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Review: Accounting Crash Course Retake Exam
Certificate Awarded View Certificate
Question 1
Assume US GAAP to answer this question.
In 2017, $2 million in wages were earned and no cash wages were paid.
In 2018, $8 million in wages were earned and $9 million in cash wages were paid.
Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages earned in 2018.
Any earned but unpaid wages will be paid during the first quarter of 2019.
Using only the information provided, which of the following statements is most accurate?
Liabilities decreased by $1.0 million in 2018.
Liabilities increased by $6.0 million in 2018.
Assets decreased by $7.0 million in 2018.
Retained earnings decreased by $10.0 million in 2018.
Retained earnings decreased by $9.0 million in 2018.
Question 2
A company reported gross profit of $22 million in 2018. In addition, it recorded the following activities:
Sales and marketing expenses were $6 million.
Interest expense was $1 million.
Sold equipment for $13 million that had a net book value of $9 million.
$3 million in preferred stock issuance.
Company’s tax rate is 40%.
Calculate the company’s net income.
$9.0 million
$9.6 million
$11.4 million
$12.6 million
$15.0 million
Question 3
The next two questions use the following data from TGX Global, a heavy equipment manufacturer (this information will be repeated on the next question):
TGX Global sells excavators, with an average sale price of $750,000 per excavator.
TGX received new orders for 100 excavators in 2018.
TGX produced & delivered 130 excavators in 2018: 70 of these delivered excavators were ordered in 2017 and the rest (60 excavators) were part of the 100 ordered in 2018.
TGX received payment for 120 excavators.
TGX began selling 1-year maintenance services contracts for $60,000 per excavator in 2018, which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders made
in 2018 (no contracts were sold on orders placed in 2017)
Assume all excavators delivered in 2018 are delivered at year end.
Calculate TGX’s 2018 revenue based on the transactions described above.
$75.0 million
$78.0 million
$97.5 million
$100.5 million
$101.4 million
Question 4
This question uses the same TGX Global data as the previous question, repeated below:
TGX Global sells excavators, with an average sale price of $750,000 per excavator.
TGX received new orders for 100 excavators in 2018.
Support
TGX produced & delivered 130 excavators in 2018: 70 of these delivered excavators were ordered in 2017 and the rest (60 excavators) were part of the 100 ordered in 2018.
This study source was downloaded by 100000899606070 from CourseHero.com on 06-17-2025 01:24:47 GMT -05:00
https://www.coursehero.com/file/235987562/Completed-Exam-Wall-Street-Preppdf/
, TGX received payment for 120 excavators.
TGX began selling 1-year maintenance services contracts for $60,000 per excavator in 2018, which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders made
in 2018 (no contracts were sold on orders placed in 2017).
Assume now that instead of the revenue recognized in the previous question, TGX recognized $75 million in revenue for 100 excavators (and assume no maintenance contract revenue was recognized).
In addition, the following occurred in 2018:
TGX recognized $3 million in shipping and delivery costs for the materials it uses to produce excavators.
TGX recognized $7 million in direct labor expenses.
TGX recognized $3 million in commissions paid to its salespeople for selling the excavators.
TGX purchased $60 million in raw materials in 2018, of which $50 million was in cash.
Raw materials required to assemble each excavator cost $500,000 per excavator.
Calculate TGX’s 2018 gross profit based on the transactions described above.
$11.0 million
$14.0 million
$15.0 million
$18.0 million
$35.0 million
Question 5
Fairview Corporation recorded the following in 2018:
After-tax net income was $25 million in 2018.
The actual share count at the beginning of the year was 15.0 million.
Fairview repurchased 3 million shares at $12/share in the middle of 2018.
Fairview issued preferred dividends of $5 million and common dividends of $5 million.
Fairview issued 5 million stock options in 2018, 1 milllion of which vested and were exercised in the middle of 2018.
Calculate 2018 basic earnings per share (EPS).
1.07
1.29
1.43
1.67
1.79
Question 6
Dynamic Resources reported the following information for year ending June 30, 2016 (values in millions):
Plant, Property & Equipment, gross $5,000
Accumulated Depreciation 1,500
Plant, Property & Equipment, net 3,500
Salvage Value 300
The company also reported the following transactions on the first day of fiscal 2017:
Sale of asset with gross PP&E of $700 million for $500 million and useful life of 7 years and no salvage value. Recorded a gain on sale of $400 million.
Write off of asset with gross PP&E of $600 million. Asset was purchased 3 years ago with original useful life of 4 years and salvage value of $300 million.
Purchase of new equipment for $1,600 million with useful life of 8 years and no salvage value (purchased on the first day of fiscal 2017).
Assuming the remaining useful life of other equipment is 9 years on a straight-line basis, what is the net PP&E as of June 30, 2017 (rounded to nearest thousand)?
$4,013.9 million
$4,088.9 million
$4,355.6 million
$4,555.6 million
$4,725.0 million
Question 7
Information about the assets of TAP Holdings is provided below:
TAP purchased land on January 1, 2013 for $500 million. As of January 1, 2018, the fair value was estimated to be $550 million.
TAP purchased a trademark on January 1, 2016 for $300 million. As of January 1, 2018, the fair value was estimated to be $200 million.
TAP acquired a company on Jun 5, 2016 and recognized $1100 million in goodwill as a result. A $150 million goodwill impairment was recognized at year end 2017.
Assume a useful life of 5 years and the straight-line method for any depreciable or amortizable assets above.
Assume TAP reports under US GAAP.
What is the total value of these assets reported on TAP’s balance sheet as of January 1, 2018
$1,610
This study millionwas downloaded by 100000899606070 from CourseHero.com on 06-17-2025 01:24:47 GMT -05:00
source
https://www.coursehero.com/file/235987562/Completed-Exam-Wall-Street-Preppdf/
Review: Accounting Crash Course Retake Exam
Certificate Awarded View Certificate
Question 1
Assume US GAAP to answer this question.
In 2017, $2 million in wages were earned and no cash wages were paid.
In 2018, $8 million in wages were earned and $9 million in cash wages were paid.
Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages earned in 2018.
Any earned but unpaid wages will be paid during the first quarter of 2019.
Using only the information provided, which of the following statements is most accurate?
Liabilities decreased by $1.0 million in 2018.
Liabilities increased by $6.0 million in 2018.
Assets decreased by $7.0 million in 2018.
Retained earnings decreased by $10.0 million in 2018.
Retained earnings decreased by $9.0 million in 2018.
Question 2
A company reported gross profit of $22 million in 2018. In addition, it recorded the following activities:
Sales and marketing expenses were $6 million.
Interest expense was $1 million.
Sold equipment for $13 million that had a net book value of $9 million.
$3 million in preferred stock issuance.
Company’s tax rate is 40%.
Calculate the company’s net income.
$9.0 million
$9.6 million
$11.4 million
$12.6 million
$15.0 million
Question 3
The next two questions use the following data from TGX Global, a heavy equipment manufacturer (this information will be repeated on the next question):
TGX Global sells excavators, with an average sale price of $750,000 per excavator.
TGX received new orders for 100 excavators in 2018.
TGX produced & delivered 130 excavators in 2018: 70 of these delivered excavators were ordered in 2017 and the rest (60 excavators) were part of the 100 ordered in 2018.
TGX received payment for 120 excavators.
TGX began selling 1-year maintenance services contracts for $60,000 per excavator in 2018, which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders made
in 2018 (no contracts were sold on orders placed in 2017)
Assume all excavators delivered in 2018 are delivered at year end.
Calculate TGX’s 2018 revenue based on the transactions described above.
$75.0 million
$78.0 million
$97.5 million
$100.5 million
$101.4 million
Question 4
This question uses the same TGX Global data as the previous question, repeated below:
TGX Global sells excavators, with an average sale price of $750,000 per excavator.
TGX received new orders for 100 excavators in 2018.
Support
TGX produced & delivered 130 excavators in 2018: 70 of these delivered excavators were ordered in 2017 and the rest (60 excavators) were part of the 100 ordered in 2018.
This study source was downloaded by 100000899606070 from CourseHero.com on 06-17-2025 01:24:47 GMT -05:00
https://www.coursehero.com/file/235987562/Completed-Exam-Wall-Street-Preppdf/
, TGX received payment for 120 excavators.
TGX began selling 1-year maintenance services contracts for $60,000 per excavator in 2018, which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders made
in 2018 (no contracts were sold on orders placed in 2017).
Assume now that instead of the revenue recognized in the previous question, TGX recognized $75 million in revenue for 100 excavators (and assume no maintenance contract revenue was recognized).
In addition, the following occurred in 2018:
TGX recognized $3 million in shipping and delivery costs for the materials it uses to produce excavators.
TGX recognized $7 million in direct labor expenses.
TGX recognized $3 million in commissions paid to its salespeople for selling the excavators.
TGX purchased $60 million in raw materials in 2018, of which $50 million was in cash.
Raw materials required to assemble each excavator cost $500,000 per excavator.
Calculate TGX’s 2018 gross profit based on the transactions described above.
$11.0 million
$14.0 million
$15.0 million
$18.0 million
$35.0 million
Question 5
Fairview Corporation recorded the following in 2018:
After-tax net income was $25 million in 2018.
The actual share count at the beginning of the year was 15.0 million.
Fairview repurchased 3 million shares at $12/share in the middle of 2018.
Fairview issued preferred dividends of $5 million and common dividends of $5 million.
Fairview issued 5 million stock options in 2018, 1 milllion of which vested and were exercised in the middle of 2018.
Calculate 2018 basic earnings per share (EPS).
1.07
1.29
1.43
1.67
1.79
Question 6
Dynamic Resources reported the following information for year ending June 30, 2016 (values in millions):
Plant, Property & Equipment, gross $5,000
Accumulated Depreciation 1,500
Plant, Property & Equipment, net 3,500
Salvage Value 300
The company also reported the following transactions on the first day of fiscal 2017:
Sale of asset with gross PP&E of $700 million for $500 million and useful life of 7 years and no salvage value. Recorded a gain on sale of $400 million.
Write off of asset with gross PP&E of $600 million. Asset was purchased 3 years ago with original useful life of 4 years and salvage value of $300 million.
Purchase of new equipment for $1,600 million with useful life of 8 years and no salvage value (purchased on the first day of fiscal 2017).
Assuming the remaining useful life of other equipment is 9 years on a straight-line basis, what is the net PP&E as of June 30, 2017 (rounded to nearest thousand)?
$4,013.9 million
$4,088.9 million
$4,355.6 million
$4,555.6 million
$4,725.0 million
Question 7
Information about the assets of TAP Holdings is provided below:
TAP purchased land on January 1, 2013 for $500 million. As of January 1, 2018, the fair value was estimated to be $550 million.
TAP purchased a trademark on January 1, 2016 for $300 million. As of January 1, 2018, the fair value was estimated to be $200 million.
TAP acquired a company on Jun 5, 2016 and recognized $1100 million in goodwill as a result. A $150 million goodwill impairment was recognized at year end 2017.
Assume a useful life of 5 years and the straight-line method for any depreciable or amortizable assets above.
Assume TAP reports under US GAAP.
What is the total value of these assets reported on TAP’s balance sheet as of January 1, 2018
$1,610
This study millionwas downloaded by 100000899606070 from CourseHero.com on 06-17-2025 01:24:47 GMT -05:00
source
https://www.coursehero.com/file/235987562/Completed-Exam-Wall-Street-Preppdf/
