ACCT351v14IntermediateFinancialAccountingI Practice r4 r4 r4 r4 r4r4
Final Examination 1 COMPLETE ACTUAL MATERIAL
r4 r4 r4 r4 r4 r4 r4
PREVIEW Athabasca University r4 r4 r4
IntermediateFinancialAccountingIPractice r4 r4 r4 r4
Final Examination r4 r4
Instructions to the Student: r4 r4 r4
1. This practice exam is intended to provide a sample of various learning concepts covered
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
after the midterm exam. The practice examination questions may not be the same as the
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
actual examination questions. The actual exam is based on any of the learning objectives
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
from the textbook that are identified in the ACCT 351 course lessons.
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2. In order to provide the best feedback on areas that require additional study, you should write
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
this practice exam as a closed-book examination without the useofbooks ornotes.
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
3. Thisexamination contributes 0%toyourgradeinthiscourse. Itisdesigned witha
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
comprehensive format for study purposes only.
r4 r4 r4 r4 r4 r4
4. Thebreakdown forthis examination is asfollows:
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Part Description
1 Written Response/Theory r4
2 Short Calculations r4
3 AccountsReceivable r4
4 Inventory
5 Investments
6 Assets
7 Intangibles
Note: For alljournal entries, explanationsarenot required.
r4 r4 r4 r4 r4 r4 r4 r4
Showcalculations whereverpossible. Ifyouneedacalculatortodetermineanamount,then that
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
calculation should be shown.
r4 r4 r4 r4
,Part 1: Written Response/Theory
r4 r4 r4 r4
Note: The questions in Part 1areexamples only. Any of thelearningobjectives inthe coursethat deal
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
with accounting theory may be examined in the actual examination, so it is important to review and
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
understand all the objectives. The Summary of Learning Objectives in the textbook is a good place to
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
start this type of review.
r4 r4 r4 r4 r4
When youareansweringwritten responsequestionsworth severalmarks,thinkabout what, why,
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
when, and how to answer the question fully.
r4 r4 r4 r4 r4 r4 r4 r4
Completeeach unrelated question. r4 r4 r4
1. When an asset isheld forsale, whatbasis isused todeterminetheamount toreport on the
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
Balance Sheet, and how is it presented on the Balance Sheet?
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2. Differentiatebetweenaperiodicandperpetual inventorysystem. r4 r4 r4 r4 r4 r4 r4
3. Explaintheconceptsofothercomprehensiveincome,comprehensiveincome, and
r4 r4 r4 r4 r4 r4 r4 r4 r4
accumulated other comprehensive income.
r4 r4 r4 r4
4. When anote is received forproperty and themarket rate isunknown,how is the
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
transaction’s fair valuedetermined? How is fair value determined when neitherthe market rate r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
nor the property’s fair value is known?
r4 r4 r4 r4 r4 r4 r4
, Part 2: Short Calculations
r4 r4 r4 r4
Completeeachunrelated question. r4 r4 r4
1. Jackson Inc.purchased factory equipment that was installed and put intoservice January 2, r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2019, at a total cost of $90,000. Residual value was estimated at $6,000. The equipment is
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
beingdepreciated over4 yearsusing the doubledeclining balance method. For the year 2020,
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
what should Jackson record for depreciation expense on this equipment?
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2. Morpurgo Enterprises purchased a new machine for $60,000 on April 1, 2014. At that time, r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
the company expected to use the machine for 9 years and then sell it for $6,000. The
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
companyhas a calendar year accounting period. The machinewas sold for $33,000 on Sept
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
30, 2019. Assuming straight-line depreciation, no depreciation in the year of acquisition,
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
and a full year of depreciation in the year of retirement, what would be the gain to be
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
recognized at the time of sale?
r4 r4 r4 r4 r4 r4
3. Makeshift Co. purchased land as a factory site for $500,000. Makeshift paid $20,000 to tear r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
down two buildings on the land. Salvage was sold for $2,700. Legal fees of $1,740 were paid
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
for title investigation and making the purchase. Architect’s fees were $20,600. Title
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
insurance cost $1,200 and liability insurance during construction cost $1,300. Excavation
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
cost $5,220. The contractor was paid$1,200,000. An assessment madebythe city for
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
pavement was $3,200. Interest costs during construction were $85,000. Training costs for
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
employees in charge of building maintenance for the new air quality systems were$10,000.
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
a. What is the cost of the land that should berecorded? r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
b. What is the cost of the building that should berecorded? r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
4. ExquisitePensCorporation hastwoproductsinitsendinginventory,eachaccounted for at the r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
lower of cost and net realizable value. A profit margin of 30% on selling price is considered
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
normal for each product. Specific data with respect to each product follows:
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
FancyAD-15FantasticAD-wow r4 r4 r4
Historicalcost r4 $30.00 $95.00
Estimated cost to dispose r4 r4 r4 10.00 26.00
Estimatedselling price r4 r4 70.00 120.00
In pricing itsendinginventoryusingthelowerofcost andnetrealizablevalue,what unit
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
values should Exquisite Pens use for Fancy AD-15 and Fantastic AD-wow, respectively?
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
5. On April15thofthecurrent year,afiredestroyed theentireuninsured inventory of
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
Marco retail store. The following data are available:
r4
r4 r4 r4 r4 r4 r4 r4
Sales, January 1 through April 15 r4 r4 r4 r4 r4 $450,000
Inventory,January1 r4 r4 75,000
Purchases,January 1 through April 15 r4 r4 r4 r4 r4 375,000
Markup on cost r4 r4 25%
Whatisthe estimated amount of theinventoryloss? r4 r4 r4 r4 r4 r4 r4 r4
Final Examination 1 COMPLETE ACTUAL MATERIAL
r4 r4 r4 r4 r4 r4 r4
PREVIEW Athabasca University r4 r4 r4
IntermediateFinancialAccountingIPractice r4 r4 r4 r4
Final Examination r4 r4
Instructions to the Student: r4 r4 r4
1. This practice exam is intended to provide a sample of various learning concepts covered
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
after the midterm exam. The practice examination questions may not be the same as the
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
actual examination questions. The actual exam is based on any of the learning objectives
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
from the textbook that are identified in the ACCT 351 course lessons.
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2. In order to provide the best feedback on areas that require additional study, you should write
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
this practice exam as a closed-book examination without the useofbooks ornotes.
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
3. Thisexamination contributes 0%toyourgradeinthiscourse. Itisdesigned witha
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
comprehensive format for study purposes only.
r4 r4 r4 r4 r4 r4
4. Thebreakdown forthis examination is asfollows:
r4 r4 r4 r4 r4 r4 r4
Part Description
1 Written Response/Theory r4
2 Short Calculations r4
3 AccountsReceivable r4
4 Inventory
5 Investments
6 Assets
7 Intangibles
Note: For alljournal entries, explanationsarenot required.
r4 r4 r4 r4 r4 r4 r4 r4
Showcalculations whereverpossible. Ifyouneedacalculatortodetermineanamount,then that
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
calculation should be shown.
r4 r4 r4 r4
,Part 1: Written Response/Theory
r4 r4 r4 r4
Note: The questions in Part 1areexamples only. Any of thelearningobjectives inthe coursethat deal
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
with accounting theory may be examined in the actual examination, so it is important to review and
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
understand all the objectives. The Summary of Learning Objectives in the textbook is a good place to
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
start this type of review.
r4 r4 r4 r4 r4
When youareansweringwritten responsequestionsworth severalmarks,thinkabout what, why,
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
when, and how to answer the question fully.
r4 r4 r4 r4 r4 r4 r4 r4
Completeeach unrelated question. r4 r4 r4
1. When an asset isheld forsale, whatbasis isused todeterminetheamount toreport on the
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
Balance Sheet, and how is it presented on the Balance Sheet?
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2. Differentiatebetweenaperiodicandperpetual inventorysystem. r4 r4 r4 r4 r4 r4 r4
3. Explaintheconceptsofothercomprehensiveincome,comprehensiveincome, and
r4 r4 r4 r4 r4 r4 r4 r4 r4
accumulated other comprehensive income.
r4 r4 r4 r4
4. When anote is received forproperty and themarket rate isunknown,how is the
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
transaction’s fair valuedetermined? How is fair value determined when neitherthe market rate r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
nor the property’s fair value is known?
r4 r4 r4 r4 r4 r4 r4
, Part 2: Short Calculations
r4 r4 r4 r4
Completeeachunrelated question. r4 r4 r4
1. Jackson Inc.purchased factory equipment that was installed and put intoservice January 2, r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2019, at a total cost of $90,000. Residual value was estimated at $6,000. The equipment is
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
beingdepreciated over4 yearsusing the doubledeclining balance method. For the year 2020,
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
what should Jackson record for depreciation expense on this equipment?
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
2. Morpurgo Enterprises purchased a new machine for $60,000 on April 1, 2014. At that time, r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
the company expected to use the machine for 9 years and then sell it for $6,000. The
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
companyhas a calendar year accounting period. The machinewas sold for $33,000 on Sept
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
30, 2019. Assuming straight-line depreciation, no depreciation in the year of acquisition,
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
and a full year of depreciation in the year of retirement, what would be the gain to be
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
recognized at the time of sale?
r4 r4 r4 r4 r4 r4
3. Makeshift Co. purchased land as a factory site for $500,000. Makeshift paid $20,000 to tear r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
down two buildings on the land. Salvage was sold for $2,700. Legal fees of $1,740 were paid
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
for title investigation and making the purchase. Architect’s fees were $20,600. Title
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
insurance cost $1,200 and liability insurance during construction cost $1,300. Excavation
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
cost $5,220. The contractor was paid$1,200,000. An assessment madebythe city for
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
pavement was $3,200. Interest costs during construction were $85,000. Training costs for
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
employees in charge of building maintenance for the new air quality systems were$10,000.
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
a. What is the cost of the land that should berecorded? r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
b. What is the cost of the building that should berecorded? r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
4. ExquisitePensCorporation hastwoproductsinitsendinginventory,eachaccounted for at the r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
lower of cost and net realizable value. A profit margin of 30% on selling price is considered
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
normal for each product. Specific data with respect to each product follows:
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
FancyAD-15FantasticAD-wow r4 r4 r4
Historicalcost r4 $30.00 $95.00
Estimated cost to dispose r4 r4 r4 10.00 26.00
Estimatedselling price r4 r4 70.00 120.00
In pricing itsendinginventoryusingthelowerofcost andnetrealizablevalue,what unit
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
values should Exquisite Pens use for Fancy AD-15 and Fantastic AD-wow, respectively?
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
5. On April15thofthecurrent year,afiredestroyed theentireuninsured inventory of
r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4 r4
Marco retail store. The following data are available:
r4
r4 r4 r4 r4 r4 r4 r4
Sales, January 1 through April 15 r4 r4 r4 r4 r4 $450,000
Inventory,January1 r4 r4 75,000
Purchases,January 1 through April 15 r4 r4 r4 r4 r4 375,000
Markup on cost r4 r4 25%
Whatisthe estimated amount of theinventoryloss? r4 r4 r4 r4 r4 r4 r4 r4
