Category: Uncategorized

Bartling Energy Systems recently reported $9,250,000

Question
	Bartling Energy Systems recently reported $9,250,000 of sales, $5,750,000 of operating costs other than depreciation, and $700,000 of depreciation. The company has $3,200,000 of outstanding bonds that carry a 5% interest rate, and its federal?plus?state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250,000 of capital expenditures on new fixed assets and to invest $300,000 in net operating working capital. By how much did the firm's net income exceed its free cash flow?	

In 2010, ABC company purchased machine for $300,000 that

Question
	In 2010, ABC company purchased machine for $300,000 that had a useful life of 5 years, with a salvage value of $50,000 at the end its life. Depreciation was calculated over 2 years on straight-line basis. In 20X2, it determined that the total life should be 10 years with the salvage value of $5,000 at the end its life. Prepare the entry to correct the depreciation for 20X1. Prepare the entry to record the depreciation for 20X2.	

Dr. Fine And Dr. Feelgood Are The Only Two Medical

Question
	
Dr. Fine and Dr. Feelgood are the only two medical doctors offering immediate walk-in medical services in the town of Springfield. That is, they operate in a duopoly. Each doctor can charge either a high price or a low price for a standard medical visit. The accompanying matrix shows their payoffs, in profits per patient (in dollars), for any choice that the two doctors can make.
Suppose the two doctors play a one-shot game—that is, they interact only once and never again. What will be the Nash (non-cooperative) equilibrium in this one-shot game?

Now suppose the two doctors play this game twice. Also, suppose each doctor can play one of two strategies: it can play either “always charge the low price” or “tit for tat”— that is, it starts off charging the high price in the first period, and then in the second period it does whatever the other doctor did in the previous period. Write down the payoffs to Dr. Fine from the following four possibilities:
Dr. Fine plays “always charge the low price” when Dr. Feelgood also plays “always charge the low price.”
FIRST Period
Payoffs
SECOND Period
Payoffs
TOTAL Payoffs
Charges
(high or low)
Charges
(high or low)
Fine
<
/td>
Fine
Feelgood
Feelgood
Dr. Fine plays “always charge the low price” when Dr. Feelgood plays “tit for tat.”
FIRST Period
Payoffs
SECOND Period
Payoffs
TOTAL Payoffs
Charges
(high or low)
Charges
(high or low)
Fine
Fine
Feelgood
Feelgood
Dr. Fine plays “tit for tat” when Dr. Feelgood plays “always charge the low price.”
FIRST Period
Payoffs
SECOND Period
Payoffs
TOTAL Payoffs
Charges
(high or low)
Charges
(high or low)
Fine
Fine
Feelgood
Feelgood
Dr. Fine plays “tit for tat” when Dr. Feelgood also plays “tit for tat.”
FIRST Period
Payoffs
SECOND Period
Payoffs
TOTAL Payoffs
Charges
(high or low)
Charges
(high or low)
Fine
Fine
Feelgood
Feelgood
“In the long run, there is no difference between monopolistic competition and perfect competition.”
Discusswhether this statement is true, false or ambiguous with respect to each of the criteria listed under a, b, c, and d. Justify your answers.
a.The price charged to consumers
b.The average total cost of production
c.The efficiency of the market outcome
d.The typical firm’s profit in the long run
---------------------
References:
Microeconomics: Unit 8 Assignment: Game Theory and Perfect Competition and monopolistic competition in the Long run
Content(15 points)
Points Possible
Points Earned
Game TheoryCorrectly calculated the non-cooperative Nash equilibrium for one-shot game.
3
Two-shot game with two strategies: “always charge the low price” or “tit for tat”.
Findpayoffs to Dr. Fine when:
· Dr. Fine plays “always charge the low price” when Dr. Feelgood also plays “always charge the low price.” (a)
· Dr. Fine plays “always charge the low price” when Dr. Feelgood plays “tit for tat.”
· Dr. Fine plays “tit for tat” when Dr. Feelgood plays “always charge the low price.”
· Dr. Fine plays “tit for tat” when Dr. Feelgood also plays “tit for tat.”
4
Considering the following statement: “In the long run, there is no difference between monopolistic competition and perfect competition.” discussed whether the following would be determined to be true, false, or ambiguous (justify your answers):
· The price charged to consumers
· The average total cost of production
· The efficiency of the market outcome
· The typical firm’s profit in the long run
8



















	

general business data bank

Question

1.
On a partner's personal statement of financial
condition, how should liabilities be valued? 

I. Present
value

II.
Lower of present value or cash
settlement amount 



A.
I 



B.
II 



C.
Both I and II 



D.
Neither I nor II 



2.
On a partner's personal statement of financial
condition, assets and liabilities are presented: 

I.
As current and noncurrent. 

II.
In order of liquidity and
maturity. 



A.
I 



B.
II 



C.
Both I and II 



D.
Neither I nor II 



3.
The personal financial statements of a partner
include which of the following? 

I.
Statement of financial condition. 

II.
Statement of changes in net worth.


III.
Statement of cash flows. 

A.
I and II 



B.
I and III 



C.
II and III 



D.
I, II, and III 



4.
On a partner's personal statement of financial
condition, how are assets valued? 

A.
Historical cost 



B.
Book value 



C.
Discounted value 

D.
Estimated current value 



5.
On a partner's personal statement of changes in
net worth, what type(s) of income is (are) recognized? 

I.
Realized 

II.
Unrealized 



A.
I only 



B.
II only 



C.
Both I and II 



D.
Neither I nor II 



6.
When is a partnership considered to be insolvent? 

I.
When the total of all partners'
capital accounts results in a debit balance. 



II.
When at least one of the partners
is personally insolvent. 

A.
I only 



B.
II only 



C.
Both I and II 



D.
Neither I nor II 









7.
On December 31, 20X8, Mr. and Mrs.
Williams owned a parcel of land held as an investment. The land was purchased
for $40,000 in 20X6, and was encumbered by a mortgage with a principal balance
of $30,000 at December 31, 20X8. On this date the fair value of the land was
$75,000. In the Williams' December 31, 20X8, personal statement of financial
condition, at what amount should the land 











investment and mortgage
payable be reported?

A.
Option A 



B.
Option B 



C.
Option C 



D.
Option D 























The trial balance of WM
Partnership is as follows:



Wilfred
and Mike decide to incorporate their partnership. The partnership's books will
be closed, and new books will be used for W & M Corporation. The following
additional information is available:









1. The estimated
fair values of the assets follow: 

2.
All assets and liabilities are
transferred to the corporation. 



3.
The common stock is $10 par.
Wilfred and Mike receive a total of 10,000 shares. 



4.
The partners share profits and
losses in the ratio 7:3. 



8.
Based on the preceding
information, the journal entry on the partnership's books to record the
Investment in W&M Corporation Stock will be debited for: 

A.
$181,000 



B.
$131,000 

C.
$200,000 



D.
$150,000 



9.
Based on the preceding
information, the journal entry on the partnership's books to record
distribution of stock to prior partners will include a debit to Wilfred,
Capital for: 

A.
$140,000. 



B.
$91,700. 



C.
$86,700. 



D.
$126,700. 



10.
Based on the preceding
information, the journal entry on the partnership's books to record
distribution of stock to prior partners will include a debit to Mike, Capital
for: 

A.
$38,010. 

B.
$31,500. 



C.
$42,000. 



D.
$44,300. 









11.
Based on the preceding
information, the journal entry on W & M Corporation's books to record the
assets and the issuance of the common stock will include a credit to Additional
Paid-In Capital for: 

A.
$0. 



B.
$81,000. 



C.
$31,000. 



D.
$50,000. 



12. The
CRT partnership has decided to terminate operations and to liquidate the
partnership assets. There are no partner loans, and all partners have positive
capital balances. Gains and losses on liquidation and cash distributions to
partners should be allocated as follows:


A.
Option A 



B.
Option B 



C.
Option C 

D.
Option D 



13. According
to UPA 1997, during partnership liquidation, loans the partners have made to
the partnership have the same status as loans from third-party creditors. As a
practical matter, most loans from partners: 



A.
are subordinated to third-party
creditors. 



B.
have the same status as loans from
third-party creditors. 



C.
are paid prior to third-party
creditors. 



D.
None of the above. 



14.
In order to avoid inequalities in
the liquidation process the legal doctrine of setoff effectively treats loans
from partners to the partnership as: 

A.
outside debt that can offset a
deficit capital account balance. 

B.
inside debt that can offset a
deficit capital account balance. 



C.
additional capital investments
that can offset a deficit capital account balance. 



D.
additional capital investments
that can offset a partnership loss. 



15. The
balance sheet given below is presented for the partnership of Janet, Anton, and
Millet: 



The
partners share profits and losses in the ratio of 5:3:2, respectively. The
partners agreed to dissolve the partnership after selling the other assets for
$50,000. On dissolution of the partnership, Janet should receive: 



A.
$0. 



B.
$80,000. 



C.
$10,000. 



D.
$30,000. 









Bill, Page,
Larry, and Scott have decided to terminate their partnership. The partnership's
balance sheet at















the time they decide to
wind up is as follows:



During the winding up of
the partnership, the other assets are sold for $150,000 and the accounts
payable are paid. Page and Larry are personally solvent, but Bill and Scott are
personally insolvent. The partners share profits and losses in the ratio of
4:2:1:3.



16. Based
on the preceding information, what amount will be paid out to Bill upon
liquidation of the partnership? 

A.
$0 



B.
$25,000 



C.
$11,667 



D.
$2,500 



17. Based
on the preceding information, what amount will be paid out to Scott upon
liquidation of the partnership? 

A.
$0 

B.
$2,500 



C.
$25,000 



D.
$65,000 



18.
Based on the preceding information, what amount
will be distributed to Page and Larry upon liquidation 











of the partnership?

A.
Option A 



B.
Option B 

C.
Option C 



D.
Option D 



Bill, Page, Larry, and
Scott have decided to terminate their partnership. The partnership's balance
sheet at

















the time they decide to
wind up is as follows:



During the winding up of the
partnership, the other assets are sold for $150,000 and the accounts payable
are paid. Page and Larry are personally solvent, but Bill and Scott are
personally insolvent. The partners share profits and losses in the ratio of
3:2:1:4.



19. Based
on the preceding information, what amount will be paid out to Bill upon
liquidation of the partnership? 

A.
$0 



B.
$5,000 



C.
$25,000 



D.
$2,500 







20. Based
on the preceding information, what amount will be paid out to Scott upon
liquidation of the partnership? 

A.
$0 



B.
$2,500 



C.
$5,000 



D.
$6,429 



21.
Based on the preceding information, what amounts
will be distributed to Page and Larry upon liquidation 











of the partnership?

A.
Option A 



B.
Option B 



C.
Option C 



D.
Option D 



The following condensed
balance sheet is presented for the partnership of D, E, and F who share profits













and losses in the ratio of
5:3:2, respectively:

The
partners agreed to liquidate the partnership after selling the other assets.



22.
Refer to the above information. If
the other assets are sold for $280,000, how much should F receive upon
liquidation? 

A.
$44,000 

B.
$50,000 



C.
$76,000 



D.
$90,000 



23. Refer
to the above information. If the other assets are sold for $80,000, and all
partners are personally insolvent, how much should E receive upon liquidation? 

A.
$0 cooke



B.
$6,000 



C.
$10,000 

D.
$20,000 
	
,

		
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Anthropology!!!!!!!!!!

Question
	
Identify subsistence modes and its impact on a culture and why a culture acts as it does based on this. Anthropologic research iseither an ethnography or an ethnology. You may use any combination of ethnographies or ethnologies in your paper.Identifies and classifies the selected cultures primary mode of subsistence.
Analyzes and evaluates the impact that the primary mode of subsistence of the selected culture has on at five of the following aspects of culture:
	
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microeconomics!!!!!!!!!!!!!!!!!!!

Question
	
Homework 3        Fall
2012

Due date: October 15th, 2012     Principles of Economics: Micro

 



1.
Some Oakland, California
residents are sick and tired of tripping over burger wrappers and soda cans,
and the city is ready to do something about it. The Oakland City Council is
proposing a tax on fast-food restaurants, gas station markets, liquor stores
and convenience stores that serve take-out food or beverages. Councilwoman Jane
Brunner, who wrote the legislation, estimates that the tax will raise
approximately $237,000 per year, which would cover the cost of a clean-up crew
and the initial purchase of trucks and equipment to keep the streets and
sidewalks surrounding the city’s schools litter free. “Having a clean city
affects everything,” Brunner said.

a)
What is the external cost
associated with take-out food and beverages?













b)
Draw a graph to illustrate and
explain why the market for take-out food and beverages is inefficient or
socially inoptimal.



























c)
Draw a graph to illustrate and
explain how Oakland’s policy might improve efficiency.

























	

The standard cost is how much a product should cost to manufacture

Question
	
True or False: Please indicate whether each statement is true or false. (2 points per question)

1. The standard cost is how much a product should cost to manufacture.
2. Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.
3. An unfavorable cost variance occurs when budgeted cost at actual volumes exceeds actual cost.
4. A centralized business organization is one in which all major planning and operating decisions are made by top management.
5. The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants.
6. Property tax expense for a department store's store equipment is an example of a direct expense.
7. Differential revenue is the amount of increase or decrease in revenue expected from a particular course of action as compared with an alternative.
8. The product cost concept includes all manufacturing costs plus selling and administrative expenses in the cost amount to which the markup is added to determine product price.
9. When a bottleneck occurs between two products, the company must determine the contribution margin for each product and manufacture the product that has the highest contribution margin per bottleneck hour.
10. Care must be taken involving capital investment decisions, since normally a long-term commitment of funds is involved and operations could be affected for many years.
11. Average rate of return equals average investment divided by estimated average annual income.
12. Managers depend on product costing to make decisions regarding continuing operations, advertising, and product mix.
13. The single plantwide overhead rate method is very expensive to apply.
14. In the just-in-time (JIT) philosophy, unexpected downtime is the result of unreliable processes.
15. In a just-in-time (JIT) system, the work in process account will show more transactions than in a traditional cost system.

Multiple Choice (2 points per question):

16. If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is termed:
a. controllable variance
b. price variance
c. quantity variance
d. rate variance

17. The Joyner Corporation purchased and used 126,000 board feet of lumber in production, at a total cost of $1,449,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.5 board feet per unit and a standard price of $12 per board foot. Actual production was 23,000 units.

Compute the material price variance.
a. 63,000F
b. 63,000U
c. 6,000F
d. 6,000U

18. The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:

Standard: 25,000 hours at $10 $250,000
Actual: Variable factory overhead 202,500
Fixed factory overhead 60,000
What is the amount of the factory overhead volume variance?
a. $12,500 favorable
b. $10,000 unfavorable
c. $12,500 unfavorable
d. $10,000 favorable

19. Espinosa Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $242,000, and a desired minimum rate of return of 15%.

The profit margin for Espinosa is:
a. 20%
b. 22%
c. 15%
d. 32%

20. Materials used by Bristol Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A's current sales.

How much would Division C's income from operations increase?
a. $0
b. $90,000
c. $15,000
d. $60,000

21. The balanced scorecard measures
a. only financial information
b. only nonfinancial information
c. both financial and nonfinancial information
d. external and internal information

22. All of the following should be considered in a make or buy decision except
a. cost savings
b. quality issues with the supplier
c. future growth in the plant and other production opportunities
d. the supplier will make a profit that would no longer belong to the business

23. What cost concept used in applying the cost-plus approach to product pricing includes only desired profit in the "markup"?
a. Product cost concept
b. Variable cost concept
c. Sunk cost concept
d. Total cost concept
	

general business data bank

Question
	
21. Recently, there has been
strong concern about climate change such as global warming caused by greenhouse
gases, most notably carbon dioxide.

 



 22. McDonalds, Burger King, and Checkers are competitors since all
three sell fast food to individuals.



ANS: 



 23. The raw materials that organizations use to produce its outputs
are provided by customers.



ANS: 



 24. Other organizations in the same industry or type of business that
provide goods or services to the same set of customers are referred to as
suppliers.



ANS: 



 25. The labor market is made up by people in the environment who can
be hired to work for an organization.



ANS: 





 26. If Johnson Lumber provides trees for Westvaco Paper Manufacturing,
then Johnson Lumber is considered a supplier for Westvaco.



ANS: 



 27. Organizations must manage environmental uncertainty to be
effective.



ANS: 



 28. An organization experiences high uncertainty when internal factors
gradually change over time.



ANS: 



 29. A merger is an effort to spot trends that enable managers to
predict future events.



ANS: 



 30. Given the increasing environmental uncertainty, managers in
partnering organizations are shifting from a partnership orientation to an
adversarial orientation.



ANS: 



 31. A joint venture involves a strategic alliance or program by two or
more organizations.



ANS: 



 32. Due to the stable environment and lack of technological change,
mergers and joint ventures rarely occur in the U.S.



ANS: 



 33. The internal environment within which managers work includes
corporate culture, sociocultural aspects, and customers.



ANS: 



 34. Culture can be defined as the ability to speak different
languages.



ANS: 



 35. Physical symbols are associated with the surface level of
organizational culture.



ANS: 



 36. Symbols, stories, heroes, slogans, and ceremonies combine to
create an organization's culture.

 



 37. The set of key values, beliefs, and norms, that are shared by
members of an organization are combined to create the symbols of an
organization.



ANS: 



 38. A symbol is a figure that exemplifies the deeds, character, and
attributes of a corporate culture.



ANS: 



 39. A narrative based on rumors within the organization that can lead
to destructive results if not carefully controlled by management is called an
organizational story.



ANS: 



 40. A phrase or sentence that succinctly expresses a key corporate
value is called a story.



ANS: 	

general business data bank

Question
	
1. Several years ago, HomeNet purchased a
warehouse for $2,000,000 that is currently sitting empty. HomeNet estimates that the warehouse could be
sold today for $1,500,000. Alternatively,
HomeNet is considering building a new manufacturing facility next to the
warehouse and would use the warehouse to store product until it is
shipped. HomeNet’s marginal tax rate is
35%. How should HomeNet factor the empty
warehouse into its decision of whether or not to build the manufacturing facility?

a. The decision to build the manufacturing
facility is independent of the decision of what to do with the warehouse. As a result, the warehouse has no impact on
the decision about whether to build the manufacturing facility.

b. – 1,500,000

c. +1,500,000

d. –(1,500,000 – (1,500,000 –
2,000,000)(.35))

e. +(1,500,000 – (1,500,000 –
2,000,000)(.35))

f. – 1,500,000(1-.35)

g. +1,500,000(1-.35)



2. Pisa Pizza, a seller of frozen pizza, is
considering introducing a healthier version of its pizza that will be low in
cholesterol and contain no trans fats.
The firm expects that sales of the new pizza will be $50 million per
year. While many of these new sales will
be to new customers, Pisa Pizza estimates that 30% will come from customers who
switch to the new, healthier pizza instead of buying the original version. Suppose that 60% of the customers who will
switch from Pisa Pizza’s original pizza to its healthier pizza will switch to
another brand if Pisa Pizza does not introduce a healthier pizza. What level of incremental sales is associated
with introducing the new pizza in this case?



a. 50(1-tc)

b. 50 – 50(.3)

c. 50(.3)(1-.6)

d. 50 – 50(.3)(1-.6)

e. 50 – 50(1-.6)

f. 50



3. Your firm would like to evaluate a
proposed new operating division. You
have forecasted cash flows for this division for the next four years and have
estimated that the cost of capital is 11%.
You would like to estimate a continuation value. You have made the following forecasts for the
last year of your four-year forecasting horizon (in millions of dollars). You have forecast that revenues, operating
income, net income, and future free cash flows after year 4 will grow at 3% per
year, forever. Estimate the continuation
value (in millions of dollars) in year 4.



 Year
4

Revenues 2400

Operating income 200

Net income 100

Free cash flow 220

Book value of equity 800



a. 

b. 

c. 

d. 
	

Accounting Quiz!

Question


Chapter 17 QUIZ—Earnings Per Share and
Retained Earnings





MULTIPLE CHOICE



QUESTION
# 1

 1. Which
one of the following indicators is intended to show the potential impacts of
possible future events on a corporation's performance?


 

 

 
a.
 
 

 
basic earnings per share
 

 

 

 
b.
 
 

 
cash flow per share
 

 

 

 
c.
 
 

 
diluted earnings per share
 

 

 

 
d.
 
 

 
price/earnings ratio
 









 

QUESTION
# 2

 6. Basic
earnings per share is computed as


 

 

 
a.
 
 

 
Net Income / Total Number of
 Common Shares Outstanding
 

 

 

 
b.
 
 

 
(Net Income- Preferred Dividends) / Total Number of Common Shares
 Outstanding
 

 

 

 
c.
 
 

 
(Net Income- Preferred Dividends) / Weighted-Average Number of Common Shares
 Outstanding
 

 

 

 
d.
 
 

 
Net Income / Weighted-Average
 Number of Common Shares Outstanding
 









QUESTION
# 3

 8. Which
of the following items would not be included in a basic earnings per
share calculation?


 

 

 
a.
 
 

 
undeclared dividends on
 noncumulative preferred stock
 

 

 

 
b.
 
 

 
declared dividends on
 noncumulative preferred stock
 

 

 

 
c.
 
 

 
undeclared dividends on
 cumulative preferred stock
 

 

 

 
d.
 
 

 
declared dividends on
 cumulative preferred stock
 







 



QUESTION
# 4

 9. On
January 1, 2010, Walters Corporation had 24,000 shares of common stock
outstanding. On April 1, it reacquired 2,400 shares; on July 1, it issued
10,800 shares; on October 1, it issued another 9,600 shares; and on December 1,
it reacquired 600 shares. The weighted average number of common shares
outstanding for 2010 was


 

 

 
a.
 
 

 
26,950
 

 

 

 
b.
 
 

 
28,900
 

 

 

 
c.
 
 

 
29,950
 

 

 

 
d.
 
 

 
41,400
 











QUESTION
# 5

 10. On
January 1, 2010, Brennen Corporation had 20,000 shares of common shares
outstanding. During the year, it sold another 2,600 shares on July 1 and
reacquired 600 shares on November 1. The corporation earned $337,600 net
income. The company also has 15,000 shares of $10 par value, 6%, cumulative
preferred stock on which no dividends have been declared for the last two
years. The basic earnings per share for the year is


 

 

 
a.
 
 

 
$15.92
 

 

 

 
b.
 
 

 
$15.65
 

 

 

 
c.
 
 

 
$15.50
 

 

 

 
d.
 
 

 
$15.08
 











QUESTION
# 6

 12. On
January 1, a corporation had 10,380 shares of common stock outstanding. On
August 1, it sold an additional 6,000 shares. During the year, dividends of
$4,800 and $56,000 were declared and paid on the common and preferred stock,
respectively. Net income for the year was $240,000. The basic earnings per
share for the year was


 

 

 
a.
 
 

 
$10.56
 

 

 

 
b.
 
 

 
$11.23
 

 

 

 
c.
 
 

 
$14.29
 

 

 

 
d.
 
 

 
$18.63
 











QUESTION
# 7

 13. On
January 1, 2010, a corporation had 10,380 shares of common stock outstanding,
and on June 1, it reacquired 6,000 shares. Despite a net loss for the year of
$180,000, the company declared and paid cash dividends of $24,000 and $28,000
on common and preferred stock, respectively. The earnings per share for 2010
was


 

 

 
a.
 
 

 
($33.72)
 

 

 

 
b.
 
 

 
($30.24)
 

 

 

 
c.
 
 

 
($22.10)
 

 

 

 
d.
 
 

 
($18.60)
 











QUESTION
# 8

 15. On
January 1, 2010, Smith Company had 21,000 shares of common stock outstanding
and issued an additional 4,500 shares on May 1. The company declared and paid a
cash dividend of $30,000 and earned $330,000 net income. The earnings per share
for the year was


 

 

 
a.
 
 

 
$15.00
 

 

 

 
b.
 
 

 
$13.75
 

 

 

 
c.
 
 

 
$12.94
 

 

 

 
d.
 
 

 
$12.50
 











QUESTION
# 9

 16. Common
shares outstanding are increased as a result of a stock dividend or stock
split. For purposes of calculating the earnings per share, when is the stock
dividend or stock split considered to have occurred?


 

 

 
a.
 
 

 
at the beginning of the
 earliest comparative period for which earnings per share information is
 presented
 

 

 

 
b.
 
 

 
at the end of the earliest
 comparative period for which earnings per share information is presented
 

 

 

 
c.
 
 

 
at the beginning of the year
 declared
 

 

 

 
d.
 
 

 
as of the date of declaration
 







 



QUESTION
# 10

 17. On
January 1, a corporation had 20,000 shares of common stock outstanding. An
additional 4,000 shares were issued on July 1, and on November 1, the company
declared a 3-for-1 stock split. The denominator in the earnings per share
calculation would be


 

 

 
a.
 
 

 
36,000
 

 

 

 
b.
 
 

 
56,000
 

 

 

 
c.
 
 

 
66,000
 

 

 

 
d.
 
 

 
72,000
 









QUESTION
# 11

 18. On
January 1, a corporation had 60,000 shares of common stock outstanding. On
March 1, the company reacquired 12,000 shares, and it declared a 10% stock
dividend on October 1. The denominator in the earnings per share calculation
would be


 

 

 
a.
 
 

 
44,200
 

 

 

 
b.
 
 

 
40,800
 

 

 

 
c.
 
 

 
55,000
 

 

 

 
d.
 
 

 
60,000
 











 

QUESTION
# 12

 22. Reporting
diluted earnings per share is required for which type of corporate capital structure?


 

 

 
a.
 
 

 
simple
 

 

 

 
b.
 
 

 
complex
 

 

 

 
c.
 
 

 
diluted
 

 

 

 
d.
 
 

 
primary
 







 





QUESTION
# 13

 25. The
potential dilutive effect of the exercise of stock options or warrants will
affect which of the following when calculating diluted earnings per share?


 

 

 
a.
 
 

 
the earnings per share
 numerator
 

 

 

 
b.
 
 

 
the earnings per share
 denominator
 

 

 

 
c.
 
 

 
both the numerator and the
 denominator
 

 

 

 
d.
 
 

 
neither the numerator nor the
 denominator
 









QUESTION
# 14

 27. Dual
presentation of the basic and diluted earnings per share amounts is


 

 

 
a.
 
 

 
required for corporations
 with simple capital structures
 

 

 

 
b.
 
 

 
optional for corporations
 with simple capital structures
 

 

 

 
c.
 
 

 
optional for corporations of
 any structure
 

 

 

 
d.
 
 

 
required for corporations
 with complex capital structures
 







 

 



QUESTION
# 15

 29. Smock
Corporation had 30,000 shares of common stock outstanding during the year. In
addition, there were compensatory stock options to purchase 3,000 shares of
common stock at $20 a share outstanding the entire year. The average market
price for the common stock during the year was $36 a share. The unrecognized
compensation cost (net of tax) relating to these options was $4 a share. The
denominator to compute the diluted earnings per share is


 

 

 
a.
 
 

 
31,000
 

 

 

 
b.
 
 

 
31,333
 

 

 

 
c.
 
 

 
31,667
 

 

 

 
d.
 
 

 
33,000
 











QUESTION
# 16

 30. Under
the treasury stock method, the number of shares of common stock assumed to be
reacquired is determined by using the


 

 

 
a.
 
 

 
ending market price of the
 stock
 

 

 

 
b.
 
 

 
average market price of the
 stock
 

 

 

 
c.
 
 

 
beginning market price of the
 stock
 

 

 

 
d.
 
 

 
par value of the stock
 











QUESTION
# 17

 31. The
assumed conversion of convertible debt and preferred stock in diluted earnings
per share calculations affects


 

 

 
a.
 
 

 
the numerator only
 

 

 

 
b.
 
 

 
the denominator only
 

 

 

 
c.
 
 

 
both the numerator and
 denominator
 

 

 

 
d.
 
 

 
neither the numerator nor the
 denominator
 











QUESTION
# 18

 34. In
the determination of the diluted earnings per share, convertible securities are


 

 

 
a.
 
 

 
included if they are dilutive
 

 

 

 
b.
 
 

 
included whether they are
 dilutive or not
 

 

 

 
c.
 
 

 
included if they are
 antidilutive
 

 

 

 
d.
 
 

 
not included
 







 



QUESTION
# 19

 35. Interest
expense on convertible bonds that are dilutive is included in the numerator of
the diluted earnings per share calculation at an amount equal to


 

 

 
a.
 
 

 
interest expense
 

 

 

 
b.
 
 

 
interest payable
 

 

 

 
c.
 
 

 
interest expense times the
 tax rate
 

 

 

 
d.
 
 

 
interest expense times one
 minus the tax rate
 









 

QUESTION
# 20

 36. The
term deficit in financial accounting means


 

 

 
a.
 
 

 
net loss
 

 

 

 
b.
 
 

 
a negative retained earnings
 balance
 

 

 

 
c.
 
 

 
a negative cash balance
 

 

 

 
d.
 
 

 
a negative stockholders'
 equity total
 







 



QUESTION
# 21

 37. How
will a company's working capital and net income be affected by the recording of
a cash dividend on the declaration date? (Assume the dividend is paid on a
later date.)




 

 

 

 
 

 
Working Capital
 
 

 
Net Income
 

 

 

 
I.
 
 

 
decrease
 
 

 
decrease
 

 

 

 
II.
 
 

 
decrease
 
 

 
no effect
 

 

 

 
III.
 
 

 
no effect
 
 

 
no effect
 

 

 

 
IV.
 
 

 
no effect
 
 

 
decrease
 






 

 

 
a.
 
 

 
I
 

 

 

 
b.
 
 

 
II
 

 

 

 
c.
 
 

 
III
 

 

 

 
d.
 
 

 
IV
 









 



QUESTION
# 22

 45. The
Carol Company has issued 10%, fully participating, cumulative preferred stock
with a total par value of $600,000 and common stock with a total par value of
$900,000. No dividends are in arrears. How much cash will be paid to the
preferred stockholders and the common stockholders, respectively, if cash
dividends of $141,000 are distributed?


 

 

 
a.
 
 

 
$ 60,000 and $90,000
 

 

 

 
b.
 
 

 
$114,000 and $27,000
 

 

 

 
c.
 
 

 
$ 51,000 and $90,000
 

 

 

 
d.
 
 

 
$ 60,000 and $81,000
 











QUESTION
# 23

 46. The
Farmer Company has issued 10%, fully participating, cumulative preferred stock
with a total par value of $300,000 and common stock with a total par value of $900,000.
Dividends for one previous year are in arrears. How much cash will be paid to
the preferred stockholders and the common stockholders, respectively, if cash
dividends of $222,000 are distributed at the end of the current year?


 

 

 
a.
 
 

 
$85,500 and $136,500
 

 

 

 
b.
 
 

 
$78,000 and $144,000
 

 

 

 
c.
 
 

 
$60,000 and $162,000
 

 

 

 
d.
 
 

 
$55,500 and $166,500
 









 



QUESTION
# 24

 49. On
November 1, 2010, the Metal Construction Company declared a property dividend
payable in the form of bonds held for long-term investment purposes. The bonds
will be distributed to the common stockholders on December 15, 2010. The bonds
to be distributed to the common stockholders originally cost Metal $210,000.
Fair value of the bonds on various dates is as follows:




 

 

 
December 31, 2009
 
 

 
$220,000
 

 

 

 
November 1, 2010
 
 

 
225,000
 

 

 

 
December 15, 2010
 
 

 
230,000
 





Which one of the following
amounts should be used to record the appropriate credit to Property Dividends
Payable?


 

 

 
a.
 
 

 
$210,000
 

 

 

 
b.
 
 

 
$220,000
 

 

 

 
c.
 
 

 
$225,000
 

 

 

 
d.
 
 

 
$230,000
 











QUESTION
# 25

 51. How
will a company's total current liabilities and total stockholders' equity be
affected by the declaration of a stock dividend? (Assume the stock dividend is
distributed at a later date.)




 

 

 

 
 

 
Total
 
 

 
Total
 

 

 

 

 
 

 
Current Liabilities
 
 

 
Stockholders' Equity
 

 

 

 
I.
 
 

 
increase
 
 

 
decrease
 

 

 

 
II.
 
 

 
increase
 
 

 
no effect
 

 

 

 
III.
 
 

 
no effect
 
 

 
decrease
 

 

 

 
IV.
 
 

 
no effect
 
 

 
no effect
 






 

 

 
a.
 
 

 
I
 

 

 

 
b.
 
 

 
II
 

 

 

 
c.
 
 

 
III
 

 

 

 
d.
 
 

 
IV
 











Exhibit 17-1

The Zoeller Corporation's
stockholders' equity accounts have the following balances as of December 31,
2010:




 

 

 
Common stock, $10 par (30,000
 shares issued
 
 

 

 

 

 

 
 and outstanding)
 
 

 
$ 300,000
 

 

 

 
Additional paid-in capital
 
 

 
2,000,000
 

 

 

 
Retained earnings
 
 

 
 5,700,000
 

 

 

 
Total stockholders' equity
 
 

 
$8,000,000
 

 

 

 

 
 

 

 





QUESTION
# 26

 52. Refer
to Exhibit 17-1. On January 2, 2011, the board of directors of Zoeller declared
a 30% stock dividend to be distributed on January 31, 2011. The market price
per share of Zoeller's common stock was $30 on January 2 and $32 on January 31.
As a result of this stock dividend, the retained earnings account should be decreased
by


 

 

 
a.
 
 

 
$ 90,000
 

 

 

 
b.
 
 

 
$270,000
 

 

 

 
c.
 
 

 
$288,000
 

 

 

 
d.
 
 

 
zero; only a memorandum entry
 is required
 











QUESTION
# 27

 54. The
Martin Company's stockholders' equity accounts have the following balances as
of December 31, 2010:




 

 

 
Common stock, $20 par (25,000
 shares issued of which
 
 

 

 

 

 

 
 2,000 are being held as treasury stock)
 
 

 
$ 500,000 
 

 

 

 
Additional paid-in capital
 
 

 
750,000 
 

 

 

 
Retained earnings
 
 

 
 2,250,000 
 

 

 

 

 
 

 
$3,500,000 
 

 

 

 
Less: Treasury stock (2,000
 shares at cost)
 
 

 
 (120,000)
 

 

 

 

 
 

 
Total stockholders' equity
 
 

 
$3,380,000 
 

 

 

 

 






On January 2, 2011, the board
of directors of Martin declared a 10% stock dividend to be distributed on
February 15, 2011. The market price of Martin Company's common stock was $65
per share on January 2, 2011. On the date of declaration, the retained earnings
account should be decreased by


 

 

 
a.
 
 

 
zero; only a memorandum entry
 is required
 

 

 

 
b.
 
 

 
$ 50,000
 

 

 

 
c.
 
 

 
$149,500
 

 

 

 
d.
 
 

 
$162,500
 











QUESTION
# 28

 55. A
dividend that represents a return of capital rather than a distribution of
retained earnings is called a


 

 

 
a.
 
 

 
property dividend
 

 

 

 
b.
 
 

 
stock dividend
 

 

 

 
c.
 
 

 
capital dividend
 

 

 

 
d.
 
 

 
liquidating dividend
 







 



QUESTION
# 29

 56. When
a company is determining its dividend policy, the company must adhere to legal
requirements. The legal requirements are determined by the


 

 

 
a.
 
 

 
Financial Accounting
 Standards Board (FASB)
 

 

 

 
b.
 
 

 
state in which the company
 was incorporated
 

 

 

 
c.
 
 

 
Securities and Exchange
 Commission (SEC)
 

 

 

 
d.
 
 

 
Federal Trade Commission
 (FTC)
 







 



QUESTION
# 30

 57. If
a company makes a prior period adjustment, which of the following describes how
it must be reported?


 

 

 
a.
 
 

 
The adjustment is recorded in
 retained earnings, and previous years' financial statements presented for
 comparative purposes are not changed.
 

 

 

 
b.
 
 

 
The adjustment is recorded in
 retained earnings, and previous years' financial statements presented for
 comparative purposes are adjusted.
 

 

 

 
c.
 
 

 
The adjustment is reported in
 the current period's income statement as a separate item.
 

 

 

 
d.
 
 

 
The adjustment is recorded as
 a deferred asset or deferred liability and amortized using the straight-line
 method.
 







 



QUESTION
# 31

 60. Which
of the following could be a component of other comprehensive income (loss)?


 

 

 
a.
 
 

 
realized gains or losses from
 sale of investments in available-for-sale securities
 

 

 

 
b.
 
 

 
translation adjustments from
 converting the financial statements of a company's foreign operations into
 U.S. dollars
 

 

 

 
c.
 
 

 
gains (losses) on
 extraordinary items
 

 

 

 
d.
 
 

 
warranty liability
 adjustments
 









 

QUESTION
# 32

 61. How
may a corporation report its types of comprehensive income?


 

 

 
a.
 
 

 
It may report the amount of
 accumulated other comprehensive income for each item as part of stockholders'
 equity.
 

 

 

 
b.
 
 

 
It may report the total
 amount of accumulated other comprehensive income for all the items as part of
 stockholders' equity.
 

 

 

 
c.
 
 

 
It may make footnote
 disclosures of totals only.
 

 

 

 
d.
 
 

 
It may report the amount of
 accumulated other comprehensive income for each item or in total as part of
 stockholders' equity.
 











QUESTION
# 33

 63. The
following information is provided for the Columbus Company:




 

 

 
Deferred compensation
 payable-stock appreciation rights
 
 

 
$ 10
 

 

 

 
Bonds payable
 
 

 
120
 

 

 

 
Additional paid-in capital on
 common stock
 
 

 
20
 

 

 

 
Donated capital
 
 

 
16
 

 

 

 
Treasury stock (at cost)
 
 

 
8
 

 

 

 
Common stock, $1 par
 
 

 
100
 

 

 

 
Common stock option warrants
 
 

 
40
 

 

 

 
Unrealized increase in value
 of available for sale securities
 
 

 
28
 

 

 

 
Additional paid-in capital
 from treasury stock
 
 

 
3
 

 

 

 
Retained earnings
 
 

 
57
 





What is the total stockholders'
equity of Columbus Company?


 

 

 
a.
 
 

 
$212
 

 

 

 
b.
 
 

 
$228
 

 

 

 
c.
 
 

 
$256
 

 

 

 
d.
 
 

 
$272
 

 

 

 
e.
 
 

 
none of these
 







 

QUESTION
# 34

 65. When
recording the receipt of donated assets, the credit could be to


 

 

 
a.
 
 

 
Retained Earnings
 

 

 

 
b.
 
 

 
Donated Capital
 

 

 

 
c.
 
 

 
Gain on Donations
 

 

 

 
d.
 
 

 
a contra account to the asset
 







 



QUESTION
# 35

 67. Which
of the following stockholders' equity disclosures are required under both GAAP
and IFRS?


 

 

 
a.
 
 

 
capital not yet paid in
 

 

 

 
b.
 
 

 
restrictions on the repayment
 of capital
 

 

 

 
c.
 
 

 
dividend preferences
 

 

 

 
d.
 
 

 
shares reserved for future
 issuances under sales contracts
 



















QUESTION
# 36

 68. The
two defined sections of stockholders' equity under IFRS are


 

 

 
a.
 
 

 
contributed capital and other
 equity
 

 

 

 
b.
 
 

 
share capital and retained
 earnings
 

 

 

 
c.
 
 

 
contributed capital and
 retained earnings
 

 

 

 
d.
 
 

 
share capital and other
 equity
 







 



QUESTION
# 37

 69. Differences
exist between IFRS and GAAP in the reporting of EPS. Which of the following
areas is not an area of difference?


 

 

 
a.
 
 

 
adjustment in options
 calculations for unrecognized compensation cost
 

 

 

 
b.
 
 

 
treatment of unvested
 contingently issued shares
 

 

 

 
c.
 
 

 
treatment of dividends in
 arrears for convertible preferred stock
 

 

 

 
d.
 
 

 
treatment of contracts that
 may be settled in shares or for cash
 







 



QUESTION
# 38

 70. Specific
EPS disclosure is regularly reported for extraordinary items under




 

 

 

 
 

 
IFRS
 
 

 
GAAP
 

 

 

 
I.
 
 

 
yes
 
 

 
no
 

 

 

 
II.
 
 

 
no
 
 

 
yes
 

 

 

 
III.
 
 

 
yes
 
 

 
yes
 

 

 

 
IV.
 
 

 
no
 
 

 
no
 






 

 

 
a.
 
 

 
I
 

 

 

 
b.
 
 

 
II
 

 

 

 
c.
 
 

 
III
 

 

 

 
d.
 
 

 
IV