·         1. (TCO A) Which of the following is an advantage of the sole proprietorship relative to the corporate form of business organization? (Points: 5)
Limited liability of investor.
Transferability of ownership.
Simple to establish.
Unlimited life.

2. (TCO A) Which of the following activities involves the issuance of common stock? (Points: 5)
Investing
Delivering
Operating
Financing 

3. (TCO A) Tucker Industries reported Net Income of $45,000 for 2010. Net Sales were $375,000. The average common shares outstanding were 10,000. No preferred dividends were paid. What was the 2010 Earnings per Share (EPS)? (Points: 5)
$4.50 
$0.13
$30.00
$5.25

4. (TCO C) Free cash flow can be utilized to (Points: 5)
retire stock or debt.
acquire new assets.
pay additional dividends.
All of the above are correct. 

5. (TCO C) The payment of cash dividends will (Points: 5)
Increase the operating section of the statement of cash flows.
Decrease the operating section of the statement of cash flows.
Increase the financing section of the statement of cash flows.
Decrease the financing section of the statement of cash flows. 

6. (TCO A, B) Landon Company showed the following balances at the end of its first year:
Cash $10,000
Prepaid insurance 700
Accounts receivable 3,500
Accounts payable 2,800
Notes payable 4,200
Common stock 1,400
Dividends 700
Revenues 21,000
Expenses 17,500
What did Landon Company show as total debits on its trial balance? (Points: 5)
$32,400 
$29,400
$34,500
$35,200

7. (TCO B, E) Under the accrual basis of accounting, which of the following statements is correct? (Points: 5)
Cash must be paid before expense is recognized.
Since the depreciation expense is a non-cash item, it is not shown in the Income Statement.
The Cash Basis is preferred by GAAP since the Cash Basis is simpler than the Accrual Basis.
Expenses should match with revenue and adjusting entries are needed to bring the accounts up to date. 

8. (TCO A, B) The KPMM Accounting firm purchased 10 laser toner cartridges for $60 each for a total of $600 on June 1 and recorded the purchase as an asset. On June 30, an inventory of the toner cartridges indicated only 2 on hand. The adjusting entry that should be made by the firm on June 30 is (Points: 5)
Debit Office Supplies Expense, $600; Credit Office Supplies, $600.
Debit Office Supplies Expense, $480; Credit Office Supplies, $480. 
Debit Office Supplies, $120; Credit Office Supplies Expense, $120.
Debit Office Supplies Expense, $120; Credit Office Supplies, $120.

9. (TCO E) A credit purchase of $2,000 is made on May 25, terms 2/10, net/30, on which a return of $250 is made on May 28. What amount is paid as payment in full on June 2? (Points: 5)
$2,000
$1,750
$1,715 
$1,700

10. (TCO B) At the beginning of the year, Eastside Auto had an inventory of $500,000. During the year, the company purchased goods costing $1,500,000. If Eastside Auto reported ending inventory of $400,000 and sales of $2,000,000, their cost of goods sold and gross profit rate must be (Points: 5)
$1,100,000 and 20%
$1,600,000 and 30%
$1,100,000 and 45%
$1,600,000 and 20% 

11. (TCO D) Partial financial statement information for 2009 and 2010 is shown below for Carnival Company. Calculate the inventory turnover ratio for 2010.
2010 2009
Sales $1,385,000 $1,599,000
Cost of Goods Sold 689,000 804,000
Ending Inventory 74,000 66,000
(Points: 5)
8.9 times
9.8 times 
17.9 times
19.8 times

12. (TCO D) Inventory turnover reflects on (Points: 5)
Low profit margin.
The efficiency of inventory management. 
High profit margin.
The relevance of available inventory.

13. (TCO D) The internal audit function can best be classified as an example of which control principle (Points: 5)
Establishment of responsibility.
Independent internal verification. 
Documentation procedures.
Separation of duties is violated.

14. (TCO D) Which of the following is not a documentation procedure over cash receipts? (Points: 5)
Conduct background checks. 
Use remittance advices.
Use deposit slips.
Use cash register tapes.

1. (TCO A, B, D) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $33,000 at the end of the year. If the balance of the Allowance for Doubtful Accounts is $12,000 debit before adjustment; what is the amount of bad debt expense

$33,000
$12,000
$45,000 
$21,000

1 – Step one: Design a start stop station; include a green ready light, a red run light, and also a fan for a motor. Then using set and reset coils design a fault that includes an alarm and an indicator light. Make the system to which the alarm can be silenced by another button or switch but the indicator light remains on.

– Step two: Redesign the circuit to where the stop button resets the fault, turning off both the alarm and the indicator light

2. –Step one: Make start and stop station. Needs a fan, ready light and run light.The motor can only be started once in a 20 second period but after the 20 seconds you will be able to start it again.

–Step two: Redesign the program to where if the motor is started more than two times within the 20second cycle it will lock out until you hit the reset, or the timer times out. (Motor will not start again until you hit the reset or the timer resets)

3. –Step one: Design a start/stop station that can be started and stopped. When the program is started it will sound an alarm immediately for 5 seconds. Then 1 minute after the alarm it will sound again for 5 seconds. Then 2 minutes after the alarm sounds it will sound again for 5 seconds. This will continue in this order until the stop button is pushed. Include a ready light that will be on when the trainer is turned on, and a run light that is on whenever the program running.

– Step two: Alarm 5 seconds then, 1 minute after the alarm it sounds again for 5 seconds. Then 2 minutes after that alarm it will sound again for 5 seconds. Then it starts over going 1 minute to 2 minutes.

4. – Step one: Design an engine shutdown program that can be started and stopped. This circuit must include a ready light, run light, motor, pre-lube, post-lube, and fault with fault light. When started it will pre-lube before the motor starts, when it is stopped it will post-lube until post-lube is timed out. The post lube turns on after the fault has occurred. Once the fault occurs it shuts the motor down and turns on the post-lube. The Fault will be indicated with a light. Once post-lube has stopped the fault lights should remain on. In order to restart the circuit you must reset the faults to clear them.

– Step two: Redesign the circuit to where it only shuts down after a second fault is tripped. A light indicates that the second fault as it does the first. Remember you must be able to reset all faults before restarting the circuit. the first fault must be engaged before you can trigger the second fault.

5. – Step one: Design a ladder logic circuit that will do the following:

1. Pre-lube (Q5) for 5 seconds.

1. Sound an alarm (Q7) for 5 seconds after the pre-lube.

1. Open suction valve (Q2) after alarm sounds.

1. Engage the starter (Q1) 2 seconds after you open suction valve.

1. Activate the ignition system (Q3) 2 seconds after the starter is engage.

1. Open the fuel valve (Q4) 2 seconds after the ignition is on.

1. Look for an rpm input to disengage the starter (I5).

1. Start the fan (Q6).

1. Can be started and stopped.

· Step two: Redesign the circuit a ladder logic circuit that will do the following while shutting down:

1. Close the fuel valve.

1. 2 seconds later deactivate the ignition system.

1. 1 second later stop the fan.

1. Post lube (Q5).

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