ACCT 311 Final Exam
1. Callable bonds
2. The net amount of a bond liability that appears on the balance sheet is the
3. Which of the following shareholder rights is most commonly enhanced in an issue of preferred stock?
4. Which of the following statements characterizes an operating lease?
5. One of the four general criteria for a capital lease is that the present value at the beginning Of the lease term of the minimum lease payments equals or exceeds
6. One of the four general criteria for a capital lease specifies that the lease term be equal to or greater than
7. On December 1, 2011, Arm Inc. signed an operating lease for a warehouse for ten
years at $24,000 per year. Upon execution of the lease, Arm paid $48,000 covering rent
for the first two years. How much should be shown in Arm’s income statement for the
year ended December 31, 2011, as rent expense?
8. Fingers uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2014, and 2015, respectively, Fingers should report
9. The balance in the Construction in Progress account at the end of 2014
10. Hands Corporation owns 40,000 of the 100,000 outstanding shares of Arms Inc. common stock. During 2015, Arms earns $640,000 and pays cash dividends of
$480,000. If the beginning balance in Hands’ investment account was $430,000,
the balance at December 31, 2015 should be
11. On June 30, 2014, Able Co. had outstanding 8%, $6,000,000 face amount, 15-year
bonds maturing on June 30, 2024. Interest is payable on June 30 and December 31. The
unamortized balances in the bond discount and deferred bond issue costs accounts on
June 30, 2014 were $210,000 and $60,000, respectively. On June 30, 2014, Able acquired
all of these bonds at 94 and retired them. What net carrying amount should be used in computing
gain or loss on this early extinguishment of debt?
12. The main purpose of reporting diluted earnings per share is to
13. When an investor uses the equity method to account for investments in common stock, cash
dividends received by the investor form the investee should be recorded as
14. The following information relates to the capital structure of Ravens Nation Corp.:
15. The following information is available for Feet Corporation:
16. The UMUC Corporation reported a $66,000 operating loss in 2011. In the preceding
three years, Taylor reported the following income before taxes and paid the indicated
income taxes:
17. Which of the following is a noncash transaction that should be disclosed in a schedule
accompanying the statement of cash flows?
18. The amortization of a bond premium can correctly be presented in the statement of
cash flows in which of the following ways?
19. A contingent liability should be recorded when
20. On January 1, 2011, Bowie Corporation leased a warehouse to Tim under an operating
lease for ten years at $80,000 per year, payable the first day of each lease year. Bowie
Corporation paid $36,000 to a real estate broker as a finder’s fee. The warehouse is
depreciated at $20,000 per year. During 2011, Bowie incurred insurance and property
tax expense totaling $15,000. Bowie’s net rental income for 2011 should be?
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