Assetmc 1 PDF

Gleim's CPA Test Prep software for the Financial section of the CPA exam.
Total Questions: 100
QUESTION: 1 of 100 SOURCE: CPA May 94 F-12 STUDY UNIT: 03

The following information pertains to Grey Co. at December 31, 1995:
Checkbook balance $12,000
Bank statement balance 16,000
Check drawn on Grey's account, payable
to a vendor, dated and recorded
12/31/95 but not mailed until 1/10/96 1,800
On Grey's December 31, 1995 balance sheet, what amount should be reported as
cash?
A- $12,000
B- $13,800
C- $14,200
D- $16,000

At December 31, 1995, Kale Co. had the following balances in the accounts it
maintains at First State Bank:
Checking account #101 $175,000
Checking account #201 (10,000)
Money market account 25,000
90-day certificate of deposit due 2/28/96 50,000
180-day certificate of deposit due 3/15/96 80,000
Kale classifies investments with original maturities of three months or less
as cash equivalents. In its December 31, 1995 balance sheet, what amount
should Kale report as cash and cash equivalents?
A- $190,000
B- $200,000
C- $240,000
D- $320,000
QUESTION: 3 of 100 SOURCE: CPA Nov 88 I-1 STUDY UNIT: 03
Burr Company had the following account balances at December 31, 1995:
Cash in banks $2,250,000
Cash on hand 125,000
Cash legally restricted for additions
to plant (expected to be disbursed
in 1996) 1,600,000
Cash in banks includes $600,000 of compensating balances against short-term
borrowing arrangements. The compensating balances are not legally
restricted as to withdrawal by Burr. In the current assets section of
Burr's December 31, 1995 balance sheet, total cash should be reported at
A- $1,775,000
B- $2,250,000
C- $2,375,000
D- $3,975,000
On December 31, 1995, Ott Co. had investments in trading securities as
follows:
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Printed from Gleim's CPA Test Prep software (Copyright 1995). Page 1
Fair
Cost Value
------- -------
Man Co. $10,000 $ 8,000
Kemo, Inc. 9,000 11,000
Fenn Corp. 11,000 9,000
------- -------
$30,000 $28,000
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Ott's December 31, 1995 balance sheet should report the trading securities
as
A- $26,000
B- $28,000
C- $29,000
D- $30,000
Jay Company acquired a wholly-owned foreign subsidiary on January 1, 1995.
The shareholders' equity section of the December 31, 1995 consolidated
balance sheet follows:
Common stock $ 500,000
Additional paid-in capital 200,000
Retained earnings 900,000
----------
$1,600,000
Minus: Contra accounts 600,000
----------
Total shareholders' equity $1,000,000
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The contra account balance appropriately represents adjustments in
translating the foreign subsidiary's financial statements into U.S. dollars.
The consolidated income statement for 1995 included the excess of cost of
investments in certain debt and equity securities over their fair values,
which is considered temporary, as follows:
Available-for-sale securities $200,000
Trading securities $100,000
The correct amounts for retained earnings and the contra accounts in the
consolidated statement of shareholders' equity for the year ended December
31, 1995 are
Retained Earnings Contra Accounts
----------------- ---------------
A- $ 900,000 $600,000
B- $1,000,000 $700,000
C- $1,100,000 $800,000
D- $1,200,000 $900,000
Jent Corp. purchased bonds at a discount of $10,000. Subsequently, Jent
sold these bonds at a premium of $14,000. During the period that Jent held
this investment, amortization of the discount amounted to $2,000. What
amount should Jent report as gain on the sale of bonds?
A- $12,000
B- $22,000
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C- $24,000
D- $26,000
Pare, Inc. purchased 10% of Tot Co.'s 100,000 outstanding shares of common
stock on January 2, 1995 for $50,000. On December 31, 1995, Pare purchased
an additional 20,000 shares of Tot for $150,000. There was no goodwill as a
result of either acquisition, and Tot had not issued any additional stock
during 1995. Tot reported earnings of $300,000 for 1995 What amount should
Pare report in its December 31, 1995 balance sheet as investment in Tot?
A- $170,000
B- $200,000
C- $230,000
D- $290,000
QUESTION: 8 of 100 SOURCE: CPA Nov 93 T-9 STUDY UNIT: 03
Peel Co. received a cash dividend from a common stock investment. Should
Peel report an increase in the investment account if it uses the cost method
or the equity method of accounting?
Cost Equity
---- ------
A- No No
B- Yes Yes
C- Yes No
D- No Yes
An issuer of bonds uses a sinking fund for the retirement of the bonds.
Cash was transferred to the sinking fund and subsequently used to purchase
investments. The sinking fund
I. Increases by revenue earned on the investments
II. Is not affected by revenue earned on the investments
III. Decreases when the investments are purchased
A- I only.
B- I and III.
C- II and III.
D- III only.
QUESTION: 10 of 100 SOURCE: CPA May 93 I-16 STUDY UNIT: 03
The following information relates to noncurrent investments that Fall Corp.
placed in trust as required by the underwriter of its bonds:
Bond sinking-fund balance, 12/31/94 $ 450,000
1995 additional investment 90,000
Dividends on investments 15,000
Interest revenue 30,000
Administration costs 5,000
Carrying amount of bonds payable 1,025,000
What amount should Fall report in its December 31, 1995 balance sheet
related to its noncurrent investment for bond sinking-fund requirements?
A- $585,000
B- $580,000
C- $575,000
D- $540,000
On January 15, 1994, Carr Corp. adopted a plan to accumulate funds for
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environmental improvements beginning July 1, 1998 at an estimated cost of

$2,000,000. Carr plans to make four equal annual deposits in a fund that
will earn interest at 10% compounded annually. The first deposit was made
on July 1, 1994. Future value factors are as follows:
Future value of 1 at 10% for five periods 1.61
Future value of ordinary annuity of 1
at 10% for four periods 4.64
Future value of annuity in advance of 1
at 10% for four periods 5.11
Carr should make four annual deposits (rounded) of
A- $320,000
B- $391,400
C- $431,000
D- $500,000
QUESTION: 12 of 100 SOURCE: CPA Nov 94 F-46 STUDY UNIT: 03
An increase in the cash surrender value of a life insurance policy owned by
a company would be recorded by
A- Decreasing annual insurance expense.
B- Increasing investment income.
C- Recording a memorandum entry only.
D- Decreasing a deferred charge.

On January 2, 1992, Beal, Inc. acquired a $70,000 whole-life insurance
policy on its president. The annual premium is $2,000. The company is the
owner and beneficiary. Beal charged officer's life insurance expense as
follows:
1992 $2,000
1993 1,800
1994 1,500
1995 1,100
----- ------
Total $6,400
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In Beal's December 31, 1995 balance sheet, the investment in cash surrender
value should be
A- $0
B- $1,600
C- $6,400
D- $8,000
In preparing its August 31, 1990 bank reconciliation, Apex Corp. has
available the following information:
Balance per bank statement, 8/31/90 $18,050
Deposit in transit, 8/31/90 3,250
Return of customer's check for
insufficient funds, 8/31/90 600
Outstanding checks, 8/31/90 2,750
Bank service charges for August 100
At August 31, 1990, Apex's correct cash balance is
A- $18,550
B- $17,950
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C- $17,850
D- $17,550
QUESTION: 15 of 100 SOURCE: CPA May 93 T-22 STUDY UNIT: 03
When the fair value of an investment in debt securities exceeds its carrying
amount, how should each of the following assets be reported at the end of
the year?
Held-to-Maturity Available-for-Sale
Securities Securities
---------------- ------------------
A- Fair value Carrying amount
B- Carrying amount Fair value
C- Carrying amount Carrying amount
D- Fair value Fair value
On December 29, 1995, BJ Co. sold an equity security, not accounted for
under the equity method, that had been purchased on January 4, 1994. BJ
owned no other security. An unrealized loss was reported in the 1994 income
statement. A realized gain was reported in the 1995 income statement. Was
the security classified as an available-for-sale security and did its 1994
fair value decline exceed its 1995 fair value recovery?
1994 Fair Value
Decline Exceeded 1995
Available-for-Sale Fair Value Recovery
------------------ ---------------------
A- Yes Yes
B- Yes No
C- No Yes
D- No Indeterminate
At December 31, 1994, Hull Corp. had the following equity securities that
were purchased during 1994, its first year of operations:
Fair Unrealized
Cost Value gain (loss)
-------- -------- ----------
In Current
Assets:
Security A $ 90,000 $60,000 $(30,000)
Security B 15,000 20,000 5,000
-------- -------- --------
Totals $105,000 $80,000 $(25,000)
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In Noncurrent
Assets:
Security Y $ 70,000 $ 80,000 $ 10,000
Security Z 90,000 45,000 (45,000)
-------- -------- --------
Totals $160,000 $125,000 $(35,000)
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All changes in fair value are considered temporary. Security A is a trading
security, and the other securities are available-for-sale securities. What
amounts should be charged to income and shareholders' equity at December 31,
1994?
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Shareholders'
Income Equity
------- -------------
A- $60,000 $0
B- $30,000 $30,000
C- $25,000 $30,000
D- $25,000 $0
Reed, Inc. began operations on January 1, 1994. The following information
pertains to Reed's December 31, 1994 securities:
Available-
Trading for-Sale
-------- ---------
Cost $360,000 $550,000
Fair value 320,000 450,000
Lower of cost or fair value
applied to each security 304,000 420,000
If the declines are judged to be temporary, what amounts should Reed report
for its trading and available-for-sale securities in the assets section of
its December 31, 1994 balance sheet?
Trading Available-for-Sale
-------- ------------------
A- $360,000 $550,000
B- $360,000 $450,000
C- $320,000 $450,000
D- $304,000 $420,000
This questions is based on Information Block number 1 on page 26.
What amount should Sun report as net unrealized loss on available-for-sale
securities in its 1995 statement of shareholders' equity?
A- $40,000
B- $45,000
C- $85,000
D- $160,000
On January 1, 1990, Ball, Inc. purchased a $1,000,000 ordinary life
insurance policy on its president. The policy year and Ball's accounting
year coincide. Additional data are available for the year ended December
31, 1995:
Cash surrender value, 1/1/95 $43,500
Cash surrender value, 12/31/95 54,000
Annual advance premium paid 1/1/95 20,000
Dividend received 7/1/95 3,000
Ball, Inc. is the beneficiary under the life insurance policy. How much
should Ball report as life insurance expense for 1995?
A- $6,500
B- $9,500
C- $17,000
D- $20,000
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In Grant's December 31, 1993, balance sheet, what should be the carrying
amount of this investment?
A- $200,000
B- $209,000
C- $224,000
D- $230,000

Upon the death of an officer, Jung Co. received the proceeds of a life
insurance policy held by Jung on the officer. The proceeds were not
taxable. The policy's cash surrender value had been recorded on Jung's
books at the time of payment. What amount of revenue should Jung report in
its statements?
A- Proceeds received.
B- Proceeds received less cash surrender value.
C- Proceeds received plus cash surrender value.
D- None.
On Merf's April 30, 1995 balance sheet, a note receivable was reported as a
noncurrent asset, and its accrued interest for 8 months was reported as a
current asset. Which of the following terms would fit Merf's note
receivable?
A- Both principal and interest amounts are payable on August 31, 1995 and
August 31, 1996.
B- Principal and interest are due December 31, 1995.
C- Both principal and interest amounts are payable on December 31, 1995 and
December 31, 1996.
D- Principal is due August 31, 1996, and interest is due August 31, 1995 and
August 31, 1996.
The following information relates to Jay Co.'s accounts receivable for 1995:
Accounts receivable, 1/1/95 $ 650,000
Credit sales for 1995 2,700,000
Sales returns for 1995 75,000
Accounts written off during 1995 40,000
Collections from customers during 1995 2,150,000
Estimated future sales returns at 12/31/95 50,000
Estimated uncollectible accounts at 12/31/95 110,000
What amount should Jay report for accounts receivable, before allowances for
sales returns and uncollectible accounts, at December 31, 1995?
A- $1,200,000
B- $1,125,000
C- $1,085,000
D- $925,000
When the allowance method of recognizing uncollectible accounts is used, the
entry to record the write-off of a specific account
A- Decreases both accounts receivable and the allowance for uncollectible
accounts.
B- Decreases accounts receivable and increases the allowance for
uncollectible accounts.
C- Increases the allowance for uncollectible accounts and decreases net
income.
D- Decreases both accounts receivable and net income.
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Inge Co. determined that the net value of its accounts receivable at
December 31, 1995, based on an aging of the receivables, was $325,000.
Additional information is as follows:
Allowance for uncollectible
accounts -- 1/1/95 $ 30,000
Uncollectible accounts written
off during 1995 18,000
Uncollectible accounts recovered
during 1995 2,000
Accounts receivable at 12/31/95 350,000
For 1995, what would be Inge's uncollectible accounts expense?
A- $5,000
B- $11,000
C- $15,000
D- $21,000
QUESTION: 27 of 100 SOURCE: PUBLISHER STUDY UNIT: 04
Under the gross method and the net method, net sales in the March income
statement should appear as which of the following amounts?
Gross Method Net Method
------------ ----------
A- $48,500 $48,500
B- $48,500 $49,400
C- $49,400 $48,500
D- $49,400 $49,400
When a transfer of receivables with recourse qualifies for recognition as a
sale, the difference between the sales price (adjusted for the accrual for
probable adjustments) and the net receivables should be recognized as which
of the following?
A- A liability.
B- Gain or loss on the sale of receivables.
C- Gain or loss on the straight-line basis as the receivables are collected.
D- Gain or loss in accordance with the interest method as the receivables
are collected.
In Emme's 1995 income statement, what amount should be reported as interest
income?
A- $15,000
B- $45,000
C- $48,000
D- $60,000
In Emme's 1995 income statement, what amount should be reported as gain
(loss) on sale of machinery?
A- $(30,000)
B- $30,000
C- $120,000
D- $150,000
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After being held for 30 days, a 90-day, 15% interest-bearing note receivable
was discounted at a bank at 18%. The proceeds received from the bank upon
discounting would be the
A- Maturity value minus the discount at 18%.
B- Maturity value plus the discount at 18%.
C- Face value minus the discount at 18%.
D- Face value plus the discount at 18%.
Roth, Inc. received from a customer a 1-year, $500,000 note bearing annual
interest of 8%. After holding the note for 6 months, Roth discounted the
note at Regional Bank at an effective interest rate of 10%. What amount of
cash did Roth receive from the bank?
A- $540,000
B- $528,400
C- $513,000
D- $486,000
QUESTION: 33 of 100 SOURCE: CPA Nov 90 II-1 STUDY UNIT: 04
On July 1, 1994, Kay Corp. sold equipment to Mando Co. for $100,000. Kay
accepted a 10% note receivable for the entire sales price. This note is
payable in two equal installments of $50,000 plus accrued interest on
December 31, 1994 and December 31, 1995. On July 1, 1995, Kay discounted
the note at a bank at an interest rate of 12%. Kay's proceeds from the
discounted note were
A- $48,400
B- $52,640
C- $52,250
D- $51,700
A note receivable bearing a reasonable interest rate is sold to a bank with
recourse. At the date of the discounting transaction, the notes receivable
discounted account may be
A- Decreased by the proceeds from the discounting transaction.
B- Increased by the proceeds from the discounting transaction.
C- Increased by the face amount of the note.
D- Decreased by the face amount of the note.
A note receivable bearing a reasonable interest rate was discounted at a
bank with recourse in a transaction that qualifies as a sale. The notes
receivable discounted account was appropriately credited. The notes
receivable discounted account should be reported as a
A- Contra-asset account for the proceeds from the discounting transaction.
B- Contra-asset account for the face amount of the note.
C- Liability account for the proceeds from the discounting transaction.
D- Liability account for the face amount of the note.
Mr. and Mrs. Dart own a majority of the outstanding capital stock of Wall
Corp., Black Co., and West, Inc. During 1995, Wall advanced cash to Black
and West in the amount of $50,000 and $80,000, respectively. West advanced
$70,000 in cash to Black. At December 31, 1995, none of the advances was
repaid. In the combined December 31, 1995 balance sheet of these companies,
what amount would be reported as receivables from affiliates?
A- $200,000
B- $130,000
C- $60,000
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D- $0
Lia Co.'s December 31, 1994 balance sheet reported the following current
assets:
Cash $ 35,000
Accounts receivable 60,000
Inventories 30,000
--------
Total $125,000
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An analysis of the accounts disclosed that accounts receivable included the
following:
Trade accounts $48,000
Allowance for uncollectible accounts (1,000)
Selling price of Lia's unsold goods sent
to Jax Co. on consignment at 130% of
cost and not included in Lia's ending
inventory 13,000
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Total $60,000
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At December 31, 1994, the correct total of Lia's current assets is

A- $112,000
B- $115,000
C- $122,000
D- $135,000
The following information pertains to Oro Corp.:
Credit sales for the year ended December 31, 1994 $450,000
Credit balance in allowance for uncollectible accounts
at January 1, 1994 10,800
Bad debts written off during 1994 18,000
According to past experience, 3% of Oro's credit sales have been
uncollectible. After provision is made for bad debt expense for the year
ended December 31, 1994, the allowance for uncollectible accounts balance
would be
A- $6,300
B- $13,500
C- $24,300
D- $31,500

The following accounts were abstracted from Roxy Co.'s unadjusted trial
balance at December 31, 1994:
Debit Credit
---------- ----------
Accounts receivable $1,000,000
Allowance for uncollectible accounts 8,000
Net credit sales $3,000,000
Roxy estimates that 3% of the gross accounts receivable will become
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uncollectible. After adjustment at December 31, 1994, the allowance for
uncollectible accounts should have a credit balance of
A- $90,000
B- $82,000
C- $38,000
D- $30,000
On July 1, 1994, a company obtained a 2-year 8% note receivable for services
rendered. At that time, the market rate of interest was 10%. The face
amount of the note and the entire amount of the interest are due on June 30,
1996. Interest receivable at December 31, 1994, was
A- 5% of the face value of the note.
B- 4% of the face value of the note.
C- 5% of the July 1, 1994 present value of the amount due June 30, 1996.
D- 4% of the July 1, 1994 present value of the amount due June 30, 1996.
Platt Co. has been forced into bankruptcy and liquidated. Unsecured claims
will be paid at the rate of $.50 on the dollar. Maga Co. holds a
noninterest-bearing note receivable from Platt in the amount of $50,000,
collateralized by machinery with a liquidation value of $10,000. The total
amount to be realized by Maga on this note receivable is
A- $35,000
B- $30,000
C- $25,000
D- $10,000
Which method of recording uncollectible accounts expense is consistent with
accrual accounting?
Allowance Direct Write-Off
--------- ----------------
A- Yes Yes
B- Yes No
C- No Yes
D- No No
In a periodic inventory system that uses the weighted-average cost flow
method, the beginning inventory is the
A- Net purchases minus the ending inventory.
B- Net purchases minus the cost of goods sold.
C- Total goods available for sale minus the net purchases.
D- Total goods available for sale minus the cost of goods sold.
Herc Co.'s inventory at December 31, 1995 was $1,500,000 based on a physical
count priced at cost and before any necessary adjustment for the following:
ù Merchandise costing $90,000, shipped FOB shipping point from a
vendor on December 30, 1995, was received and recorded on January
5, 1996.
ù Goods in the shipping area were excluded from inventory although
shipment was not made until January 4, 1996. The goods, billed
to the customer FOB shipping point on December 30, 1995, had a cost
of $120,000.
What amount should Herc report as inventory in its December 31, 1995 balance
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sheet?
A- $1,500,000
B- $1,590,000
C- $1,620,000
D- $1,710,000
Southgate Co. paid the in-transit insurance premium for consignment goods
shipped to Hendon Co., the consignee. In addition, Southgate advanced part
of the commissions that will be due when Hendon sells the goods. Should
Southgate include the in-transit insurance premium and the advanced
commissions in inventory costs?
Insurance Advanced
Premium Commissions
--------- -----------
A- Yes Yes
B- No No
C- Yes No
D- No Yes
On December 1, 1995, Alt Department Store received 505 sweaters on
consignment from Todd. Todd's cost for the sweaters was $80 each, and they
were priced to sell at $100. Alt's commission on consigned goods is 10%.
At December 31, 1995, 5 sweaters remained. In its December 31, 1995 balance
sheet, what amount should Alt report as payable for consigned goods?
A- $49,000
B- $45,400
C- $45,000
D- $40,400
Under the LIFO method, what amount should Metro report as inventory at
January 31, 1994?
A- $3,225
B- $1,300
C- $2,700
D- $3,900
In 1994, Cobb adopted the dollar-value LIFO inventory method. At that time,
Cobb's ending inventory had a base-year cost and an end-of-year cost of
$300,000. In 1995, the ending inventory had a $400,000 base-year cost and a
$440,000 end-of-year cost. What dollar-value LIFO inventory cost would be
reported in Cobb's December 31, 1995 balance sheet?
A- $440,000
B- $430,000
C- $410,000
D- $400,000
On January 1, 1994, Poe Company adopted the dollar-value LIFO inventory
method. Poe's entire inventory constitutes a single pool. Inventory data
for 1994 and 1995 are as follows:
Inventory Inventory Relevant
at Current- at Base- Price
Date Year Cost Year Cost Index
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-------- ----------- --------- --------

01/01/94 $150,000 $150,000 1.00
12/31/94 220,000 200,000 1.10
12/31/95 276,000 230,000 1.20
Poe's LIFO inventory value at December 31, 1995 is
A- $230,000
B- $241,000
C- $246,000
D- $276,000
Which of the following statements are correct when a company applying the
lower-of-cost-or-market method reports its inventory at replacement cost?
I. The original cost is less than replacement cost.
II. The net realizable value is equal to or greater than
replacement cost.
A- I only.
B- II only.
C- Both I and II.
D- Neither I nor II.
Based on a physical inventory taken on December 31, 1995, Chewy Co.
determined its chocolate inventory on a FIFO basis at $26,000 with a
replacement cost of $20,000. Chewy estimated that, after further processing
costs of $12,000, the chocolate could be sold as finished candy bars for
$40,000. Chewy's normal profit margin is 10% of sales. Under the lower-of-
cost-or-market rule, what amount should Chewy report as chocolate inventory
in its December 31, 1995 balance sheet?
A- $28,000
B- $26,000
C- $24,000
D- $20,000
The lower-of-cost-or-market rule for inventories may be applied to total
inventory, to groups of similar items, or to each item. Which application
usually results in the lowest inventory amount?
A- All applications result in the same amount.
B- Total inventory.
C- Groups of similar items.
D- Separately to each item.
Which of the following methods of inventory valuation is allowable at
interim dates but not at year-end?
A- Weighted average.
B- Estimated gross profit.
C- Retail method.
D- Specific identification.
The following information is available for the Silver Company for the 3
months ended March 31 of this year:
Merchandise inventory,
January 1 of this year $ 900,000
Purchases 3,400,000
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Freight-in 200,000
Sales 4,800,000
The gross margin recorded was 25% of sales. What should be the merchandise
inventory at March 31?
A- $700,000
B- $900,000
C- $1,125,000
D- $1,200,000
At December 31, 1995, the following information was available from Huff
Co.'s accounting records:
Cost Retail
-------- ----------
Inventory, 1/1/95 $147,000 $ 203,000
Purchases 833,000 1,155,000
Additional markups - 42,000
-------- ----------
Available for sale $980,000 $1,400,000
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Sales for the year totaled $1,106,000. Markdowns amounted to $14,000.
Under the approximate lower-of-average-cost-or-market retail method, Huff's
inventory at December 31, 1995 was
A- $280,000
B- $197,160
C- $196,000
D- $194,854
QUESTION: 56 of 100 SOURCE: CMA Jun 85 3-26 STUDY UNIT: 05
Net losses on firm purchase commitments for goods for inventory result from
a contract price that exceeds the current market price. If a firm expects
that losses will occur when the purchase is effected, expected losses, if
material,
A- Should be recognized in the accounts and separately disclosed as losses
on the income statement of the period during which the decline in price
takes place.
B- Should be recognized in the accounts and separately disclosed as net
unrealized losses on the balance sheet at the end of the period during
which the decline in price takes place.
C- Should be recognized in the accounts and separately disclosed as net
unrealized losses on the balance sheet at the end of the period during
which the contract is executed.
D- Should not be recognized in the accounts until the contract is executed
and need not be separately disclosed in the financial statements.
Zuber Corp. produced 1,000 units of Product X. It now sells these units for
cash to Lewis Corp. and, in a related transaction, agrees to buy back the
1,000 units at a specified price at a future date. The price specified in
the agreement is not subject to change based on future market fluctuations
except for fluctuations resulting from finance and holding costs incurred by
Lewis. In accounting for this situation, Zuber should
A- Record the sale in an ordinary manner and remove the inventory from the
balance sheet.
B- Record the sale, remove the inventory from the balance sheet, and
disclose the purchase commitment in the notes to the financial
statements.
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C- Continue to carry the inventory on the books and record a valuation

account to be reported as a reduction to the inventory account on the
balance sheet, rather than record a sale.
D- Record a liability and continue to carry the inventory on the books
rather than record a sale.
The following items were included in Opal Co.'s inventory account at
December 31, 1992:
Merchandise out on consignment, at
sales price, including 40% markup
on selling price $40,000
Goods purchased, in transit, shipped
FOB shipping point 36,000
Goods held on consignment by Opal 27,000
By what amount should Opal's inventory account at December 31, 1992 be
reduced?
A- $103,000
B- $67,000
C- $51,000
D- $43,000
Ward Distribution Company has determined its December 31, 1994 inventory on
a FIFO basis at $200,000. Information pertaining to that inventory follows:
Estimated selling price $204,000
Estimated cost of disposal 10,000
Normal profit margin 30,000
Current replacement cost 180,000
Ward records losses that result from applying the lower of cost or market
rule. At December 31, 1994, the loss that Ward should recognize is
A- $0
B- $6,000
C- $14,000
D- $20,000
A company decided to change its inventory valuation method from FIFO to LIFO
in a period of rising prices. What was the result of the change on ending
inventory and net income in the year of the change?
Ending Inventory Net Income
---------------- ----------
A- Increase Increase
B- Increase Decrease
C- Decrease Decrease
D- Decrease Increase
Land was purchased to be used as the site for the construction of a plant.
A building on the property was sold and removed by the buyer so that
construction on the plant could begin. The proceeds from the sale of the
building should be
A- Classified as other income.
B- Deducted from the cost of the land.
C- Netted against the costs to clear the land and expensed as incurred.
-------------------------------------------------------------------------
D- Netted against the costs to clear the land and amortized over the life of
the plant.
During 1995, Burr Co. had the following transactions pertaining to its new
office building:
Purchase price of land $ 60,000
Legal fees for contracts to purchase land 2,000
Architects' fees 8,000
Demolition of the old building on site 5,000
Sale of scrap from old building 3,000
Construction cost of new building
(fully completed) 350,000
In Burr's December 31, 1995, balance sheet, what amounts should be reported
as the cost of land and cost of building?
Land Building
------- --------
A- $60,000 $360,000
B- $62,000 $360,000
C- $64,000 $358,000
D- $65,000 $362,000
Merry Co. purchased a machine costing $125,000 for its manufacturing
operations and paid shipping costs of $20,000. Merry spent an additional
$10,000 testing and preparing the machine for use. What amount should Merry
record as the cost of the machine?
A- $155,000
B- $145,000
C- $135,000
D- $125,000
A lessee incurred costs to construct office space in a leased warehouse.
The estimated useful life of the office is 10 years. The remaining term of
the nonrenewable lease is 15 years. The costs should be
A- Capitalized as leasehold improvements and amortized over 15 years.
B- Capitalized as leasehold improvements and amortized over 10 years.
C- Capitalized as leasehold improvements and expensed in the year in which
the lease expires.
D- Expensed as incurred.
Cole Co. began constructing a building for its own use in January 1995.
During 1995, Cole incurred interest of $50,000 on specific construction
debt, and $20,000 on other borrowings. Interest computed on the weighted-
average amount of accumulated expenditures for the building during 1995 was
$40,000. What amount of interest cost should Cole capitalize?
A- $20,000
B- $40,000
C- $50,000
D- $70,000
On June 18, 1995, Dell Printing Co. incurred the following costs for one of
its printing presses:
-------------------------------------------------------------------------
Purchase of collating and

stapling attachment $84,000
Installation of attachment 36,000
Replacement parts for overhaul of press 26,000
Labor and overhead in connection with
overhaul 14,000
The overhaul resulted in a significant increase in production. Neither the

attachment nor the overhaul increased the estimated useful life of the
press. What amount of the above costs should be capitalized?
A- $0
B- $84,000
C- $120,000
D- $160,000
Vik Auto and King Clothier exchanged goods, held for resale, with equal fair
values. Each will use the other's goods to promote its own products. The
retail price of the car that Vik gave up is less than the retail price of
the clothes received. What gain should Vik recognize on the nonmonetary
exchange?
A- A gain is not recognized.
B- A gain equal to the difference between the retail prices of the clothes
received and the car.
C- A gain equal to the difference between the retail price and the cost of
the car.
D- A gain equal to the difference between the fair value and the cost of the
car.
QUESTION: 68 of 100 SOURCE: CPA May 93 II-9 STUDY UNIT: 06
Beam Co. paid $1,000 cash and traded inventory, which had a carrying amount
of $20,000 and a fair value of $21,000, for other inventory in the same line
of business with a fair value of $22,000. What amount of gain (loss) should
Beam record related to the inventory exchange?
A- $2,000
B- $1,000
C- $0
D- $(1,000)
On January 1, 1991, Crater, Inc. purchased equipment having an estimated
salvage value equal to 20% of its original cost at the end of a 10-year
life. The equipment was sold December 31, 1995 for 50% of its original
cost. If the equipment's disposition resulted in a reported loss, which of
the following depreciation methods did Crater use?
A- Double-declining balance.
B- Sum-of-the-years'-digits.
C- Straight-line.
D- Composite.
Turtle Co. purchased equipment on January 2, 1993 for $50,000. The
equipment had an estimated 5-year service life. Turtle's policy for 5-year
assets is to use the 200% double-declining-balance depreciation method for
the first 2 years of the asset's life, and then switch to the straight-line
depreciation method. In its December 31, 1995 balance sheet, what amount
should Turtle report as accumulated depreciation for equipment?
A- $30,000
B- $38,000
C- $39,200
-------------------------------------------------------------------------
D- $42,000
In which of the following situations is the units-of-production method of
depreciation most appropriate?
A- An asset's service potential declines with use.
B- An asset's service potential declines with the passage of time.
C- An asset is subject to rapid obsolescence.
D- An asset incurs increasing repairs and maintenance with use.
A depreciable asset has an estimated 15% salvage value. At the end of its
estimated useful life, the accumulated depreciation will equal the original
cost of the asset under which of the following depreciation methods?
Straight-Line Productive-Output
------------- -----------------
A- Yes No
B- Yes Yes
C- No Yes
D- No No
A company using the composite depreciation method for its fleet of trucks,
cars, and campers retired one of its trucks and received cash from a salvage
company. The net carrying amount of these composite asset accounts was
decreased by the
A- Cash proceeds received and original cost of the truck.
B- Cash proceeds received.
C- Original cost of the truck minus the cash proceeds.
D- Original cost of the truck.
In January 1993, Huff Mining Corporation purchased a mineral mine for
$3,600,000 with removable ore estimated by geological surveys at 2,160,000
tons. The property has an estimated value of $360,000 after the ore has
been extracted. Huff incurred $1,080,000 of development costs preparing the
property for the extraction of ore. During 1995, 270,000 tons were removed
and 240,000 tons were sold. For the year ended December 31, 1995, Huff
should include what amount of depletion in its cost of goods sold?
A- $360,000
B- $405,000
C- $480,000
D- $540,000
QUESTION: 75 of 100 SOURCE: CMA Dec 86 4-11 STUDY UNIT: 06
WD Mining Company purchased a section of land for $600,000 in 1979 to
develop a zinc mine. The mine began operations in 1987. At that time,
management estimated that the mine would produce 200,000 tons of quality
ore. A total of 100,000 tons of ore were mined and processed from 1987
through December 31, 1994. During January 1995, a very promising vein was
discovered. The revised estimate of ore still to be mined was 250,000 tons.
Estimated salvage value for the mine land was $100,000 in both 1987 and
1995. Assuming that 10,000 tons of ore were mined in 1995, the computation
WD Mining Company should use to determine the amount of depletion to record
in 1995 would be
A- $600,000 - $100,000
------------------- X 10,000 tons
450,000 tons
-------------------------------------------------------------------------
B- $600,000 - $100,000
------------------- X 10,000 tons
350,000 Tons
C- ($600,000 - $100,000) - $250,000
-------------------------------- X 10,000 tons
350,000 tons
D- ($600,000 - $100,000) - $250,000
-------------------------------- X 10,000 tons
250,000 tons
On January 2, 1995, Ashe Company entered into a 10-year, noncancelable lease
requiring year-end payments of $100,000. Ashe's incremental borrowing rate
is 12%, while the lessor's implicit interest rate, known to Ashe, is 10%.
Present value factors for an ordinary annuity for 10 periods are 6.145 at
10%, and 5.650 at 12%. Ownership of the property remains with the lessor at
expiration of the lease. There is no bargain purchase option. The leased
property has an estimated economic life of 12 years. What amount should
Ashe capitalize for this leased property on January 2, 1995?
A- $1,000,000
B- $614,500
C- $565,000
D- $0
On January 1, 1989, Bay Co. acquired a land lease for a 21-year period with
no option to renew. The lease required Bay to construct a building in lieu
of rent. The building, completed on January 1, 1990 at a cost of $840,000,
will be depreciated using the straight-line method. At the end of the
lease, the building's estimated fair value will be $420,000. What is the
building's carrying amount in Bay's December 31, 1990 balance sheet?
A- $798,000
B- $800,000
C- $819,000
D- $820,000
On January 2, 1994, Ral Co. leased land and a building from an unrelated
lessor for a 10-year term. The lease has a renewal option for an additional
10 years, but Ral has not reached a decision with regard to the renewal
option. In early January of 1994, Ral completed the following improvements
to the property:
Estimated
Description Life Cost
------------ --------- -------
Sales office 10 years $47,000
Warehouse 25 years 75,000
Parking lot 15 years 18,000
Amortization of leasehold improvements for 1995 should be
A- $7,000
B- $8,900
C- $12,200
D- $14,000
On December 31, 1994, a building owned by Pine Corp. was totally destroyed
by fire. The building had fire insurance coverage up to $500,000. Other
pertinent information as of December 31, 1994 follows:
-------------------------------------------------------------------------
Building, carrying amount $520,000

Building, fair value 550,000
Removal and clean-up cost 10,000
During January 1995, before the 1994 financial statements were issued, Pine
received insurance proceeds of $500,000. On what amount should Pine base
the determination of its loss on involuntary conversion?
A- $520,000
B- $530,000
C- $550,000
D- $560,000
Dahl Co. traded a delivery van and $5,000 cash for a newer van owned by West
Corp. The following information relates to the values of the vans on the
exchange date:
Carrying Value Fair Value
-------------- ----------
Old van $30,000 $45,000
New van 40,000 50,000
Dahl's income tax rate is 30%. What amounts should Dahl report as gain on
exchange of the vans?
A- $15,000
B- $1,000
C- $700
D- $0
Yola Co. and Zaro Co. are fuel oil distributors. To facilitate the delivery
of oil to their customers, Yola and Zaro exchanged ownership of 1,200
barrels of oil without physically moving the oil. Yola paid Zaro $30,000 to
compensate for a difference in the grade of oil. On the date of the
exchange, cost and market values of the oil were as follows:
Yola Co. Zaro Co.
-------- --------
Cost $100,000 $126,000
Market values 120,000 150,000
In Zaro's income statement, what amount of gain should be reported from the
exchange of the oil?
A- $0
B- $4,800
C- $24,000
D- $30,000

Flex Company owns a machine that was bought on January 2, 1992 for $94,000.
The machine was estimated to have a useful life of 5 years and a salvage
value of $6,000. Flex uses the sum-of-the-years'-digits method of
depreciation. At the beginning of 1995, Flex determined that the useful
life of the machine should have been 4 years and the salvage value $8,800.
For the year 1995, Flex should record depreciation expense on this machine
of
A- $11,100
B- $14,800
C- $17,600
-------------------------------------------------------------------------
D- $21,300
In January 1994, Vorst Co. purchased a mineral mine for $2,640,000 with
removable ore estimated at 1,200,000 tons. After it has extracted all the
ore, Vorst will be required by law to restore the land to its original
condition at an estimated cost of $180,000. Vorst believes it will be able
to sell the property afterwards for $300,000. During 1994, Vorst incurred
$360,000 of development costs preparing the mine for production and removed
and sold 60,000 tons of ore. In its 1994 income statement, what amount
should Vorst report as depletion?
A- $135,000
B- $144,000
C- $150,000
D- $159,000
Rye Co. purchased a machine with a four-year estimated useful life and an
estimated 10% salvage value for $80,000 on January 1, 1992. In its income
statement, what would Rye report as the depreciation expense for 1994 using
the double-declining-balance (DDB) method?
A- $9,000
B- $10,000
C- $18,000
D- $20,000
On June 30, 1995, Finn, Inc. exchanged 2,000 shares of Edlow Corp. $30 par
value common stock for a patent owned by Bisk Co. The Edlow stock was
acquired in 1993 at a cost of $50,000. At the exchange date, Edlow common
stock had a fair value of $40 per share, and the patent had a net carrying
amount of $100,000 on Bisk's books. Finn should record the patent at
A- $50,000
B- $60,000
C- $80,000
D- $100,000
On January 1, 1992, Taft Co. purchased a patent for $714,000. The patent is
being amortized over its remaining legal life of 15 years expiring on
January 1, 2007. During 1995, Taft determined that the economic benefits of
the patent would not last longer than 10 years from the date of acquisition.
What amount should be reported in the balance sheet for the patent, net of
accumulated amortization, at December 31, 1995?
A- $428,400
B- $489,600
C- $514,080
D- $523,600
During 1995, Lyle Co. incurred $204,000 of research and development costs in
its laboratory to develop a patent that was granted on July 1, 1995. Legal
fees and other costs associated with registration of the patent totaled
$41,000. The estimated economic life of the patent is 10 years. What
amount should Lyle capitalize for the patent on July 1, 1995?
A- $0
B- $41,000
C- $204,000
D- $245,000
-------------------------------------------------------------------------

Jud Co. bought a trademark from Krug Corp. on January 1, 1995 for $224,000.
Jud retained an independent consultant who estimated the trademark's
remaining useful life to be 50 years. Its unamortized cost on Krug's
accounting records was $112,000. Jud decided to amortize the trademark over
the maximum period allowed. In Jud's December 31, 1995 balance sheet, what
amount should be reported as accumulated amortization?
A- $5,600
B- $4,480
C- $2,800
D- $2,240
An analysis of Thrift Corp.'s unadjusted prepaid expense account at December
31, 1995 revealed the following:
ù An opening balance at $1,500 for Thrift's comprehensive insurance
policy. Thrift had paid an annual premium of $3,000 on July 1, 1994.
ù A $3,200 annual insurance premium payment made July 1, 1995.
ù A $2,000 advance rental payment for a warehouse Thrift leased for
1 year beginning January 1, 1996.
In its December 31, 1995 balance sheet, what amount should Thrift report as
prepaid expenses?
A- $5,200
B- $3,600
C- $2,000
D- $1,600
ABC Co. was organized on July 15, 1993, and earned no significant revenues
until the first quarter of 1996. During the period 1993-1995, ABC acquired
plant and equipment, raised capital, obtained financing, trained employees,
and developed markets. In its financial statements as of December 31, 1995,
ABC should defer all costs incurred during 1993-1995,
A- Net of revenues earned, that are recoverable in future periods.
B- Net of revenues earned.
C- That are recoverable in future periods.
D- Without regard to net revenues earned or recoverability in future
periods.
During 1995, Pitt Corp. incurred costs to develop and produce a routine,
low-risk computer software product, as follows:
Completion of detail program design $13,000
Costs incurred for coding and testing to
establish technological feasibility 10,000
Other coding costs after establishment
of technological feasibility 24,000
Other testing costs after establishment
of technological feasibility 20,000
Costs of producing product masters for
training materials 15,000
Duplication of computer software and
training materials from product masters
(1,000 units) 25,000
Packaging product (500 units) 9,000
In Pitt's December 31, 1995 balance sheet, what amount should be reported in
-------------------------------------------------------------------------
inventory?
A- $25,000
B- $34,000
C- $40,000
D- $49,000
Lex Corp. was a development stage enterprise from October 10, 1993
(inception) through December 31, 1994. The year ended December 31, 1995 was
the first year in which Lex qualified as an established operating
enterprise. The following are among the costs incurred by Lex:
For the
Period For the
10/10/93- Year Ended
12/31/94 12/31/95
---------- -----------
Leasehold improvements,
equipment, and furniture $1,000,000 $ 300,000
Security deposits 60,000 30,000
Research and development 750,000 900,000
Laboratory operations 175,000 550,000
General and administrative 225,000 685,000
Depreciation 25,000 115,000
---------- ----------
$2,235,000 $2,580,000
ÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍ
From its inception through the period ended December 31, 1995, what is the
total amount of costs incurred by Lex that should be charged to operations?
A- $3,425,000
B- $2,250,000
C- $1,775,000
D- $1,350,000
A statement of cash flows for a development stage enterprise
A- Is the same as that of an established operating enterprise and, in
addition, shows cumulative amounts from the enterprise's inception.
B- Shows only cumulative amounts from the enterprise's inception.
C- Is the same as that of an established operating enterprise, but does not
show cumulative amounts from the enterprise's inception.
D- Is not presented.
Which of the following costs associated with an internally developed patent
should be capitalized?
Research and Patent
Development Registration
------------ ------------
A- No Yes
B- No No
C- Yes No
D- Yes Yes
When a broadcaster enters into a license agreement for program material, the
broadcaster should report
A- An asset and a liability for the rights acquired and obligations incurred
-------------------------------------------------------------------------
when the agreement is reached.

B- An asset and a liability when the cost of each program is known or
determinable, the program material has been accepted, and the program is
available for viewing or telecast.
C- The related assets and liability as current if the license period expires
within 1 year and as noncurrent if the license period expires in more
than 1 year.
D- An asset and a liability but only for the present value of future
payments in accordance with the procedures set forth in APB 21.
On January 1, 1995, Neal Co. issued 100,000 shares of its $10 par value
common stock in exchange for all of Frey Inc.'s outstanding stock. This
business combination was accounted for as a pooling of interests. The fair
value of Neal's common stock on December 31, 1994 was $19 per share. The
carrying amounts and fair values of Frey's assets and liabilities on
December 31, 1994 were as follows:
Carrying
Amount Fair Value
----------- ----------
Cash $ 240,000 $ 240,000
Receivables 270,000 270,000
Inventory 435,000 405,000
Property, plant and
equipment 1,305,000 1,440,000
Liabilities (525,000) (525,000)
---------- ----------
Net assets $1,725,000 $1,830,000
ÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍ
What is the amount of goodwill resulting from the business combination?
A- $175,000
B- $105,000
C- $70,000
D- $0
On July 1, 1990, Roxy Co. obtained fire insurance for a 3-year period at an
annual premium of $72,000 payable on July 1 of each year. The first premium
payment was made July 1, 1990. On October 1, 1990, Roxy paid $24,000 for
real estate taxes to cover the period ending September 30, 1991. The
prepayment was made to obtain a discount. In its December 31, 1990 balance
sheet, Roxy should report prepaid expenses of
A- $60,000
B- $54,000
C- $48,000
D- $36,000
Wall Company bought a trademark from Black Corporation on January 1, 1995
for $112,000. An independent consultant retained by Wall estimated that the
remaining useful life is 50 years. Its unamortized cost on Black's
accounting records was $56,000. Wall decided to write off the trademark
over the maximum period allowed. How much should be amortized for the year
ended December 31, 1995?
A- $1,120
B- $1,400
C- $2,240
D- $2,800
-------------------------------------------------------------------------

A purchased patent has a remaining legal life of 15 years. It should be
A- Expensed in the year of acquisition.
B- Amortized over 15 years regardless of its useful life.
C- Amortized over its useful life if less than 15 years.
D- Amortized over 40 years.
Gray Co. was granted a patent on January 2, 1991, and appropriately
capitalized $45,000 of related costs. Gray was amortizing the patent over
its estimated useful life of fifteen years. During 1994, Gray paid $15,000
in legal costs in successfully defending an attempted infringement of the
patent. After the legal action was completed, Gray sold the patent to the
plaintiff for $75,000. Gray's policy is to take no amortization in the year
of disposal. In its 1994 income statement, what amount should Gray report
as gain from sale of patent?
A- $15,000
B- $24,000
C- $27,000
D- $39,000
-------------------------------------------------------------------------
Information Block number 1

Sun Corp. had investments in trading securities costing $650,000. On June
30, 1995, Sun decided to hold the investments indefinitely and accordingly
reclassified them as available-for-sale on that date. The investments'
fair value was $575,000 at December 31, 1994, $530,000 at June 30, 1995,
and $490,000 at December 31, 1995.
Grant, Inc. acquired 30% of South Co.'s voting stock for $200,000 on
January 2, 1993. Grant's 30% interest in South gave Grant the ability to
exercise significant influence over South's operating and financial
policies. During 1993, South earned $80,000 and paid dividends of
$50,000. South reported earnings of $100,000 for the six months ended
June 30, 1994, and $200,000 for the year ended December 31, 1994. On July
1, 1994, Grant sold half of its stock in South for $150,000 cash. South
paid dividends of $60,000 on October 1, 1994.
EGC Company recorded two sales on March 1 of $20,000 and $30,000 under
credit terms of 3/10, n/30. Payment for the $20,000 sale was received
March 10. Payment for the $30,000 sale was received on March 25.
On January 2, 1995, Emme Co. sold equipment with a carrying amount of
$480,000 in exchange for a $600,000 noninterest-bearing note due January
2, 1998. There was no established exchange price for the equipment. The
prevailing rate of interest for a note of this type at January 2, 1995 was
10%. The present value of 1 at 10% for three periods is 0.75.
During January 1994, Metro Co., which maintains a perpetual inventory
system, recorded the following information pertaining to its inventory:
Units
Unit Total On
Units Cost Cost Hand
----- ---- ------ -----
Balance on 1/1/94 1,000 $1 $1,000 1,000
Purchased on 1/7/94 600 3 1,800 1,600
Sold on 1/20/94 900 700
Purchased on 1/25/94 400 5 2,000 1,100
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A N S W E R S H E E T
Gleim's CPA Test Prep software for the Financial section of the CPA exam.
Total Questions: 100
Question Correct
Number Answer Source Section
=========================================================================
1 B CPA May 94 F-12 Cash and Investments
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2 C CPA May 94 F-13 Cash and Investments
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3 C CPA Nov 88 I-1 Cash and Investments
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4 B CPA Nov 91 I-8 Cash and Investments
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6 B CPA May 94 F-43 Cash and Investments
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8 A CPA Nov 93 T-9 Cash and Investments
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9 A CPA Nov 91 T-36 Cash and Investments
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10 B CPA May 93 I-16 Cash and Investments
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12 A CPA Nov 94 F-46 Cash and Investments
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14 A CPA Nov 90 I-1 Cash and Investments
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15 B CPA May 93 T-22 Cash and Investments
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16 D CPA Nov 90 T-6 Cash and Investments
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18 C CPA May 92 I-13 Cash and Investments
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19 A CPA May 93 I-4 Cash and Investments
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20 A CPA May 86 I-47 Cash and Investments
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21 B CPA Nov 95 F-27 Cash and Investments
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22 B CPA Nov 95 F-35 Cash and Investments
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23 D CPA May 93 T-24 Receivables and Accruals
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24 C CPA May 93 I-12 Receivables and Accruals
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25 A CPA Nov 94 F-12 Receivables and Accruals
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26 B CPA Nov 94 F-45 Receivables and Accruals
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27 C PUBLISHER Receivables and Accruals

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28 B PUBLISHER Receivables and Accruals
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29 B CPA Nov 93 I-46 Receivables and Accruals
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30 A CPA Nov 93 I-47 Receivables and Accruals
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31 A CPA Nov 92 T-4 Receivables and Accruals
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32 C CPA Nov 93 I-15 Receivables and Accruals
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33 D CPA Nov 90 II-1 Receivables and Accruals
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34 C CPA May 89 T-3 Receivables and Accruals
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35 B CPA May 88 T-7 Receivables and Accruals
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36 D CPA Nov 91 I-10 Receivables and Accruals
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37 C CPA Nov 89 II-5 Receivables and Accruals
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38 A CPA Nov 89 II-7 Receivables and Accruals
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39 D CPA May 90 I-9 Receivables and Accruals
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40 B CPA Nov 89 T-6 Receivables and Accruals
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41 B CPA Nov 85 II-17 Receivables and Accruals
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42 B CPA May 95 F-35 Receivables and Accruals
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43 C CPA Nov 88 T-26 Inventories
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44 D CPA Nov 94 F-13 Inventories
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45 C CPA May 92 T-23 Inventories
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46 C CPA May 93 I-29 Inventories
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48 C CPA Nov 91 I-13 Inventories
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49 B CPA May 88 I-22 Inventories
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50 B CPA Nov 94 F-14 Inventories
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51 C CPA Nov 93 I-21 Inventories
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52 D CPA Nov 93 T-4 Inventories
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53 B CPA May 79 T-3 Inventories
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54 B CPA Nov 80 II-11 Inventories
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56 A CMA Jun 85 3-26 Inventories
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57 D PUBLISHER Inventories
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58 D CPA May 93 I-20 Inventories
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59 D CPA May 88 I-21 Inventories
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60 C CPA Nov 95 F-9 Inventories
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61 B CPA May 92 T-12 Property, Plant, and Equipment
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62 C CPA May 91 I-24 Property, Plant, and Equipment
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63 A CPA Nov 93 I-22 Property, Plant, and Equipment
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65 B CPA May 94 F-17 Property, Plant, and Equipment
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66 D CPA May 90 I-16 Property, Plant, and Equipment
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67 D CPA Nov 92 T-24 Property, Plant, and Equipment
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68 C CPA May 93 II-9 Property, Plant, and Equipment
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69 C CPA May 93 T-27 Property, Plant, and Equipment
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71 A CPA Nov 93 T-34 Property, Plant, and Equipment
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72 D CPA May 89 T-4 Property, Plant, and Equipment
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74 C CPA Nov 85 I-40 Property, Plant, and Equipment
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75 D CMA Dec 86 4-11 Property, Plant, and Equipment
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76 B CPA May 89 I-23 Property, Plant, and Equipment
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77 A CPA Nov 91 I-16 Property, Plant, and Equipment
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78 D CPA Nov 90 II-2 Property, Plant, and Equipment
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79 B CPA May 90 I-19 Property, Plant, and Equipment
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80 D CPA Nov 92 I-46 Property, Plant, and Equipment
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81 B CPA May 92 II-11 Property, Plant, and Equipment
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82 B CPA May 81 II-24 Property, Plant, and Equipment
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85 C CPA May 90 II-58 Intangibles and Other Assets
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86 B CPA May 90 I-20 Intangibles and Other Assets
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88 A CPA Nov 93 I-25 Intangibles and Other Assets
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90 C CPA May 90 T-39 Intangibles and Other Assets
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92 A CPA Nov 90 I-58 Intangibles and Other Assets
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93 A CPA Nov 92 T-44 Intangibles and Other Assets
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94 A CPA Nov 89 T-11 Intangibles and Other Assets
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95 B PUBLISHER Intangibles and Other Assets
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96 D CPA Nov 91 I-20 Intangibles and Other Assets
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98 D CPA Nov 87 I-10 Intangibles and Other Assets
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99 C CPA Nov 83 T-12 Intangibles and Other Assets
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100 B CPA Nov 95 F-33 Intangibles and Other Assets
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Printed from Gleim's CPA Test Prep software (Copyright 1995).
CPA exam questions are copyright (c) by the AICPA and are reproduced/adapted
with permission. Page 30

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Gleim's CPA Test Prep software for the Financial section of the CPA exam.

Total Questions: 100

QUESTION: 1 of 100 SOURCE: CPA May 94 F-12 STUDY UNIT: 03

QUESTION: 2 of 100 SOURCE: CPA May 94 F-13 STUDY UNIT: 03

environmental improvements beginning July 1, 1998 at an estimated cost of

QUESTION: 13 of 100 SOURCE: CPA Nov 90 I-3 STUDY UNIT: 03

QUESTION: 22 of 100 SOURCE: CPA Nov 95 F-35 STUDY UNIT: 03

QUESTION: 26 of 100 SOURCE: CPA Nov 94 F-45 STUDY UNIT: 04

QUESTION: 31 of 100 SOURCE: CPA Nov 92 T-4 STUDY UNIT: 04

At December 31, 1994, the correct total of Lia's current assets is

QUESTION: 39 of 100 SOURCE: CPA May 90 I-9 STUDY UNIT: 04

-------- ----------- --------- --------

C- Continue to carry the inventory on the books and record a valuation

Purchase of collating and

The overhaul resulted in a significant increase in production. Neither the

Building, carrying amount $520,000

QUESTION: 82 of 100 SOURCE: CPA May 81 II-24 STUDY UNIT: 06

QUESTION: 88 of 100 SOURCE: CPA Nov 93 I-25 STUDY UNIT: 07

when the agreement is reached.

QUESTION: 99 of 100 SOURCE: CPA Nov 83 T-12 STUDY UNIT: 07

Information Block number 1

27 C PUBLISHER Receivables and Accruals

87 B CPA May 93 I-23 Intangibles and Other Assets

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