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1、BUS 630FINAL EXAM(240 points)Please note that discussing the exam on the BB, by email, phone or other means are not allowed. The Exam has to be done on your own. Use the template to complete your exam.Please use Microsoft Word only and make sure that the answers are shown within the pages5 margins.
2、Clearly label your answers and submit the answers only (no need to resubmit the questions) showing all calculations. Good luck!Part I, Multiple Choice Questions (45 questions- 135 points)If a company purchases equipment for $65,000 by issuing a note payable:A. Total assets will increase by $65,000.B
3、. Total assets will decrease by $65,000.C. Total assets will remain the same.D. The company*s total owners equity will decrease.1. Which of the following is not a generally accepted accounting principle relating to the valuation of assets?A. The cost principle - in general, assets are valued at cost
4、, rather than at estimated market values.B. The objectivity principle - accountants prefer to use objective, rather than subjective, information as the basis for accounting information.C. The safety principle - assets are valued at no more than the value for which they are insured.D. The going-conce
5、rn assumption - one reason for valuing assets such as buildings and equipment at cost rather than at their current market values is the assumption that the business will use these assets rather than sell them.2. Decreases in owners* equity are caused by:A. Purchases of assets and payment of liabilit
6、ies.B. Purchases of assets and incurrence of liabilities.C. Payment of liabilities and unprofitable operations.D. Distributions of assets to the owner and unprofitable operations.3. A trial balance consists of:A. A two-column schedule of all debit and credit entries posted to ledger accounts.B. A tw
7、o-column financial statement intended for distribution to interested parties outside the business.C. A two-column schedule showing the totals of all debits and of all credits made in journal entries.D. A two-column schedule listing names and balances of all ledger accounts.40. The Fine Point Company
8、 currently produces all of the components for its one product; an electric pencil sharpener. The unit cost of manufacturing the motor for this pencil sharpener is:Direct materials$1.75Direct labor$1.65Variable overhead$0.75Fixed overheadS0.60The company is considering the possibility of buying this
9、motor from a subcontractor and has been quoted a price of $3.60 per unit. The relevant cost of manufacturing the motor to be considered in reaching the decision is:A. $4.75.B. $4.15.C. $3.55.D. $4.05.41. Seidman Company manufactures and sells 30,000 units of product X per month. Each unit of product
10、 X sells for $16 and has a contribution margin of $7. If product X is discontinued, $85,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Companys other products. If product X is discontinued, Seidman Companys monthly income before ta
11、xes should:A. Increase by $210,000.B. Increase by $125,000.C. Decrease by $210,000.D. Decrease by $125,000.42. Speedy Co. manufactures four products. Direct materials and direct labor are available in sufficient quantities, but machine capacity is limited to 3,000 hours. Cost and revenue data for th
12、e four products are given below:ProductProductProductProductABCDSelling price per unit$36$42$46Vanable cost per unit$19$16$25$37Units produced permachine hour3423Of the four products which is the most profitable for Speedy Co.?A. Product A.B. Product B.C. Product C.D. Product D.43. Wateredge Corpora
13、tion has budgeted a total of $361,800 in costs and expenses for the upcoming quarter. Of this amount, $45,000 represents depreciation expense and $7,300 represents the expiration of prepayments. Wateredges current payables balance is $265,000 at the beginning of the quarter. Budgeted payments on cur
14、rent payables for the quarter amount to $370,000. The companys estimated current payables balance at the end of the quarter is:A. $179,500.B. $204,500.C. $203,500.D. $310,000.44. On October 1 of the current year, Molloy Corporation prepared a cash budget for October, November, and December. All of M
15、olloy*s sales are made on account. The following information was used in preparing estimated cash collections:August sales (actual)$40,000September sales (actual)$50,000October sales (estimated)$20,000November sales (estimated)$70,000December sales (estimated)$60,000Approximately 60% of all sales are collected in the month of the sale, 30% is collected in the following month, and 10% is collected in the month thereafter.Refer to the information above. Budgeted collections from customers in October total:A. $39,000.B. $27,000.C. $31,000.D. $110,000.45. Skelton Corporation had planned to
