Company M sold 1.000 treasury shares at US $33 per share. The shares had originally been issued at US $12 per share and had been repurchased at US $27 per share. The par value is US $5 per share. In the entry to record the reissuance using the cost method, what account should be credited?

• A.Retained earnings of US $6,000
• B.Treasury shares of US $28,000
• C.Paid-in capital in excess of par of US $28,000.
• D.Share premium of US $6,000.

Correct Answer: D

Under the cost method, treasury shares are carried at cost. In this case, cost is US $27,0001,000 shares x $27). The journal entry to record a sale at US $33 per share is:

Comment: *

Name: *

Email: *

Verification: *

At the end of the reporting period 600,000 units had been packed and shipped. No inventory remained on hand. If the company used process costing, the cost per unit would be:

• A.US $0.197
• B.US $0.275
• C.US $0.315
• D.US $0.590

Correct Answer: D

Process costing is used to assign costs to products or services. It is relatively homogeneous items that are mass produced on a continuous basis. Process costing is the average cost per unit produced, or total cost divided by the number of units US $150,000 + $90,000 $15,000 + $3,000 + $66,000 = US $354,000 - 600,000 = US $0.59). Ramseur Company employs a process costing system for its two-department manufacturing operation using the first-in, first- out FIFO) inventory method. When units are completed in Department 1, they are transferred to Department 2 for completion. Inspection takes place in Department 2 immediately before the direct materials are added, when the process is 70% complete with respect to conversion. The specific identification method is used to account for lost units. The number of defective units that is, those failing inspection) is usually below the normal tolerance limit of 4% of units inspected. Defective units have minimal value, and the company sells them without any further processing for whatever it can. Generally, the amount collected equals, or slightly exceeds, the transportation cost. A summary of the manufacturing activity for Department 2, in units for the current month, is presented in the next column.

Comment: *

Name: *

Email: *

Verification: *

Which of the following statements Is true regarding the use of centralized authority to govern an organization?

• A.When authority is centralized, the alignment of activities to achieve business goals typically is decreased.
• B.Fraud committed through collusion is more likely when authority is centralized.
• C.Using separation of duties to mitigate collusion is reduced only when authority is centralized.
• D.Centralized managerial authority typically enhances certainty and consistency within an organization.

Comment: *

Name: *

Email: *

Verification: *

The primary reason for adopting TOM was to achieve:

• A.Greater customer satisfaction.
• B.Reduced delivery time.
• C.Reduced delivery charges.
• D.Greater employee participation.

Comment: *

Name: *

Email: *

Verification: *

On December 31, Year 1, XYZ led 5-year bonds with a face amount of US $1 million.
The bonds carry a stated interest rate of 10% and were sold at par. Interest is payable annually on December 31 According to the provisions of the bond denture, XYZ was to make annual deposits into a bond sinking fund (beginning December 31, Year 2) to accumulate the funds necessary to retire the bonds at their maturity. On December 31 Year 5, all required interest payments and sinking-fund payments due to date had been made on schedule. If the sinking-fund assets are properly classified as noncurrent. How should the balance of bonds payable be classified on the December 31 Year 5 balance sheet?

• A.Current liability
• B.Long-term liability.
• C.Contra to long-term investments.
• D.Deferred credit.

Comment: *

Name: *

Email: *

Verification: *