ACCT 2001 Quiz: ACCT2001 Quiz 2017 Spring Class 01 Review

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ACCT 2001 Full Course Notes

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Class 1 review exercise (introductory chapter) (answer these questions and check answers as soon as possible after each class) Class 1 key concepts: basic financial statement relationships. Sara, inc. reports the following results for fiscal years 2011 and 2010 (amounts in millions): Total assets (balance at the end of each year) Total liabilities (balance at the end of each year) Compute each of the following: net income as a percent of total revenues for (a) 2011 and (b) 2010. Net income for fiscal years (a) 2011 and (b) 2010. Total owners" equity at the end of (a) 2011 and (b) 2010. Dollar amount of increase (decrease) in total revenues from 2010 to 2011. Percentage increase (decrease) in total revenues from 2010 to 2011. Dollar amount of increase (decrease) in total expenses from 2010 to 2011. Percentage increase (decrease) in total expenses from 2010 to 2011. Dollar amount of increase (decrease) in net income from 2010 to 2011.

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Company A had a total deletable capitalized cost of $656,000 for amine acquired in early 2010. It was estimated that the minecontained 820.000 tons of recoverable ore when
production began. During 2010, 20,500 tons were mine, and 41,000tons were mined in 2011.
1. Compute a depletion expense in 2010 and 2011 for financialaccounting purposes. What accounts will be debited and credited torecord depletion?
2. a. In 2010, 20,500 tons of ore were sold for $2,050,000. For taxpurposes, operating expenses of the mine were $500,000. Thetaxpayer may deduct either cost depletion or percentagedepletion,
which for the type ore produced 8% of production sold from mine?Assume that percentage depletion is limited to the amount of netincome from the property. What would be amount of depletion
allowable in 2010?
b. What would be the amount of cost despletion allowable for taxpurposes in 2010, assuming that capitalized mineral costs are thesame for tax purposes as for financial accounting?
c. What will be the amount of depletion based on cost that thecompany could deduct on its tax return in 2011 if it deductspercentage depletion in 2010?
d. Suppose in the first 3 years of mine's life. The company tookpercentage depletion totaling $654.000. Th the 5th year of themine's life, production proceeds were $4,300,000.
How much percentage depletion of cost of mineral?

tanhyena895

McDonaldâs and Buffalo Wild Wings: Comparing two restaurant chains.

McDonaldâs Corporation franchises and operates more than 30,000 fast-service restaurants in 119 countries. Buffalo Wild Wings franchises and operates more than 500 restaurants in the United States. Buffalo Wild Wings features chicken wings and a full bar in its restaurants.

Financial information for each company follows. EBI denotes after-tax earnings before interest

Buffalo Wild Wings
	2007	2008	2009	2010	2011
Number of stores operating at year end
Company owned	161	197	259	319	319
franchised	332	326	420	473	498
Revenue in Millions
Company owned Stores		379.7	488.7	555.2	717.4
Franchise fees		42.7	50.2	58.1	67.1
Total		422.4	538.9	613.3	784.5

McDonaldâs
	2007	2008	2009	2010	2011
Number of stores operating at year end
Company owned	6,906	6502	6262	6399	6435
franchised	25,465	25,465	26,216	26,338	27,075
Revenue in Millions
Company owned Stores		16,560.9	15,458.5	16,233.3	18,292.8
Franchise fees		6,961.5	7,286.2	7,841.3	8,713.2
Total		23,522.4	22,744.7	24,074.6	27,006.0

Required:

Perform a cause-of-change analysis from 2008 to 2011 for each company to disaggregate the increase in revenues from company-owned stores between growth in the average number of average stores open and growth in revenues per store.

Pinkerton Corporation's trial balance at December 31, 2010,
is presented below. All 2010 transactions have been recorded exceptfor the
items described after the trial balance

Cash $28,000

Accounts Receivable 36,800

Notes Receivable 10,000

Interest Receivable -0-

Merchandise Inventory 36,200

Prepaid Insurance 3,600

Land 20,000

Building 150,000

Equipment 60,000

Patent 9,000

Allowance for Doubtful Accounts $500

Accumulated
Depreciation-Building 50,000

Accumulated
Depreciation-Equipment 24,000

Accounts Payable
27,300

Salaries Payable -0-

Unearned Rent 6,000

Notes Payable
(short-term) 11,000

Interest Payable -0-

Notes Payable (long-term) 35,000

Common Stock 50,000

Retained Earnings
63,600

Dividends 12,000

Sales 900,000

Interest Revenue -0-

Rent Revenue -0-

Gain on Disposal -0-

Bad Debts Expense -0-

Cost of Goods Sold 630,000

Depreciation Expense-Buildings -0-

Depreciation Expense-Equipment -0-

Insurance Expense -0-

Interest Expense -0-

Other Operating Expenses 61,800

Amortization Expense-Patents -0-

Salaries Expense 110,000

Total

$1,167,400

Unrecorded transactions

on May 1, 2010, Pinkerton purchased equipment for $16,000
plus sales taxes of $800 (all paid in cash).

On July 1, 2010,
Pinkerton sold for $3,500 equipment which originally cost $5,000.Accumulated
depreciation on this equipment at January 1, 2010, was $1,800;2010
depreciation prior to the sale of equipment was $450.

On December 31, 2010,
Pinkerton sold for $5,000 on account inventory that cost$3,500.

Pinkerton estimates
that uncollectible accounts receivable at year-end are$4,000.

The note receivable
is a one-year, 8% note dated April 1, 2010. No interest has beenrecorded.

The balance in
prepaid insurance represents payment of a $3,600, 6-month premiumon September
1, 2010.

The building is being
depreciated using the straight-line method over 30 years. Thesalvage value is
$30,000.

The equipment owned
prior to this year is being depreciated using the straight-linemethod over 5
years. The salvage value is 10% of cost.

The equipment
purchased on May 1, 2010, is being depreciated using thestraightline method
over 5 years, with a salvage value of $1,800.

The patent was
acquired on January 1, 2010, and has a useful life of 9 years fromthat date.

Unpaid salaries at
December 31, 2010, total $2,200.

The unearned rent of
$6,000 was received on December 1, 2010, for 3 months rent.

Both the short-term
and long-term notes payable are dated January 1, 2010, and carry a10% interest
rate. All interest is payable in the next 12 months.

Income tax expense
was $15,000. It was unpaid at December 31.

(a) prepare journal entries for the transactions listed above
(b) prepare an updated december 31, 2011 trial balance
(c) prepare a 2011 income statement and a 2011 retained earningsstatement
(d) prepare a december 31 2011 balance sheet
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ACCT 2001 Quiz: ACCT2001 Quiz 2017 Spring Class 01 Review

ACCT 2001 Full Course Notes

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