the cost that should be included in the initial valuation of the asset is an
issue.
2. Question: (TCO C) Under what circumstances is it appropriate to record goodwill in the
accounts? How should goodwill, properly recorded on the books, be written off in accordance
with generally accepted accounting principles?
3. Question: (TCO D) Irving Music Shop gives its customers coupons redeemable for a poster
plus a Dixie Chicks CD. One coupon is issued for each dollar of sales. On the surrender of 100
coupons and $5.00 cash, the poster and CD are given to the customer. It is estimated that 80% of
the coupons will be presented for redemption. Sales for the first period were $700,000, and the
coupons redeemed totaled 340,000. Sales for the second period were $840,000, and the coupons
redeemed totaled 850,000. Irving Music Shop bought 20,000 posters at $2.00/poster and 20,000
CDs at $6.00/CD.
4. Question: (TCO D) On January 1, 2011, Piper Co. issued 10-year bonds with a face value of
$1,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31.
The bonds were sold to yield 12%. Table values are:
5. Question: (TCO D) Prepare journal entries to record the following retirement. (Show
computations and round to the nearest dollar). The December 31, 2010 balance sheet of Wolfe
Co. included the following items:
7.5% bonds payable due December 31, 2018 $1,200,000
Unamortized discount on bonds payable
48,000
The bonds were issued on December 31, 2008 at 95, with interest payable on June 30 and
December 31. (Use straight-line amortization)
On April 1, 2011, Wolfe retired $240,000 of these bonds at 101 plus accrued interest.

Vist: www.academicguider.com
ACCT 551 Week 4 Midterm (Version 2)
Price: USD 25
Multiple Choice
1. Question: (TCO C) The cost of an intangible asset includes all of the following except
2. Question: (TCO C) Which of the following is not an intangible asset?
3. Question: (TCO C) The intangible asset goodwill may be
4. Question: (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008.
It had a useful life of ten years. On March 1, 2010, ELO spent $17,500 to successfully defend the
patent in a lawsuit. ELO feels that as of that date, the remaining useful life is five years. What
amount should be reported for patent amortization expense for 2010?
5. Question: (TCO C) Floyd Company purchases Haeger Company for $800,000 cash on
January 1, 2011. The book value of Haeger Companys net assets, as reflected on its December

31, 2010 balance sheet, is $620,000. An analysis by Floyd on December 31, 2010 indicates that
the fair value of Haegers tangible assets exceeded the book value by $60,000, and the fair value
of identifiable intangible assets was equal to book value. How much goodwill should be
recognized by Floyd Company when recording the purchase of Haeger Company?
6. Question: (TCO D) An employees net (or take-home) pay is determined by gross earnings
minus amounts for income tax withholdings and the employees
7. Question: (TCO D) Assume that a manufacturing corporation has (1) good quality control,
(2) a one-year operating cycle, (3) a relatively stable pattern of annual sales, and (4) a continuing
policy of guaranteeing new products against defects for one year that has resulted in material but
rather stable warranty repair and replacement costs. Any liability for the warranty
8. Question: (TCO D) On December 31, 2010, Irey Co. has $2,000,000 of short-term notes
payable due on February 14, 2011. On January 10, 2011, Irey arranged a line of credit with
County Bank which allows Irey to borrow up to $1,700,000 at one percent above the prime rate
for three years. On February 2, 2011, Irey borrowed $1,700,000 from County Bank and used
$300,000 additional cash to liquidate $1,700,000 of the short-term notes payable. The amount of
the short-term notes payable that should be reported as current liabilities on the December 31,
2010 balance sheet which is issued on March 5, 2011 is
9. Question: (TCO D) Tender Foot Inc. is involved in litigation regarding a faulty product sold
in a prior year. The company has consulted with its attorney and determined that it is possible
that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this
is the case, their attorney estimated that the amount of any payment would be $500,000. What is
the required journal entry as a result of this litigation?
10. Question: (TCO D) Reich, Inc. issued bonds with a maturity amount of $200,000 and a
maturity ten years from date of issue. If the bonds were issued at a discount this indicates that
11. Question: (TCO D) If bonds are initially sold at a discount and the straight-line method of
amortization is used, interest expense in the earlier years will
12. Question: (TCO D)When the interest payment dates of a bond are June 1 and December 1,
and a bond issue is sold on November 1, the amount of cash received by the issuer will be
13. Question: (TCO D) Feller Company issues $20,000,000 of ten-year, 9% bonds on August 1,
2010 at 97 plus accrued interest. The bonds are dated January 1, 2010, and pay interest annually
on December 31. What is the total cash received on the issue date?
14. Question: (TCO D) A company issues $5,000,000, 7.8/%, 20-year bonds to yield 8% on
January 1, 2010. Interest is paid on December 31. The proceeds from the bonds are $4,901,036.
Using effective-interest amortization, how much interest expense will be recognized in 2010?
15. Question: (TCO D) On January 1, Martinez Inc. issued $3,000,000, 11% bonds for
$3,195,000. The market rate of interest for these bonds is 10%. Interest is payable annually on
December 31. Martinez uses the effective-interest method of amortizing bond premium. At the
end of the first year, Martinez should report unamortized bond premium of:
Explanatory
1. Question: (TCO C) Sisco Co. purchased a patent from Thornton Co. for $180,000 on July 1,
2007. Sisco amortizes the patent over a period of 10 years. Expenditures of $92,000 for
successful litigation in defense of the patent were paid on July 1, 2011. Sisco estimates that the
useful life of the patent will be increase by 10 years from the date of litigation becasue of
successfully defending it
Instructions:
Prepare a computation of the carrying value of the patent at December 31, 2011.
2. Question: (TCO C) Freds Company is considering the write-off of a limited life intangible
asset because of its lack of profitability. Explain to the management of Freds how to determine
whether a writeoff is permitted.
3. Question: (TCO D) Edwards Co. includes one coupon in each bag of dog food it sells. In
return for four coupons, customers receive a dog toy that the company purchases for $1.20 each.
Edwardss experience indicates that 60 percent of the coupons will be redeemed. During 2010,

100,000 bags of dog food were sold, 12,000 toys were purchased, and 40,000 coupons were
redeemed. During 2011, 120,000 bags of dog food were sold, 16,000 toys were purchased, and
60,000 coupons were redeemed.
Instructions:
Determine the premium expense to be reported in the income statement and the estimated
liability for premiums on the balance sheet for 2010 and 2011.
4. Question: (TCO D) Prepare journal entries to record the following transactions related to
long-term bonds of Quirk Co.
(a) On April 1, 2009, Quirk issued $500,000, 9% bonds for $537,868 including accrued interest.
Interest is payable annually on January 1, and the bonds mature on January 1, 2019.
(b) On July 1, 2011 Quirk retired $150,000 of the bonds at 102 plus accrued interest. Quirk uses
straight-line amortization.
5. Question: (TCO D) Mann, Inc., which owes Doran Co. $600,000 in notes payable with
accrued interest of $54,000, is in financial difficulty. To settle the debt, Doran agrees to accept
from Mann equipment with a fair value of $570,000, an original cost of $840,000, and
accumulated depreciation of $195,000.
Instructions:
(a) Compute the gain or loss to Mann on the settlement of the debt.
(b) Compute the gain or loss to Mann on the transfer of the equipment.

Vist: www.academicguider.com
ACCT 551 Week 8 Final Exam
Price: USD 25
1. (TCO C) Redstone Company spent $190,000 developing a new process, $45,000 in legal fees
to obtain a patent, and $91,000to market the process that was patented. How should these costs
be accounted for in the year they are incurred?
2. (TCO D) Total payroll of Watson Co. was $920,000, of which $160,000 represented amounts
paid in excess of $100,000 tocertain employees. The amount paid to employees in excess of
$7,000 was $720,000. Income taxes withheld were $225,000.The state unemployment tax is
1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an
employeeswages to $100,000 and 1.45% in excess of $100,000.
(a)Prepare the journal entry for the wages and salaries paid.
(b)Prepare the entry to record the employer payroll taxes.
3. (TCO D). Prepare journal entries to record the following retirement.(Show computations
and round to the nearest dollar.)The December 31, 2010 balance sheet of Wolfe Co. included the
following items:
7.5% bonds payable due December 31, 2018 $1,200,000Unamortized discount on bonds paya
ble 48,000
The bonds were issued on December 31, 2008 at 95, with interest payable on June 30
and December 31.(Use straight-lineamortization.)
On April 1, 2011, Wolfe retired $240,000 of these bonds at 101 plus accrued interest.
4. (TCO E) Parker Corporation has issued 2,000 shares of common stock and 400 shares of
preferred stock for a lump sum of$72,000 cash.Instructions(a)Give the entry for the issuance
assuming the par value of the common was $5 and the market value $30, and the par value ofthe
preferred was $40 and the market value $50. (Each valuation is on a per share basis and there are
ready markets for eachstock.)(b)Give the entry for the issuance assuming the same facts as
(a) above except the preferred stock has no ready market value,and the common stock has a
market value of $25 per share.
5. (TCO F) The stockholders equity section of Lemay Corp shows the following on Dec 31,

2011:
Preferred stock- 6% $100 par, $4000 shares outstanding$400,000
Common Stock-$10 par, 60,000 shares outstanding$600,000
Paid-in capital in excess of par$200,000
Retained earnings$114,000
Total stockholders equity$1,314,000
Instructions: Assuming that all of the companys retained earnings are to be paid out in
dividends on 12/31/11 and that preferred dividendswere last paid on 12/31/09, show how much
the preferred and common stockholders should receive if the preferred stock iscumulative and
fully participating.
6. (TCO A) At December 31, 2010, Sager Co. had 1,200,000 shares of common stock
outstanding. In addition, Sager had450,000 shares of preferred stock which were convertible into
750,000 shares of common stock. During 2011, Sager paid$600,000 cash dividends on the
common stock and $400,000 cash dividends on the preferred stock. Net income for 2011
was$3,400,000 and the income tax rate was 40%. What would be the diluted earnings per share
for 2011 (rounded to the nearestpenny)? Please show all computations.
7. (TCO B) On May 1, 2010, Kirmer Corp. purchased $450,000 of 12% bonds, interest payable
on January 1 and July 1, for$422,800 plus accrued interest. The bonds mature on January 1,
2016. Amortization is recorded when interest is received by thestraight-line method (by months
and rounded to the nearest dollar). (Assume bonds are available for sale.)
Instructions(a)prepare the entry for May 1, 2010.(b)The bonds are sold on August 1, 2011
for $425,000 plus accrued interest. Prepare all entries required to properly record thesal

Vist: www.academicguider.com