• ACCT 559 Week 8 | Final Exam (Fall 2018)

Questions 1-15:

1.   (TCO A) Amazon Building, Inc. won a bid for a new warehouse building contract. Below is information from the project accountant.

2.  (TCO B) At the beginning of 2015, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2015, pretax financial income was $826,000 and the tax rate was 35%.

3.   (TCO C) Presented below is pension information related to Amazing Goods, Inc. for the year 2016.

4.   (TCO C) Apple Dumpling, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2016.

5.  (TCO D) Animal, Inc. leased equipment from Zoo Enterprises under a 5-year lease requiring equal annual payments of $63,000, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 5-year useful life and no salvage value. Animal, Inc.’s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Assuming that this lease is properly classified as a capital lease, what is the amount of interest expense recorded by Animal, Inc. in the first year of the asset’s life?

6.   (TCO E) On December 31, 2016, Bob's Trucking, Inc. appropriately changed its inventory valuation method from weighted-average cost to FIFO method for financial statement and income tax purposes. The change will result in an $800,000 increase in the beginning inventory at January 1, 2016. Assume a 40% income tax rate. The cumulative effect of this accounting change on beginning retained earnings is

7.    (TCO E) Which of the following is not a change in accounting estimate?

8.    (TCO F) Amazing Glory, Inc. recognized a net income of $206,300 including $32,000 in depreciation expense.

9.    (TCO G) Which of the following events that occurred after the balance sheet date but before issuance of the financial statements would generally require disclosure, but no adjustment of the financial statements?

10.  (TCO G) Adventure, Inc. is a company that operates in four different divisions. The following information relating to each segment is available for 201x.

11.  (TCO A) Adam's Adorable Creations Company provided the following financial information for its installment sales for the current year.

12.  (TCO B) The Accent Corporation shows the following information.

13.  (TCO D) Absolute Leasing, Inc. agrees to lease equipment to Allen, Inc. on January 1, 2015. They agree on the following terms:

14.  (TCO F) Drexon Corp., which follows U.S. GAAP, uses the direct method to report its cash flows. The CFO is assessing the impact on cash flows of 12 events during the fiscal year. Specify which category each event falls under (under the direct method) and note whether it increases cash, decreases cash, or has no impact on cash:

15.  (TCO G) The following information pertains to Allbright, Inc.

ACCT 559 Week 8 | Final Exam (Fall 2018)

  • Institution(s): Devry
  • Year Published: 2021
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