question_key2_6Dec question_key2_6Dec Question 1. What are the four major types of business markets, and what are the characteristics of each?2. Discuss the differences between business and consumer transactions.3. What are some of the major concerns of business customers in making purchase decisions?4. What factors affect the purchase method that business customers choose?5. Compare and contrast the three major types of purchases made by business customers.6. Discuss how demand for business products differs from demand for consumer products.7. What is derived demand?8. Explain how purchase decisions for business products may be influenced by persons in abuying center.9. Draw and label the framework that represents the business buying decision process and thefactors that influence it.10. In what ways do environmental factors affect the business buying decision process?11. How do a firm's objectives affect the business buying decision process?12. Discuss how interpersonal factors influence the business buying decision process.13. How do individual factors affect the business buying decision process?14. Compare and contrast the consumer buying decision process and the business buyingdecision process.15. In what ways can an industrial classification system be used by business marketers toanalyze target markets?16. What are the major advantages of the North American Industry Classification System (NAICS)compared to the Standard Industrial Classification (SIC) system?17. A(n) _____ market consists of individuals or groups that purchase products for resale, use inproduction, or daily operations.18. The three purposes for which individuals or groups can use products in order for it to beconsidered a business market area) use in daily operations, end consumption, and resale.b) direct use in producing other products, company travel, and end consumption.c) resale, use in daily operations, and direct use in producing other products.d) governmental, institutional, and reseller purposes.e) making other products, selling to other businesses, making component parts.19. In business markets, individuals or groups purchase products for one of three purposes.These purposes area) resale, wholesale, and direct use.b) wholesale, direct use, and use in producing other products.c) resale, wholesale, and use in producing other products.d) resale, direct use in producing other products, and use in general daily operations.e) use in general daily operations, wholesale, and resale.20. When Hunter Ceiling Fans buys electrical wire for use in producing its ceiling fans, Hunter ispart of what type of market for electrical wire?a) Resaleb) Wholesalec) Customerd) Consumere) Business21. Business markets are typically divided into four categories. These categories area) retailers, wholesalers, services, and nonprofit firms.b) producer, manufacturer, reseller, and government.c) producer, reseller, government, and institutional.d) manufacturer, wholesaler, retailer, and services.e) reseller, retailer, government, and institutional.22. Individuals and business organizations that purchase products for the purpose of making aprofit either by using the products to produce other products or by using them in their operationsare classified as ___________ markets.a) consumerb) institutionalc) producerd) governmente) reseller23. An accountant who purchases software for maintaining clients' books is an example of abuyer in a(n) ___________ market.a) consumerb) producerc) resellerd) governmente) institutional24. Individuals and business organizations that buy finished goods and resell them to make aprofit without changing the physical characteristics of the product are classified as ___________markets.a) consumerb) institutionalc) producerd) governmente) reseller25. ______ buy products from manufacturers and then resell the products to other firms in thedistribution system.a) Retailersb) Producersc) Distributorsd) Warehousese) Wholesalers26. Mike's Roadside Market buys produce from area farmers, marks the merchandise at a pricethat includes some profit, and then sells the fruit and vegetables to the people in and aroundCenterville. Mike's would be classified as part of a ___________ market.a) consumerb) producerc) governmentd) resellere) wholesaler27. Snappy Tools, Inc., purchases hammers, bolts, and other hardware items from a variety ofmanufacturers and sells them to hardware stores at a price that includes a profit for Snappy Tools,Inc. The company would be part of what type of business market?a) Resellerb) Producerc) Consumerd) Governmente) Supply28. Motorola buys silicone which is used in its chip-making process. Motorola producesmicrochips for use within a wide variety of products for other firms, such as Ford, GM and Samsung.Motorola is a buyer in a _____ market.a) producerb) governmentc) resellerd) constructione) institutional29. Retailers like Target and Kmart are considered to be members of which business market?a) Resellerb) Customerc) Producerd) Institutionale) Services30. Kroger Grocery Store is an example of a reseller. Which of the following factors concerningreseller purchase decisions is false?a) Resellers are concerned with the level of demand for the product.b) Resellers are not concerned with how much space the product takes up as long as it has ahigh price.c) Resellers want producers to be able to supply adequate quantities of the product.d) Resellers are concerned with the availability of technical and promotional assistance fromthe producer.e) Resellers are concerned with the markup percentage they can get on the product.
general business data bank general business data bank Question Administrative Law TRUE/FALSE QUESTIONS B1. Administrative agencies create administrative law. B2. Administrative agencies may issue regulations. B3. Congress creates federal administrative agencies. B4. The president of the United States has the power to appoint the members of federal administrative agencies. B5. Administrative agencies are independent of the executive, judicial, and legislative branches of government. B6. Administrative agencies donothave rule-making powers. 444TEST BANK B—UNIT NINE: GOVERNMENT REGULATION B7. Administrative rules donothave binding legal effect. B8. Federal agencies must follow formal procedures to make policy. B9. A subpoenaad testificandumis an order to an individual or organization to hand over certain records, papers, or books. B10. An administrative agency can compel a witness to appear at an agency hearing. B11. Administrative agencies must rely on the voluntary statements of third parties to fulfill the agencies’ fact-gathering function. B12. An administrative agency cannot conduct a search without a warrant. B13. Administrative agencies have adjudicatory powers. B14. Most disputes over administrative actions are resolved through negotiated settlements at their initial stages. CHAPTER 43: ADMINISTRATIVE LAW445 B15. Any party to a case may appeal the order of an administrative law judge to the board or commission that governs the agency. B16. The judicial branch exercises control over administrative agencies through its power to fund them. B17. A regulated party can take a dispute about the regulation to a court rather than going through the administrative adjudicatory process. B18. Congress can “freeze” the enforcement of a regulation before it takes effect. B19. Under the Regulatory Flexibility Act, administrative agencies have the flexibility to issue any regulation that will have “a significant impact.” B20. Federal agencies must prepare guides that explain in “plain English” how small businesses can comply with federal regulations.. MULTIPLE CHOICE QUESTIONS B1. Congress leaves it to the Bureau of Prisons to oversee the promulgation of detailed regulations in areas under the agency’s jurisdiction. This is a. divine right. b. the delegation of legislative powers. c. gap-filling power. d. unconstitutional conduct. 446TEST BANK B—UNIT NINE: GOVERNMENT REGULATION B2. Seafood Restaurant Company pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by a. Congress, through enabling legislation. b. the courts, through the adjudicatory process. c. the U.S. Constitution, through the _ Amendment. d. the U.S. Department of the Treasury, through a final order. B3. Persons who favor the creation of a National Biotech Agency to regulate the production of genetically altered agricultural products should concentrate their lobbying efforts on a. Congress. b. federal administrative agencies that oversee agricultural products. c. the United States Supreme Court. d. the president of the United States. B4. Truck Transport Company is subject to a decision by the National Labor Relations Board. Truck Transport appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision a. followed a consideration of legally appropriate factors. b. justifiably changed the agency’s prior policy. c. was accompanied by a rational explanation. d. was plainly contrary to the evidence. B5. The Office of Postsecondary Education, like other federal administrative agencies, is part of the government’s a. administrative branch. b. executive branch. c. judicial branch. d. legislative branch. CHAPTER 43: ADMINISTRATIVE LAW447 B6. The Federal Highway Administration uses notice-and-comment rulemaking. This process begins with a. a request to Congress to enact enabling legislation. b. the filing of a complaint against a charged party. c. the publication of a notice of proposed rulemaking. d. the solicitation of public comments. B7. The U.S. Citizenship and Immigration Service issues a rule. Like the rules of other federal administrative agencies, this rule is compiled in a. theAdministrative Register of the Federal Government. b. theCode of Federal Regulations. c. theFederal Rules of Civil Procedure. d. theUnited States Code. B8. In reviewing the actions of the U.S. Office of Nuclear Energy and other agencies, the courts a. are usually reluctant to review questions of fact. b. rarely defer to the technical expertise of administrative agencies. c. often rule on the merits of policy determinations. d. all of the choices. B9. The Equal Employment Opportunity Commission (EEOC) orders First Financial Company to reveal certain information. First Financial complains to a court, arguing that the order is an abuse of the EEOC’s discretion. Like other agencies, the EEOC can use a subpoena to a. obtain any information, without limits. b. obtain assurances that the law is not being violated. c. obtain documents, but not to compel a party to testify. d. pressure a party to settle an unrelated matter
The assignment was for my art, music and movement class The assignment was for my art, music and movement class Question The assignment was for my art, music and movement class Considering everything you have learned in this course, in a 2-3 page paper write a personal action plan that strategizes how you will implement the ideas learned throughout this course. Describe at least 3 ideas that you will implement within the next month and at least 3 ideas that you hope to implement within the next six months. Support your statements with evidence from the required studies and your research.
accounts data bank accounts data bank Question 23. Dover Company owns 90% of the capital stock of a foreign subsidiary located in Italy. Dover's accountant has just translated the accounts of the foreign subsidiary and determined that a debit translation adjustment of $80,000 exists. If Dover uses the equity method for its investment, what entry should Dover record in order to recognize the translation adjustment? A. Option A B. Option B C. Option C D. Option D 24. For each of the items listed below, state whether they increase or decrease the balance in cumulative translation adjustments (assuming a credit balance at the beginning of the year) when the foreign currency strengthened relative to the U.S. dollar during the year. A. Option A B. Option B C. Option C D. Option D 25. Nichols Company owns 90% of the capital stock of a foreign subsidiary located in Ireland. As a result of translating the subsidiary's accounts, a debit of $160,000 was needed in the translation adjustments account so that the foreign subsidiary's debits and credits were equal in U.S. dollars. How should Nichols report its translation adjustments on its consolidated financial statements? A. As a $144,000 increase in the stockholders' equity section of the balance sheet. B. As a $144,000 reduction in consolidated comprehensive net income. C. As a $160,000 debit in stockholders' equity section of the balance sheet. D. As a $160,000 reduction in consolidated comprehensive net income. 26. Under the temporal method, which of the following is usually used to translate monetary amounts to the functional currency? I. The current exchange rate II The historical exchange rate III. Average exchange rate A. I B. III C. II D. Either I or II 27. Refer the information provided above. Assuming the U.S. dollar is the functional currency, what is the amount of Mercury's cost of goods sold remeasured in U.S. dollars? A. $1,680 B. $1,712 C. $1,700 D. $1,692 28. Based on the preceding information, the translation of cost of goods sold for 2008, assuming that the Spanish peseta is the functional currency is: A. $1,700. B. $1,760. C. $1,680. D. $1,692.
accounts data bank accounts data bank Question Q19. Using the data below prepare a common size income statement? ($ 000) ($ 000) Sales revenue 30,000 Cost of goods sold 21,000 Gross profit 9,000 operating expenses Selling expenses 3,000 General and admin. expenses 1,800 Lease expenses 200 Depreciation expenses 1,000 Total operating expenses 6,000 Operating profit 3,000 Interest 1,000 EBT 2,000 Tax (40% of EBT) 800 Net profit 1,200 Q20. Use the data given below to calculate the values for the following: sales $40,000,000 Gross Profit Margin 80% Operating Profit Margin 35% Net Profit Margin 8% Return on total assets 16% Return on common equity 20% Total asset turnover 2 Average collection period 62.2 days Required: a) Gross profit b) Cost of goods sold c) Operating profit d) Operating expenses e) Earnings available for common shareholders f) Total assets g) Total common stock equity h) Accounts receivable It is a 365 days year, assume all sales are on credit basis. Q21. Euro Designs, Inc., expects sales during 2010 to rise from the 2009 level of $3.5 million to $3.9 million. Because of a scheduled large loan payment, the interest expense in 2010 is expected to drop to $325,000. The firm plans to increase its cash dividend payments during 2010 to $320,000. The company’s year-end 2009 income statement is below. ($ 000) Sales 3,500 Cost of goods sold 1,925 Gross profit 1,575 operating expenses 420 Operating profit 1,155 Interest 400 EBT 755 Tax (40% of EBT) 302 Net profit 453 Cash Dividend 250 Addition to retained earnings 203 Use the percent-of-sales method to prepare a 2007 pro forma income statement for Euro Designs, Ltd.
Assignment 2—Applying Decision-Making Skills Assignment 2—Applying Decision-Making Skills Question As a manager, part of your role is to develop strategy, and share this strategy with various stakeholders within the organization. This assignment will allow you to take your findings as a manager and communicate these findings to those who are affected.Your company has been presented with a decision on replacing a piece of equipment for a new computerized version that promotes efficiency for the upcoming year. As manager you will need to decide whether or not the purchase of the new equipment is a worthwhile investment and to communicate your recommendations to Executive Management for a final decision. To be convincing, sufficient support for your recommendations must be provided in order to be considered valid and accepted.Existing EquipmentOriginal Cost 60,000Present Book Value 30,000Annual Cash Operating Costs 145,000Current Market Value 15,000Market Value in Ten Years 0Remaining useful Life 10 yearsReplacement EquipmentCost 600,000Annual Cash Operating Costs 50,000Market Value in Ten Years 0Useful Life 10 yearsOther InformationCost of Capital 10%Payback requirement 6 yearsIn this assignment, use the information above to develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version. Develop an executive summary of your findings in a Microsoft PowerPoint presentation format to present to Executive Management.Do the following in your presentation:Include a statement of the problem or topic, a concise analysis of the findings, and a recapitulation of any main conclusions or recommendations.Be sure to incorporate specific details to highlight or support the summary including calculations.Using your knowledge of capital budgeting techniques, explain how principles of capital budgeting, such as the payback method, IRR, and NPV, can be used to assess the potential projects and assist in the decision-making process.Develop a 10-12 slide presentation in PowerPoint format. Apply APA standards to citation of sources.
general business data bank general business data bank Question 161. When the manager of a local electronics store decides to offer its customers a gift-wrapping service for the holidays, this is a decision about: A. Product B. Place C. Promotion D. Price 162. When a supermarket manager decides to offer online ordering at the store's website, this is a decision about: A. Product B. Place C. Promotion D. Price 163. When a supermarket manager decides to set up an end-of-aisle display for 12-pack containers of Coke Zero, this is a decision about: A. Product B. Place C. Promotion D. Price 164. When a department store manager decides to offer its female shoppers a free trial of Clinique's new skin cream, this is a decision about: A. Product B. Place C. Promotion D. Price 165. When a supermarket manager decides the amount to charge customers for home delivery of grocery items, this is a decision about: A. Product B. Place C. Promotion D. Price 166. When the manager of a RadioShack electronics store decides to accept American Express credit cards from its customers, this is a decision about: A. Product B. Place C. Promotion D. Price 167. When the manager of a RadioShack electronics store decides to offer a store credit card (RadioShack VISA), this is a decision about: A. Product B. Place C. Promotion D. Price 168. Which of the following is an economic need which helps explain why consumers choose a particular retailer? A. Prestige B. Status C. Comfort D. Value E. Safety 169. Most conventional retailers in the U.S. are: A. supermarkets. B. mass-merchandisers. C. limited-line stores. D. specialty stores. E. department stores. 170. Which of the following is the best example of a conventional retailer? A. A limited-line store. B. A department store. C. A supermarket. D. A convenience (food) store. E. None of these is a good example of a conventional retailer. 171. According to the text, single-line stores are also known as A. general stores. B. limited-line stores. C. specialty shops. D. department stores. E. boutique stores. 172. A limited-line store is to a single-line store as A. a tennis shop is to a sporting goods store. B. a paint store is to a drugstore. C. quality is to price. D. a CD and tape store is to a movie theater. E. full service is to self-service. 173. A typical problem for limited-line retailers is that: A. it is almost impossible for them to satisfy any particular target markets better than other types of retailers. B. their marketing strategy usually relies only on low price. C. they usually cannot carry enough items in a line for any customers to find what they want. D. many of the items they carry are slow moving. E. All of these are problems for limited-line retailers. 174. Which of the following statements about single- and limited-line stores is TRUE? A. Many are small, with high expenses relative to sales. B. They usually believe in a "buy low and sell high" philosophy. C. Such stores face the costly problem of having to stock some slow-moving items in order to satisfy their target markets. D. Most conventional retailers are single- or limited-line stores. E. All of these statements about single- and limited-line stores are TRUE. 175. Limited-line stores A. specialize in certain lines of related products rather than a wide assortment. B. carry anything they can sell in reasonable volume. C. are a type of unconventional general store. D. are larger stores that are organized into many separate departments and offer many product lines. E. seldom build good relationships with their customers. 176. A _____ is a type of conventional limited-line store that is usually small and has a distinct "personality." A. general store B. mass-merchandising shop C. specialty shop D. department store E. hypermarket 177. A _________ aims at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service. A. general store B. mass-merchandising shop C. specialty shop D. department store E. convenience store 178. Specialty shops: A. offer fewer services than the typical limited-line store. B. have trouble deciding what to carry because it's hard for them to get to know what their customers want. C. rely heavily on knowledgeable salesclerks. D. usually sell convenience products. E. None of these alternatives are correct for specialty shops. 179. Specialty shops generally: A. want to be known for the distinctiveness of their product assortment and the special services they offer. B. sell homogeneous shopping products. C. are very good at speeding turnover. D. carry complete lines--like department stores. E. All of these alternatives are correct for specialty shops. 180. The "Fashion Place" carries a carefully selected and distinctive assortment of traditional women's business clothing and accessories for upper-class executives in Boston. It emphasizes customer service with its well-trained salesclerks. The store is probably a: A. small department store. B. specialty shop. C. convenience store. D. single-line store. E. limited-line store. 181. "Soak" is a retailer with two locations in a major metropolitan area, both of which are in large, popular shopping centers. It carries a unique assortment of high-quality shower and bath products, such as soaps, bubble bath, and bath oils. One of its most popular products is a "bath bomb"--a round ball that fizzes and releases aromatic bath oils when placed in a bathtub filled with warm water. The small staff at the store is very knowledgeable about the store's products and provides a high level of customer service. "Soak" would be classified as a: A. Convenience store. B. Department store. C. Discount house. D. Specialty shop. E. General store. 182. Compared to more conventional retailers, which of the following retailers offer both expanded assortment and service? A. Mass-merchandisers. B. Door-to-door salespeople. C. Direct-mail retailers. D. Specialty shops. E. Supermarkets. 183. Department stores: A. Are no longer a major retail force in large U.S. cities. B. Have increased in number since the 1970s. C. Usually offer many product lines. D. Have increased their share of retail business since the 1970s. E. Are not threatened by mass-merchandising retailers. 184. Department stores: A. usually aim at customers seeking convenience products. B. have accounted for a larger share of retail sales every year since 1950. C. have no trouble holding their own against mass-merchandisers. D. are organized into separate departments. E. All of these alternatives are true for department stores. 185. Department stores: A. are basically a group of limited-line stores under one roof. B. are decreasing in number, average sales per store, and share of retail business. C. usually aim at customers seeking shopping products. D. are usually strong in customer service. E. All of these alternatives are true for department stores. 186. Department stores: A. are large stores which emphasize depth and distinctiveness rather than variety. B. have declined since the 1970s because of competition from well-run limited-line stores and mass-merchandisers. C. are usually weak in customer service. D. usually emphasize specialty products. E. All of these alternatives are true for department stores. 187. ___________ stores are usually strong in customer services, including credit, merchandise return, delivery, and sales help. A. General B. Limited-line C. Department D. Specialty E. Luxury 188. The "mass-merchandising" concept: A. suggests aiming at small but profitable target markets. B. focuses on increasing sales and speeding turnover by lowering prices. C. supports the conventional retailer's "buy-low and sell-high" philosophy. D. stresses the need for conventional stores. E. All of these alternatives are correct for the "mass-merchandising" concept. 189. The ____________ says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. A. Wheel of retailing theory B. Production concept C. Mass-merchandising concept D. Sales concept E. Primary industry theory 190. Which of the following are NOT "conventional retailers"? A. Single-line stores B. General stores C. Supermarkets D. Limited-line stores E. None of these, i.e., all are "conventional retailers." 191. Compared to conventional retailers, which of the following types of retailers offer a wider product assortment but less service? A. Convenience stores. B. Supermarkets. C. Telephone order retailers. D. Department stores. E. Limited-line stores. 192. Expanded assortment and/or reduced margins and service are characteristic of A. supermarkets. B. convenience stores. C. specialty shops. D. the Internet. E. department stores. 193. The first retailers to really show the importance of the mass-merchandising concept were the operators of: A. general stores. B. supermarkets. C. single-line stores. D. department stores. E. limited-line stores. 194. Which of the following retailers was the first to adopt the mass-merchandising concept? A. Department stores. B. Discount houses. C. Supermarkets. D. General stores. E. Supercenters. 195. A retail store that averages about $17 million in sales annually and specializes in groceries--with self-service and large assortments is a: A. mass-merchandiser. B. specialty shop. C. convenience food store. D. discount house. E. supermarket. 196. Supermarkets: A. Usually earn net profits that are at least 15 percent of sales. B. Were late adopters of the mass-merchandising concept. C. Usually carry about 100,000 product items per store. D. Are designed to maximize efficiency. E. All of these alternatives are correct for supermarkets. 197. Regarding supermarkets, which of the following statements is TRUE? A. It's best to think of supermarkets as "conventional retailers." B. Supermarket net profits after taxes usually are about 1 percent of sales--or less. C. Worldwide, supermarkets make up the majority of food stores. D. The early supermarkets were based on the premise that consumers would pay more for better selection and service. E. All of these statements about supermarkets are TRUE. 198. Supermarkets are A. stores offering "hard goods" at substantial price cuts to customers. B. large, self-service stores with many departments that emphasize "soft goods" and staples but still follow the discount house's emphasis on lower margins to get faster turnover. C. large stores specializing in groceries with self-service and wide assortments. D. very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases routinely. E. a convenience-oriented variation of the conventional limited-line food stores. 199. Regarding supermarkets, which of the following statements is TRUE? A. They average less than $5 million a year in sales. B. Net profits after taxes usually amount to about 3 percent of sales. C. Compared to super warehouse stores, they offer lower prices and more service. D. None of these statements is TRUE. 200. Regarding supermarkets, which of the following is NOT true? A. They introduced self-service to reduce their costs. B. After-tax profits are very good--averaging 10 to 15 percent of sales. C. The newer ones carry 47,000 product items. D. They average about $17 million a year in sales. E. They got their start as an experiment during the Depression.
Cleaners,Inc.is considering purchasing equipment Cleaners,Inc.is considering purchasing equipment Question 29.Cleaners,Inc.is considering purchasing equipment costing$60,000 with a 6-year useful life.The equipment will provide cost savings of14,600 and will be depreciated straight-line over its useful life with no salvage value.Cleaners requires a 10% rate of return Presents Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 13% 6 4.623 4.486 4.355 4.231 4.111 3.784 29-1.What is the approximate net present value of this investment? a.27,600 b.3,583 c.1,772 d.5,496 29-2.What is the approximate profitability index associated with this equipment? a.1.23 b.1.03 c.1.06 d.0.73 29-3.What is the approximate internal rate of return for this investment? a.9% b.10% c.11% d.12% 30.Present Value of an Annuity of 1 Periods 8% 9% 10% 1 .926 .917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 30-1.A company has a minimum required rate of return of 10%.It is considering investing in a project that costs$50,000 and is expected to generate cash inflows of 25,000 at the end of each year for three years.The profitability index for this project is a.0.80 b.1.00 c.1.24 d.1.27 30-2.A company has a minimum required rate of return of 8%.It is considering investing in a preojcet that costs$91,116 and is expected to generate cash inflows of 36,000 each year for three years.The approximate internal rate of return on this project is a.8% b.9% c.10% d.less than the required 8% 33.Dino Company reported net income of 72,000 for the year.During the year, accounts receivable increased by7,000, accounts payable decreased by 3,000 and depreciation expense of 5,000 was recorded.Net cash porvided by operating activities for the year is a.67,000 b.87,000 c.71,000 d.72,000 34.Fare Company reported a net loss of 31,000 for the year ended Dec.31,2013.During the year,accounts receivable decreased 15,000, merchandiseinventory increased 24,000,accounts payable increased by 30,000, and depreciation expense of 15,000 was recorded.During 2013,operating activities a.used net cash of 5,000 b.used net cash of 23,000 c.provided net cash of5,000 d.provided net cash of 23,000 35.Using the indirect method,patent amortization expense for the period a.is deducted from net income b.causes cash to increase c.cuases cash to decrease d.is added to net income 36.In developing the cash flows from operating activities,most companies in the U.S a.use the direct method b.use the indirect method c.present both the indirect and direct methods in their financial reports d.prepare the operating activities section on the accrual basis 37.Each of the following is added to net income in computing net cash provided by operating activities except a.amortization expense b.an increase in accrued expeneses payable c.a gain on sale of equipment d.a decrease in inventory 38.Which of the following would be subtracted from net income using the indirect method? a.Depreciation expense b.An increase in accounts receivable c.An increase in accounts payable d.A decrease in prepaid expenses 39.Which of the following would be added to net income using the indirect method? a.An increase in accounts receivable b.An increase in prepaid expenses c.Depreciation expense d.A decrease in accounts payable 40.which of the following whould not be an adjustment to net income using the indirect method? a.Depreciation expense b.An increase in prepaid Insurance c.Amortization expense d.an increase in land 41.In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as a(n) a.subtraction from net income b.addition to net income c.addition to cash flow from investing activities d.subtraction from cash flow from investing activities 42.The following information pertains to Eura Company. Assets Cash and short-term investments ()for Q.42-1->(40,000) Q.42.2->40,000 Accounts receivable(net)(30,000) 30,000 Inventory (45,000) 25,000 Property,plant and equipment (215,000) 215,000 Total (330,000) 310,000 Liabilities and Stockholders' Equity Current liabilities (60,000) 60,000 Long-term liabilities (75,000) 75,000 Stockholders equity-common (195,000) 175,000 Total Liabilities and Stockholder's Equity (330,000) 310,000 Income Statement Sales (90,000) 90,000 Cost of goods sold (45,000) 45,000 Gross profit (45,000) 45,000 Operating expenses (30,000) 25,000 Net income (15,000) 20,000 Number of shares of common stock (5,000) 5,000 Market price of common stock (22) 22 Dividends per share (1.00) 1.00 42-1.What is the return on common stockholders' equity for Eura? a.4.8% b.7.7 c.23.1 d.46.2 42-2.What is the price-earnings ratio for Eura? a.5times b.4.0 c.7.3
Question_CHAP10_10Dec Question_CHAP10_10Dec Question 1. Under the equity method of accounting for investments, an investor recognizes its share of the earnings in the period in which the a. Investor sells the investment b. Investee declares a dividend c. Investee pays a dividend d. Earnings are reported by the investee in its financial statements 2. Pence Corporation, which accounts for its investments in the common stock of Walsh Company by the equity method, should ordinarily record a dividend received from Walsh as a. An addition to the carrying value of the investment b. Dividend revenue c. A reduction of the carrying value of the investment d. Revenue from affiliate 3. On January 15, 2002, a corporation was granted a patent on a product. On January 2, 2010, to protect its patent, the corporation purchased a patent on a competing product the originally was issued on January 10, 2008. Because of its unique plant, the corporation does not feel the competing patent can be used in producing a product. The cost of the competing patent should be a. Amortized over a maximum period of 17 years b. Amortized over a maximum period of 13 years c. Amortized over a maximum period of 9 years d. Expensed in 2010 4. Pacer Company purchased 300 of the 1, 000 outstanding shares of Queen Company’s common stock for $80,000 on January 2, 2008. During 2009, Queen Company declared dividends of $8,000 and reported earnings for the year of $20,000. If Pacer Company uses the equity method of accounting for its investment in Queen Company, its Investment in Queen Company account at December 31, 2009 should be a. $100, 000 b. $88,000 c. $83,600 d. $80,000 5. Refer to the facts in problem (4). If Pacer Company uses the lower of cost or market method of accounting for its investment in Queen Company, and the value of its investment hasn’t changed, its Investment in Queen Company account on December 31, 2009, should be a. $100, 000 b. $88,000 c. $80,000 d. $73,600 6. A large, publicly held company developed and registered a trademark during 2010. The cost of developing and registering the trademark should be accounted for by a. Charging it to an asset account that should not be amortized b. Expensing it as incurred c. Amortizing it over 25 years if in accordance with management’s evaluation d. Amortizing it over its useful life or 17 years, whichever is shorter 7. Goodwill should be written off a. As soon as possible against retrained earnings b. When there is evidence that its carrying value has been impaired c. By systematic charges against retained earnings over the period benefited, but not more than 40 years d. By systematic charges to expense over the period benefited, but not more than 40 years 8. A net unrealized loss on a company’s long-term portfolio of available for sale securities should be reflected in the current financial statements as a. An extraordinary item shown as a direct reduction from retained earnings b. A current loss resulting from holding marketable equity securities c. A footnote or parenthetical disclosure only d. A component of other comprehensive income 9. Changes in the fair value of a long-term available for sale equity securities portfolio should be reported as a component of a. Other comprehensive income b. Noncurrent assets c. Noncurrent liabilities d. Net income 10. Cash dividends declared out of current earnings are distributed to an investor. How will the investor’s investment account be affected by those dividends under each of the following accounting methods? Fair Value Method Equity Method a. Decrease No effect b. Decrease Decrease c. No effect Decrease d. No effect No effect 11. An activity that would be expensed currently as research and development costs is the a. Testing in search for or evaluation of product or process alternatives b. Adaptation of an existing capability to a particular requirement or customer’s need as a part of continuing commercial activity c. Legal work in connection with patent applications or litigation, and the sale or licensing of patents d. Engineering follow-through in an early phase of commercial production 12. Should the following fees associated with the registration of an internally developed patent be capitalized? Registration Legal fees fees a. Yes Yes b. Yes No c. No Yes d. No No 13. Which of the following assets acquired in 2010 are amortizable? Goodwill Trademarks a. No No b. No Yes c. Yes No d. Yes No 14. A purchased patent has a remaining life of 15 years. It should be a. Expensed in the year of acquisition b. Amortized over 15 years regardless of its useful life c. Amortized over its useful life if less than 15 years d. Amortized over 40 years 15. Which of the following amounts incurred in connection with a trademark should be capitalized? Cost of a Registration Successful defense fees a. Yes No b. Yes Yes c. No Yes d. No No 16. Zink Company owns 32% of Ace Company's outstanding voting stock. Zink Company normally should account for its investment in Ace Company using the a. Fair value method. b. Cost method. c. Consolidation procedure. d. Equity method. 1. An investor purchased a bond as a long-term investment on January 1. Annual interest was received on December 31. The investor’s interest income for the year would be lowest if the bond was purchased at a. A discount b. A premium c. Par d. Face value 19. The theoretical justification for expensing research and development (R&D) cost as it is incurred is based on which of the following arguments? a. R&D costs provide no future benefits, thus it does not meet the definition of an asset b. R&D costs are incurred to generate current period revenue, thus the matching concept requires that it be expensed as incurred. c. Whether R&D costs that have been incurred will provide future benefit is uncertain, thus it does not meet the definition of an asset. d. Since R&D costs have been incurred during the current period, they meet the definition of an expense. 20. When a patent is successfully defended in court, the cost of the lawsuit a. Should be expensed as incurred because it is a period cost. b. Should be added to the cost of the patent and depreciated over the remaining useful life of the patent. c. Should be added to the cost of the patent which is then expensed as a period cost. d. Has already been expensed so there is no further action to take. 21. Goodwill is an intangible asset a. That has a definite life and its cost should be amortized over its useful life. b. That is recorded when the company has projected earnings in excess of earnings expected for an investment in a similar company in the same industry. c. That is reviewed for impairment when circumstances indicate that impairment may have occurred. d. That is reviewed annually to determine whether impairment has occurred. 22. A trading security is measured at fair value on the balance sheet date and reported as a. A current asset, and changes in fair value are reported in earnings as unrealized gains and losses. b. A current asset, and changes in fair value are reported in earnings as realized gains and losses. c. Either a current or noncurrent asset depending on whether they meet the definition of a current asset. d. A current asset, and changes in fair value are reported in accumulated other comprehensive income as unrealized gains and losses. 23. Current accounting for an available-for-sale (AFS) security is consistent with a. The financial capital maintenance concept of income because AFS security unrealized gains and losses are reported in earnings. b. The financial capital maintenance concept of income because AFS security unrealized gains and losses are reports in other comprehensive income. c. The physical capital maintenance concept of income because AFS security unrealized gains and losses are reported in earnings. d. The physical capital maintenance concept of income because AFS security unrealized gains and losses are reported in other comprehensive income. 24. The physical capital maintenance concept of income would require that an investment in the common stock of another entity be a. Reported in the balance sheet at historical cost and that only realized gains and losses be reported in earnings. b. Reported in the balance sheet at historical cost and that unrealized gains and losses be reported in earnings. c. Reported in the balance sheet at fair value and that unrealized gains and losses be reported in earnings. d. Reported in the balance sheet at fair value and that unrealized gains and losses be reported in other comprehensive income. 25. The economic concept of income would require that an investment in the common stock of another entity be a. Reported in the balance sheet at historical cost and that only realized gains and losses be reported in earnings. b. Reported in the balance sheet at historical cost and that unrealized gains and losses be reported in earnings. c. Reported in the balance sheet at fair value and that unrealized gains and losses be reported in earnings. d. Reported in the balance sheet at fair value and that unrealized gains and losses be reported in other comprehensive income. 26. Under the fair value option, an investment in the common stock of another entity will be a. Reported as a current asset b. Reported as a noncurrent asset c. Reported as either a current or noncurrent asset depending on managerial intent. d. Reported as a current asset only if it was not previously reported as an equity method investment. 27. When a company reports goodwill in its balance sheet, we know that a. It was internally generated because the company has earnings in excess of those of other companies in the industry. b. The company purchased it. c. The company will be reporting amortization expense for the goodwill. d. The company will not be reporting an impairment loss for the goodwill. Essay 1. How are income and balance sheet values determined under the equity method? 2. Discuss accounting for equity securities under the cost method. 3. Discuss accounting for equity securities under the SFAS No. 115 now contained at FASB ASC 320. 4. Summarize the accounting requirements for investments in equity securities. That is, what methods are available and when is each method appropriate? 5. Discuss the use of the fair value option originally described in SFAS No. 159 now contained at FASB ASC 825-10. 6. Discuss accounting for investments in debt securities. 7. What is an intangible asset? How is the cost of an intangible asset amortized? . 8. What is goodwill? How is goodwill written off under the provisions of SFAS No. 142 now FASB ASC 350? 9. Define research and development. How are research and development costs recorded 10. How does IAS No 39 define fair value?
accounts data bank accounts data bank Question 61. Use the appropriate factors from Table 6-4 or Table 6-5 to answer the following questions. (a.) What is the present value of $90,000 to be received in six years using a discount rate of 12%? (b.) How much should be invested today at a return on investment of 16% compounded annually to have $150,000 in eleven years? 62. Use the appropriate factors from Table 6-2 or Table 6-3 to answer the following questions. (a.) Vincent Co.'s common stock is expected to have a dividend of $7 per share for each of the next five years, and it is estimated that the market value per share will be $65 at the end of five years. If an investor requires a return on investment of 14%, what is the maximum price the investor would be willing to pay for a share of Vincent Co. common stock today? (b.) Aliyana bought a bond with a face amount of $1,000, a stated interest rate of 14%, and a maturity date 20 years in the future for $990. The bond pays interest on a semi-annual basis. Eight years have gone by and the market interest rate is now 12%. What is the market value of the bond today? 63. The following data have been collected by capital budgeting analysts at Condel Brothers Oil Co. concerning the drilling and production of known reserves at an off-shore location: (a.) Calculate the net present value of the proposed investment in the drilling and production operation. Ignore income taxes, and round answers to the nearest $1. (b.) What will the internal rate of return on this investment be relative to the cost of capital (higher, lower, or the same)? Explain your answer. 64. Macy Co. is considering the investment of $86,000 in a new machine. The machine will generate cash flow of $18,500 per year for each year of its six-year life and will have a salvage value of $5,000 at the end of its life. Macy Co.'s cost of capital is 10 percent. (a.) Calculate the net present value of the proposed investment. Ignore income taxes, and round all answers to the nearest $1. (b.) What will the internal rate of return on this investment be relative to the cost of capital (higher, lower, or the same)? Explain your answer. 65. The following data have been collected by capital budgeting analysts at Erica, Inc. concerning a new product line currently under consideration by management: (a.) Calculate the net present value of the proposed investment in the new product line. Ignore income taxes, and round all answers to the nearest $1. (b.) What will the internal rate of return on this investment be relative to the cost of capital (higher, lower, or the same)? Explain your answer. 66. Delta, Inc. is considering the investment of $75,000 in a new machine. The machine will generate cash flow of $16,800 per year for each year of its seven-year life and will have a salvage value of $12,000 at the end of its life. Delta Inc.'s cost of capital is 14% percent. (a.) Calculate the net present value of the proposed investment. Ignore income taxes, and round all answers to the nearest $1. (b.) What will the internal rate of return on this investment be relative to the cost of capital (higher, lower, or the same)? Explain your answer. 67. Lynn Co. is considering the investment of $90,000 in a new machine. The machine will generate cash flow of $10,000 per year for each year of its 15 year life and will have a salvage value of $5,000 at the end of its life. Lynn Co.'s cost of capital is 8%. (a.) Calculate the net present value of the proposed investment. Ignore income taxes, and round all answers to the nearest $1. (b.) Calculate the present value ratio of the investment. (c.) What will the internal rate of return on this investment be relative to the cost of capital (higher, lower, or the same)? Explain your answer. (d.) Calculate the payback period of the investment. 68. The following data have been collected by capital budgeting analysts at Halda, Inc. concerning an investment in an expansion of the company's product line. Analysts estimate that an investment of $210,000 will be required to initiate the project at the beginning of 2010. Estimated cash returns from the new product line are summarized in the following table; assume that the returns will be received in a lump sum at the end of each year. The new product line will also require an investment in working capital of $30,000; this investment will become available for other purposes at the end of the project. Salvage value of machinery and equipment at the end of the product line's life is expected to be $20,000. The cost of capital used in Hilda, Inc.'s capital budgeting analysis is 10%. (a.) Calculate the net present value of the proposed investment. Ignore income taxes, and round all answers to the nearest $1. (b.) Calculate the present value ratio of the investment. (c.) What will the internal rate of return on this investment be relative to the cost of capital (higher, lower, or the same)? Explain your answer. (d.) Calculate the payback period of the investment. 69. Digital Devices, Inc. has received a special order to manufacture 10,000 CD ROM drives for an Italian computer manufacturer. Digital determines that the order will not affect its current domestic sales of CD ROM drives and because of the special nature of the order no sales commission would be paid. However, to process the order for export, an additional handling cost of $10 per unit is estimated. The order indicates that the price of the drives cannot exceed $200. The company has the capacity to produce 100,000 units annually but is currently operating at 75% of available capacity. Unit selling price and costs, based on estimated actual capacity being utilized, are as follows: (a.) Prepare a relevant cost analysis showing the effect on profit if the company accepts the special order. (b.) How would your analysis change if Digital Devices, Inc., was producing and selling 100,000 units annually? 70. SOFT Micro Co., sells part #1973 for $240 per unit and the standard cost of producing each unit of part #1973 is determined as follows: SOFT received a special order for 1,000 units of part #1973. The only additional cost to SOFT is a special packaging requirement that would cost $10 per unit. (a.) If SOFT were currently able to sell all of its production of part #1973, what would be the minimum sales price that SOFT should consider for this special order? (b.) Assume that SOFT has enough idle capacity to produce 1,000 units of part #1973. If SOFT wants to increase its operating profit by $110,000, what price per unit would SOFT charge for the special order?