ACC 423 latest finals MCQ paper with 100% score guaranteed

ACC 423 latest finals MCQ paper with 100% score guaranteed

1. no-par stock should be carried in the accounts at issue price without any additional paid-in capital reported.2. Companies should record stock issued for services or noncash property at either the fair value of the stock issued or the fair value of the consideration received.3. A primary source of stockholders equity is4. Direct costs incurred to sell stock such as underwriting costs should be accounted for as1. a reduction of additional paid-in capital.2. an expense of the period in which the stock is issued.3. an intangible asset.5. When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited?6. Chang Corporation issued $6,000,000 of 9%, ten-year convertible bonds on July 1, 2012 at 96.1 plus accrued interest. The bonds were dated April 1, 2012 with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2013, $1,200,000 of these bonds were converted into 500 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion.If interest payable were credited when the bonds were issued, what should be the amount of the debit to interest expense on October 1, 2012?7. Chang Corporation issued $6,000,000 of 9%, ten-year convertible bonds on July 1, 2012 at 96.1 plus accrued interest. The bonds were dated April 1, 2010 with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2013, $1,200,000 of these bonds were converted into 500 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion.What was the effective interest rate on the bonds when they were issued?8. In 2012, Eklund, Inc., issued for $103 per share, 80,000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Eklunds $25 par value common stock at the option of the preferred stockholder. In August 2013, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock?9. On May 1, 2012, Payne Co. issued $500,000 of 7% bonds at 103, which are due on April 30, 2022. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Paynes common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2012, the fair value of Paynes common stock was $35 per share and of the warrants was $2.On May 1, 2012, Payne should record the bonds with a10. On May 1, 2012, Marly Co. issued $1,000,000 of 7% bonds at 103, which are due on April 30, 2022. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Marlys common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2012, the fair value of Marlys common stock was $35 per share and of the warrants was $2.On May 1, 2012, Marly should credit Paid-in Capital from Stock Warrants for11. Koehn Corporation accounts for its investment in the common stock of Sells Company under the equity method. Koehn Corporation should ordinarily record a cash dividend received from Sells as12. When an investment in a held-to-maturity security is transferred to an available-for-sale security, the carrying value assigned to the available-for-sale security should be13. All of the following statements regarding accounting for derivatives are correct except that14. Which of the following are considered equity securities?Convertible debt.Redeemable preferred stock.Call or put options.15. Under U.S. GAAP, which of the following models may be used to determine if an investment is consolidated? Risk-and-reward modelVoting-interest approach16. A major distinction between temporary and permanent differences is17. Which of the following differences would result in future taxable amounts?18. Which of the following will not result in a temporary difference?19. A company records an unrealized loss on short-term securities. This would result in what type of difference and in what type of deferred income tax?Type of DifferenceDeferred Tax20. With regard to uncertain tax positions, the FASB requires that companies recognize a tax benefit when21. The Accumulated Other Comprehensive Income (G/L) account is amortized only if it exceeds 10 percent of the larger of the beginning balances of the projected benefit obligation or the market-related plan assets value.22. Under U.S. GAAP companies may either recognize actuarial gains and losses in income immediately or amortize them over the expected service lives of employees.23. The projected benefit obligation is the measure of pension obligation that24. Vested benefits25. The interest on the projected benefit obligation component of pension expense26. Ventura Corporation purchased machinery on January 1, 2012 for $840,000. The company used the sum-of-the-years-digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. In 2013, Ventura changed to the straight-line depreciation method for this asset. The following facts pertain:20122013Straight-line$140,000$140,000Sum-of-the-years-digits240,000200,000Ventura is subject to a 40% tax rate. The cumulative effect of this accounting change on beginning retained earnings is27. During 2013, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years appear below:Completed-ContractPercentage-of-Completion2011$ 475,000$ 700,0002012625,000950,0002013700,0001,050,000$1,800,000$2,700,000Assuming an income tax rate of 40% for all years, the affect of this accounting change on prior periods should be reported by a credit of28. On January 1, 2010, Nobel Corporation acquired machinery at a cost of $800,000. Nobel adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2013, a decision was made to change to the double-declining balance method of depreciation for this machine.The amount that Nobel should record as depreciation expense for 2013 is29. Heinz Company began operations on January 1, 2012, and uses the FIFO method in costing its raw material inventory. Management is contemplating a change to the LIFO method and is interested in determining what effect such a change will have on net income. Accordingly, the following information has been developed:Final Inventory20122013FIFO$ 640,000$ 712,000LIFO560,000636,000Net Income (computed under the FIFO method)980,0001,030,000Based on the above information, a change to the LIFO method in 2013 would result in net income for 2013 of30. Swift Company purchased a machine on January 1, 2010, for $500,000. At the date of acquisition, the machine had an estimated useful life of six years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2013, Swift determined, as a result of additional information, that the machine had an estimated useful life of eight years from the date of acquisition with no salvage. An accounting change was made in 2013 to reflect this additional information.Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2010, 2011, 2012, and 2013. What should be reported in Swifts income statement for the year ended December 31, 2013, as the cumulative effect on prior years of changing the estimated useful life of the machine?


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