Financial Accounting > EXAM > University of Notre Dame ACCT GENERALLY Completed Exam | Wall Street Prep - Wall Street Prep (All)

University of Notre Dame ACCT GENERALLY Completed Exam | Wall Street Prep - Wall Street Prep

Document Content and Description Below

Review: Accounting Crash Course Retake Exam v4 Score: 92%, 24 correct out of 26 | Taken On: 06-19-20 Question 1 Assume US GAAP to answer this question. In 2017, $2 million in wages were earned an... d 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. Your answer is correct. Since wages were earned in 2017 but not yet paid, the opening balance sheet in 2018 would have an accrued wages liability of $2.0. These were paid in 2018, reversing the liability. However, since there is only $7.0 million in cash ($9.0 less the $2.0 million used to pay 2017 wages) available to pay wages earned in 2018, that leaves $1.0 million in earned wages unpaid, lowering the accrued wages liability to $1.0 million. The net impact to the liability is -$1.0 million (-$2.0 + $1 million). The only asset impacted is cash, which decreases by $9.0 million, while retained earnings decreases by $8.0 million, since wages are expensed when they are earned, not when they are paid. See Lesson: Payable, Accrued Expenses, Deferred Revenue & Debt 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 Your answer is correct. Gross profit 22.0 Selling and marketing expenses (6.0) Interest expense (1.0) Gain on sale 4.0 Pretax income 19.0 Tax rate 40% Net income 11.4 Gain on sale is calculated as the sale price less the net book value. See Lessons: Net Income, EPS & Dividends Property, Plant & Equipment, Part 2 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 i [Show More]

Last updated: 1 year ago

Preview 1 out of  pages

Add to cart

Instant download

We Accept:

We Accept
document-preview

Buy this document to get the full access instantly

Instant Download Access after purchase

Add to cart

Instant download

We Accept:

We Accept

Reviews( 0 )

$7.00

Add to cart

We Accept:

We Accept

Instant download

Can't find what you want? Try our AI powered Search

OR

REQUEST DOCUMENT
19
0

Document information


Connected school, study & course


About the document


Uploaded On

Jul 14, 2021

Number of pages

Written in

Seller


seller-icon
jimmydarts

Member since 3 years

80 Documents Sold


Additional information

This document has been written for:

Uploaded

Jul 14, 2021

Downloads

 0

Views

 19

Document Keyword Tags

Recommended For You

Get more on EXAM »
What is Browsegrades

In Browsegrades, a student can earn by offering help to other student. Students can help other students with materials by upploading their notes and earn money.

We are here to help

We're available through e-mail, Twitter, Facebook, and live chat.
 FAQ
 Questions? Leave a message!

Follow us on
 Twitter

Copyright © Browsegrades · High quality services·