ACC 300 FINAL EXAM STUDY GUIDE
QUESTIONS AND ANSWERS ALL
CORRECT
The following table contains financial information for Tarleton Incorporated before
closing entries. What is the amount of total shareholders' equity?
a. $68,700
b. $5,200
c. $79,100
d. $84,300 - Answer- c. $79,100
Sanjeev enters into a contract offering variable consideration. The contract pays him
$2,200/month for six months of continuous consulting services. In addition, there is a
60% chance the contract will pay an additional $2,000 and a 40% chance the contract
will pay an additional $3,000, depending on the outcome of the consulting contract.
Sanjeev concludes that this contract qualifies for revenue recognition over time.
Assume Sanjeev estimates variable consideration as the most likely amount. What is
the amount of revenue Sanjeev would recognize for the first month of the contract?
a. $1,200
b. $2,200
c. $2,533
d. $3,080 - Answer- c. $2,533
On October 28, 2024, a company committed to a plan to sell a division that qualified as
a component of the entity according to GAAP regarding discontinued operations and
was properly classified as held for sale on December 31, 2024, the end of the
company's fiscal year. The division's loss from operations for 2024 was $1,890,000. The
division's book value and fair value less cost to sell on December 31 were $3,140,000
and $2,370,000, respectively. What before-tax amount(s) should the company report as
a loss on discontinued operations in its 2023 income statement?
a. $770,000
b. no loss
c. $2,660,000
d. $1,890,000 - Answer- c. $2,660,000
Fenland Company plans to retire $180 million in bonds in five years. To save for
retirement, the company plans to make annual deposits into an account at the
, beginning of each year during that period. The account is expected to earn 12% interest
compounded annually. At the end of the five years, there needs to be enough money in
the account to pay off the bonds. What amount does Fenland need to invest at the
beginning of each year?
a. $32,705,277
b. $25,297,954
c. cannot be determined
d. $26,560,527 - Answer- b. $25,297,954
Misty Company reported the following before-tax items during the current year. Misty's
effective tax rate is 25%. What is Misty's net income for the current year?
a. $355
b. $275
c. $285
d. $315 - Answer- c. $285
An accrued liability is created when:
a. cash is paid but an expense is never recorded
b. an expense is incurred but not yet paid
c. cash is paid before an expense is incurred
d. an expense is recorded at the same time as the cash payment - Answer- b. an
expense is incurred but not yet paid
Classification shifting by managers has the effects of increasing which level of
profitability?
a. operating income
b. all of the others
c. income before taxes
d. net income - Answer- a. operating income
Rothbart Manufacturing agrees to manufacture bumper cars for Banners Amusement
Parks. How much revenue should Rothbart recognize in 2024 for this contract?
a. $22,800
b. $0
c. $76,000
d. $53,700 - Answer- b. $0
Excerpts from Dowling Company's December 31, 2024 and 2023 financial statements
and key ratios are presented below. Dowling's average total assets for 2024 is closest
to:
a. $241
b. $121
c. $222
d. $38 - Answer- a. $241
QUESTIONS AND ANSWERS ALL
CORRECT
The following table contains financial information for Tarleton Incorporated before
closing entries. What is the amount of total shareholders' equity?
a. $68,700
b. $5,200
c. $79,100
d. $84,300 - Answer- c. $79,100
Sanjeev enters into a contract offering variable consideration. The contract pays him
$2,200/month for six months of continuous consulting services. In addition, there is a
60% chance the contract will pay an additional $2,000 and a 40% chance the contract
will pay an additional $3,000, depending on the outcome of the consulting contract.
Sanjeev concludes that this contract qualifies for revenue recognition over time.
Assume Sanjeev estimates variable consideration as the most likely amount. What is
the amount of revenue Sanjeev would recognize for the first month of the contract?
a. $1,200
b. $2,200
c. $2,533
d. $3,080 - Answer- c. $2,533
On October 28, 2024, a company committed to a plan to sell a division that qualified as
a component of the entity according to GAAP regarding discontinued operations and
was properly classified as held for sale on December 31, 2024, the end of the
company's fiscal year. The division's loss from operations for 2024 was $1,890,000. The
division's book value and fair value less cost to sell on December 31 were $3,140,000
and $2,370,000, respectively. What before-tax amount(s) should the company report as
a loss on discontinued operations in its 2023 income statement?
a. $770,000
b. no loss
c. $2,660,000
d. $1,890,000 - Answer- c. $2,660,000
Fenland Company plans to retire $180 million in bonds in five years. To save for
retirement, the company plans to make annual deposits into an account at the
, beginning of each year during that period. The account is expected to earn 12% interest
compounded annually. At the end of the five years, there needs to be enough money in
the account to pay off the bonds. What amount does Fenland need to invest at the
beginning of each year?
a. $32,705,277
b. $25,297,954
c. cannot be determined
d. $26,560,527 - Answer- b. $25,297,954
Misty Company reported the following before-tax items during the current year. Misty's
effective tax rate is 25%. What is Misty's net income for the current year?
a. $355
b. $275
c. $285
d. $315 - Answer- c. $285
An accrued liability is created when:
a. cash is paid but an expense is never recorded
b. an expense is incurred but not yet paid
c. cash is paid before an expense is incurred
d. an expense is recorded at the same time as the cash payment - Answer- b. an
expense is incurred but not yet paid
Classification shifting by managers has the effects of increasing which level of
profitability?
a. operating income
b. all of the others
c. income before taxes
d. net income - Answer- a. operating income
Rothbart Manufacturing agrees to manufacture bumper cars for Banners Amusement
Parks. How much revenue should Rothbart recognize in 2024 for this contract?
a. $22,800
b. $0
c. $76,000
d. $53,700 - Answer- b. $0
Excerpts from Dowling Company's December 31, 2024 and 2023 financial statements
and key ratios are presented below. Dowling's average total assets for 2024 is closest
to:
a. $241
b. $121
c. $222
d. $38 - Answer- a. $241
