CPA BAR Practice Exam 5

Orion Manufacturing is analyzing its working capital efficiency. For the current year, Orion reported the following average balances and income statement amounts:<br/><br/>- Average Inventory: $800,000<br/>- Average Accounts Receivable: $600,000<br/>- Average Accounts Payable: $450,000<br/>- Net Sales: $7,300,000<br/>- Cost of Goods Sold: $4,380,000<br/>- Purchases: $4,500,000<br/><br/>Assume a 365-day year. What is Orion's Cash Conversion Cycle (CCC)?

Vanguard Corp. uses a standard costing system. For the month of June, the following data is available regarding direct labor:<br/><br/>- Standard Direct Labor Rate: $24 per hour<br/>- Actual Direct Labor Rate: $26 per hour<br/>- Standard Hours Allowed for Actual Production: 5,000 hours<br/>- Actual Hours Worked: 4,800 hours<br/><br/>What is the Direct Labor Rate Variance and the Direct Labor Efficiency Variance for June?

Titan Industries is evaluating a new project with the following projected cash flows:<br/>- Initial Investment: $2,000,000<br/>- Year 1 Cash Inflow: $800,000<br/>- Year 2 Cash Inflow: $900,000<br/>- Year 3 Cash Inflow: $1,000,000<br/><br/>The company's Weighted Average Cost of Capital (WACC) is 10%. The present value factors for 10% are: Year 1 (0.909), Year 2 (0.826), Year 3 (0.751). <br/><br/>Calculate the Net Present Value (NPV) and determine if the project should be accepted.

Under ASC 606, which of the following scenarios BEST describes a performance obligation that is satisfied over time?

Blue City's General Fund reported the following for the fiscal year:<br/>- Property taxes levied: $5,000,000<br/>- Collected during the year: $4,200,000<br/>- Collected within 60 days after year-end: $300,000<br/>- Collected between 61 and 90 days after year-end: $100,000<br/>- Estimated uncollectible: $50,000<br/><br/>Under the modified accrual basis of accounting, what amount of property tax revenue should be recognized?