I will start whenever an expert is ready to help me. non MCQ's. Time limit is 2 hours and answers to each problem needs to be posted as soon as they get answered. Document Preview: Final...

Spring 2012 Final Exam ACC 3023
Dr. Sanders Page 1

______________________________________
Name
______________________________________
abc123 id
Final Examination
ACC 3023 Intermediate Accounting I
Spring 2012
Dr. Elaine Sanders
Problem Points Earned Points Possible
1 10
2 10
3 10
4 10
5 10
6 10
7 10
8 10
9 10
10 10
Total from exam 100
Course evaluation 2
Total before curve 102
Curve
Total recorded score
Spring 2012 Final Exam ACC 3023
Dr. Sanders Page 2

Problem 1. Chapter 4.
The accountant preparing the income statement for Bakersfield, Inc. had some doubts about the
appropriate accounting treatment of the seven items listed below during the fiscal year ending
December 31, 2012. Assume a tax rate of 40 percent.
Instructions:
For each item, explain the appropriate treatment and record the dollar-amount of
co
ections to income from continuing operations before taxes, if any. Denote any
numbers that increase income from continuing operations (+) and any numbers that
decrease income from continuing operations (-).
1. The corporation experienced an uninsured flood loss of $70,000 before taxes. While this
loss meets the criteria of an extraordinary item, it has not been recorded.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
It is an extra ordinary item – loss from flood (net of tax)
(-) $42,000
2. The corporation disposed of its sporting goods division during 2012. This disposal meets
the criteria for discontinued operations. The division co
ectly calculated income from
operating this division of $110,000 before taxes and a loss of $12,000 before taxes on
the disposal of the division. All of these events occu
ed in 2012 and have not been
ecorded.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
Income from operations of discontinued operations (net of Tax)
Loss from closure of discontinued operations (net of tax)
(+) $66,000
(-) $ 7,200
3. The company recorded advances of $10,000 to employees made December 31, 2012 as
Salaries and wages Expense.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
Less: Salaries advances wrongly recorded as salaries and
wages
(-) 10,000
Spring 2012 Final Exam ACC 3023
Dr. Sanders Page 3
4. Dividends of $10,000 during 2012 were recorded as an operating expense.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
Add: Dividends paid wrongly entered as operating expense
(+) $10,000
5. In 2012, Bakersfield changed its method of accounting for inventory from the first-in-first-
out method to the average cost method. Inventory in 2012 was co
ectly recorded using
the average cost method. The new inventory method would have resulted in an
additional $115,000 of cost of goods sold (before taxes) being reported on prior years'
income statement.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
Recast prior income statement
(-) $115,000
6. Office equipment purchased January 1, 2012 for $45,000 was inco
ectly charged to
Supplies Expense at the time of purchase. The office equipment has an estimated three-
year service life with no expected salvage value. Bakersfield uses the straight-line
method to depreciate office equipment for financial reporting purposes. This e
or has
not been recorded.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
Add: Equipment purchased wrongly recorded in Supplies
Less: Depreciation for the year on office equipment
(+) $45,000
(-) $15,000


Spring 2012 Final Exam ACC 3023
Dr. Sanders Page 4

7. On January 1, 2008, Bakersfield bought a building that cost $85,000, had an estimated
useful life of ten years, and had a salvage value of $5,000. Bakersfield uses the
straight-line depreciation method to depreciate the building. In 2012, it was estimated
that the remaining useful life was eight years and the salvage value was zero.
Depreciation expense reported on the 2012 income statement was co
ectly calculated
ased on the new estimates. No adjustment for prior years' depreciation estimates was
made.
Explanation Effect of Change on Income
from Continuing Operations
(+/-)
No adjustment is required for prior years
NIL


Spring 2012 Final Exam ACC 3023
Dr. Sanders Page 5

Problem 2. Chapter 5.
Selected financial statement information and additional data for Stanislaus Co. is presented
elow....