Monday, 14 May 2018

Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis


Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 570,000 $ 396,000 $ 90,000 $ 36,000 $ 18,000 $ 30,000 Percent uncollectible 1 % 2 % 5 % 7 % 10 % a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method.

Daley Company estimates uncollectible accounts using the allowance method at December 31


Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 570,000 $ 396,000 $ 90,000 $ 36,000 $ 18,000 $ 30,000 Percent uncollectible 1 % 2 % 5 % 7 % 10 % a. On February 1 of the next period, the company determined that $6,800 in customer accounts is uncollectible; specifically, $900 for Oakley Co. and $5,900 for Brookes Co. Prepare the journal entry to write off those accounts. b. On June 5 of that next period, the company unexpectedly received a $900 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries necessary to reinstate the account and to record the cash received.

Following are the selected transactions of Danica Company for 2015 and 2016


Following are the selected transactions of Danica Company for 2015 and 2016. 2015 Dec. 13 Accepted a $9,500, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable. 31 Prepared an adjusting entry to record the accrued interest on the Lee note. 2016 Jan. 27 Received Lee’s payment for principal and interest on the note dated December 13. Mar. 3 Accepted a $5,000, 10%, 90-day note dated March 3 in granting a time extension on the past-due account receivable of Tomas Company. 17 Accepted a $2,000, 30-day, 9% note dated March 17 in granting H. Cheng a time extension on his past-due account receivable. Apr. 16 H. Cheng dishonors his note when presented for payment. May 1 Wrote off the H. Cheng account against the Allowance for Doubtful Accounts. June 1 Received the Tomas payment for principal and interest on the note dated March 3.

At December 31, 2016, Hawke Company reports the following results for its calendar year


At December 31, 2016, Hawke Company reports the following results for its calendar year. Cash sales $ 1,390,980 Credit sales 3,115,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 943,845 debit Allowance for doubtful accounts 20,180 debit

Friday, 11 May 2018

Wednesday, 14 March 2018

In many developing economies, technology is increasingly being used to replace manual labor. This leads to which type of economic growth


In many developing economies, technology is increasingly being used to replace manual labor. This leads to which type of economic growth? None of the answers provided is the correct. description for this type of economic growth. Innovation-driven economic development Factor-driven economic development Efficiency-driven economic development Opportunity-driven entrepreneurship

When acquiring an existing business, which of the following is NOT a good idea?


When acquiring an existing business, which of the following is NOT a good idea? Get answers to all key questions – particularly about the firm’s finances – in writing. Remember that there are always other businesses for sale. Talk to employees, suppliers and customers about their commitment to supporting the business after the acquisition. Arrange for the seller to exit the business as soon as possible after the deal closes to avoid any conflicts about who is now in charge. Reconstruct financials to understand how much cash the business will generate when separated from the seller’s personal finances.

The __________________ approach to evaluating a proposed new venture (or potential acquisition) involves constructing a checklist


The __________________ approach to evaluating a proposed new venture (or potential acquisition) involves constructing a checklist ahead of time that identifies a variety of critical issues. This checklist can be applied to each potential venture. Comprehensive Feasibility Feasibility Criteria Break-even Analysis Business Plan Profile Analysis

Which of the following statements related to Creativity is false? One technique for improving creativity is to try to view things as existing in an appositional


Which of the following statements related to Creativity is false? One technique for improving creativity is to try to view things as existing in an appositional (side-by-side; close; similar) relationship. Creativity can be improved by becoming aware of the mental blocks that stifle it. You can stimulate creativity thinking by adopting a functional perspective when looking at things and people. The steps in the creative process – knowledge accumulation, incubation, ideation, and evaluation/implementation – always occur in the listed sequence. Incubation in the creative process often occurs when the individual is doing something completely unrelated to the subject or problem.

Which of the following includes a measure from each element of the Triple Bottom Line


Which of the following includes a measure from each element of the Triple Bottom Line? Health-adjusted life expectancy; unemployment rate; solid waste management Personal wealth; solid waste management; unemployment rate All of the provided answers include all three elements of the Triple Bottom Line. Cost of underemployment; job growth; median household income Electricity consumption; relative poverty rates; violent crimes per capita

Individuals will sometimes attempt to justify behaving unethically by reasoning that the action is in the firm's best interest


Individuals will sometimes attempt to justify behaving unethically by reasoning that the action is in the firm's best interest and that if it ever becomes known, the firm will condone it because the firm has benefited from the unethical act. Which of the following would be an example of this type of “role distortion” morally questionable act? Bribery Giving a poorly performing employee a glowing recommendation so that they can transfer to another department Embezzlement Not confronting expense account cheating All of the other potential answers fit the definition of "role-distortion" ethical failures.

Tuesday, 13 March 2018

Which of the following Corporate Entrepreneurship initiatives is most likely to take advantage of technological knowledge generated outside the


Which of the following Corporate Entrepreneurship initiatives is most likely to take advantage of technological knowledge generated outside the firm to generate a new business in an emerging industry? Corporate venturing Business model reconstruction Strategic renewal Organizational rejuvenation Domain redefinition

The process approach to entrepreneurship seeks to ... explain the process of obtaining venture capital


The process approach to entrepreneurship seeks to ... explain the process of obtaining venture capital. explain why and how an individual chooses to pursue an opportunity. explain intrapreneurship. explain why entrepreneurs drink so much. explain the process of obtaining patents.

Which of the following is NOT true of Corporate Entrepreneurship? It contributes to more start-up activities by former employees


Which of the following is NOT true of Corporate Entrepreneurship? It contributes to more start-up activities by former employees (those who have left the firm to start their own ventures). Actually, all of the other answers are true of Corporate Entrepreneurship. It helps a firm attract high-performing employees. It helps a firm expand and grow. It helps a firm avoid obsolescence.

Which of the following is NOT a potential source of stress for the entrepreneur attempting to launch a new venture


Which of the following is NOT a potential source of stress for the entrepreneur attempting to launch a new venture? Immersion in the business The restoration orientation Failure of the entrepreneur to meet their own performance expectations Loneliness due to social isolation Frustration arising from the performance shortcomings of others

When entrepreneurs believe that their accomplishments and setbacks are within their own control and influence, they are exhibiting


When entrepreneurs believe that their accomplishments and setbacks are within their own control and influence, they are exhibiting opportunity orientation. external locus of control. persistent problem-solving. internal locus of control.

Which of the following is a false statement about entrepreneurs? They burn with the competitive desire to excel. They are achievers


Which of the following is a false statement about entrepreneurs? They burn with the competitive desire to excel. They are achievers. They see the cup half full rather than half empty. They do not use failure as a tool for learning.

A clear pattern among successful entrepreneurs is the fear of failure common to all people. their focus on opportunity rather than resources


A clear pattern among successful entrepreneurs is the fear of failure common to all people. their focus on opportunity rather than resources. setting goals that are just out of reach. not fitting in to traditional organizations.

Which of the "Characteristics Often Attributed to Entrepreneurs" listed below is most closely aligned with (or most similar to) one of the "Big 5"


Which of the "Characteristics Often Attributed to Entrepreneurs" listed below is most closely aligned with (or most similar to) one of the "Big 5" personality traits? Responsibility Sense of Power Foresight Confidence Initiative

Which of the following is NOT a characteristic behavior associated with successful entrepreneurs?


Which of the following is NOT a characteristic behavior associated with successful entrepreneurs? Resourcefulness Independence Passion Procrastination Vision

Which of the following would be considered to be a factor in the Micro View of entrepreneurship that attempts


Which of the following would be considered to be a factor in the Micro View of entrepreneurship that attempts to explain why entrepreneurial firms are launched and/or why the will be successful? Consumer preferences Availability of venture capital Employment opportunities available to populations of recent immigrants The mindset or characteristic behaviors of the entrepreneur All of the factors listed in the other answer choices would be considered to be part of the Micro View.

Wednesday, 7 March 2018

You purchase an antique car today for $28,000. You expect the price of the car to rise by 7% per


You purchase an antique car today for $28,000. You expect the price of the car to rise by 7% per year for the next 5 years. What do you expect the price of the car to be in year 5?

The current cost of graduate school tuition is $18,000 per year. The cost of tuition is rising at 3.00% per year


The current cost of graduate school tuition is $18,000 per year. The cost of tuition is rising at 3.00% per year. You plan to attend graduate school for 2 years starting 3 years from now. How much do you have to invest today if your savings account earns 6.00% APR compounded annually to just fund your tuition?

You can lease a car for 5 years by paying $5,000 today and then making lease payments of $350 per month


You can lease a car for 5 years by paying $5,000 today and then making lease payments of $350 per month (starting next month) for 5 years. Or you can buy the car now for $30,000 and then in 5 years sell the car for $18,000 Either way you have use of the car for 5 years. If your investments earn 5.00% APR (compounded monthly) which alternative is cheaper and by how much in present value terms?

You can purchase an appliance (refrigerator, furnaces, A/C, etc.) maintenance contract. You can pay $1,000 today for a year


You can purchase an appliance (refrigerator, furnaces, A/C, etc.) maintenance contract. You can pay $1,000 today for a year's maintenance coverage or pay $90 per month, each month, starting today, for 12 months. If your investments earn 5.00% APR (compounded monthly), how much would you save or would it cost you (in present value terms) to pay on a monthly basis?

You plan on going on a 3 month vacation 8 months from now. You can pay $4,500 per month during the vacation


You plan on going on a 3 month vacation 8 months from now. You can pay $4,500 per month during the vacation, or you can pay $13,000 today. Which alternative should you take and how much does it save you in present value term if your investments earn 3.00% APR (compounded monthly)?

Tuesday, 6 March 2018

You’ve just won the lottery which promises to pay you $5,000 per month for the next 30 years, starting in one month


You’ve just won the lottery which promises to pay you $5,000 per month for the next 30 years, starting in one month. The lottery company is require to buy US Treasury securities to guarantee that it can meet its obligation to you. If Treasury securities earned 5% APR compounded monthly, how much would the lottery company have to invest today to cover its obligation?

You need to make a tuition payment of $6,000 in 6 months. If your investment account pays 3% APR


You need to make a tuition payment of $6,000 in 6 months. If your investment account pays 3% APR, compounded monthly, how much do you have to deposit today to have just enough to pay the tuition in 6 months?

Your sending your daughter to a prestigious private college starting next year. She will attend for four


Your sending your daughter to a prestigious private college starting next year. She will attend for four years. The current cost for one year is $60,000, but is expected to rise 2% per year over the next 10 years. The school has a “tuition stabilization” plan whereby you can pay for the entire four years by writing a single check for $240,000 when your daughter begins college. Otherwise, you simply pay each year’s tuition as you go. If your investments earn 6% per year, what is the difference in present value terms between the two plans?

You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR


You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly), how much do you have to invest today such that your investment will grow to just cover your property tax bill?

You plan on attending graduate school for 2 years starting 5 years from now. Each year of graduate school will cost you $25,000


You plan on attending graduate school for 2 years starting 5 years from now. Each year of graduate school will cost you $25,000. You begin saving for graduate school starting 2 years from now and save for 3 years. How much must you invest each year, starting two years from now, for 3 years such that your investment will grow to just cover the cost of graduate school? Your investments earn 4% APR (compounded annually).

You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly)


You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly), how much do you have to invest each month, starting next month, for 3 months, such that your investment will grow to just cover your property tax bill?

Your annual bonus this year was $15,000. You decide to use the money to remodel your bathroom or install solar panels on your


Your annual bonus this year was $15,000. You decide to use the money to remodel your bathroom or install solar panels on your roof. In either case, you will spend the entire $15,000. If you install solar panels, you will save $100 per month on your electric bill, each month, for 120 months, starting next month. If you remodel your bathroom, you expect to increase the value of the house by $9,000 today. If your investments earn 4% APR (compounded monthly), which alternative adds more to (or subtracts less from) your wealth in present value terms and by how much?

During your retirement you will need $4,000 per month, each month, for 300 months. You plan on retiring 60 months


During your retirement you will need $4,000 per month, each month, for 300 months. You plan on retiring 60 months from today. If your investments earn 6% APR (compounded monthly), must you invest each month, starting next month, for 12months to fully fund your retirement?

If you earn 2% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $400 due in 3 years?


If you earn 2% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $400 due in 3 years?

You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly), how much


You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly), how much do you have to invest today such that your investment will grow to just cover your property tax bill?

You earn 8% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $1,000 due in 4 years?


You earn 8% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $1,000 due in 4 years?

How much would you have to invest today to fund three equal payments in years 1, 2 and 3 of $100 each if the interest rate is 3% APR (compounded annually)?


How much would you have to invest today to fund three equal payments in years 1, 2 and 3 of $100 each if the interest rate is 3% APR (compounded annually)?

You are managing a trust fund that must pay its owner $3,500 each month, for 120 months


You are managing a trust fund that must pay its owner $3,500 each month, for 120 months, (starting next month). How much do you need to invest today to make the trust fund payments if your investments earn 3.00% APR (compounded monthly)?

You need $575 in 6 months for your auto insurance bill. If your investments earn 3% APR


You need $575 in 6 months for your auto insurance bill. If your investments earn 3% APR (compounded monthly), ), how much do you have to invest each month, starting next month, for 4 months, such that your investment will grow to just cover your auto insurance bill?

Your child is planning attend summer camp for three months, starting 7 months from now


Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month, each month, for the three months she will attend. If your investments earn 5% APR (compounded monthly), how much must you invest each month, starting two months from now, for 3 months such that your investment will grow to just cover the cost of the camp?

During your retirement you will need $4,000 per month, each month, for 300 months. You plan on retiring 60 months


During your retirement you will need $4,000 per month, each month, for 300 months. You plan on retiring 60 months from today. If your investments earn 6% APR (compounded monthly), must you invest each month, starting next month, for 12 months to fully fund your retirement?

The required return can be affected by changes in the risk free rate, even if the risk premium remains constant. True False


The required return can be affected by changes in the risk free rate, even if the risk premium remains constant. True False

An action on the part of a firm that increases the level of expected cash flows without a corresponding increase


An action on the part of a firm that increases the level of expected cash flows without a corresponding increase in risk should reduce share value; an action that reduces the level of expected cash flows without a corresponding decline in risk should increase share value. True False

The free cash flow valuation model can be used to determine the value of an entire company as the present value


The free cash flow valuation model can be used to determine the value of an entire company as the present value of its expected free cash flows discounted at the firm's weighted average cost of capital. True False

The constant growth model is an approach to dividend valuation that assumes that dividends grow at a constant rate indefinitely. True False


The constant growth model is an approach to dividend valuation that assumes that dividends grow at a constant rate indefinitely. True False

Investors purchase a stock when they believe that it is undervalued and sell when they feel that it is overvalued. True False


Investors purchase a stock when they believe that it is undervalued and sell when they feel that it is overvalued. True False

A prospectus is a portion of the security registration statement that describes the key aspects of the issue


A prospectus is a portion of the security registration statement that describes the key aspects of the issue, the issuer, and its management and financial position. True False

Preemptive rights allow common stockholders to maintain their proportionate ownership in the corporation when new issues are issued. True False


Preemptive rights allow common stockholders to maintain their proportionate ownership in the corporation when new issues are issued. True False

The market value of common stock is related to its par value because both are sensitive to the reactions of investors to new information. True False


The market value of common stock is related to its par value because both are sensitive to the reactions of investors to new information. True False

Preferred stockholders are often referred to as residual claimants. True False


Preferred stockholders are often referred to as residual claimants. True False

Interest paid to bondholders is tax deductible. True False


Interest paid to bondholders is tax deductible. True False

If a bond's required return always equals its coupon interest rate, the bond's value will remain at par until it matures. True False


If a bond's required return always equals its coupon interest rate, the bond's value will remain at par until it matures. True False

When the required return is different from the coupon interest rate and is constant until maturity, the value of the bond will approach its par value as it nears maturity. True False


When the required return is different from the coupon interest rate and is constant until maturity, the value of the bond will approach its par value as it nears maturity. True False

The value of an asset is determined by discounting the expected cash flows back to its present value, using an appropriate discount rate. True False


The value of an asset is determined by discounting the expected cash flows back to its present value, using an appropriate discount rate. True False

Valuation is the process that links risk and return to determine the worth of an asset. True False


Valuation is the process that links risk and return to determine the worth of an asset. True False

As an outstanding bond approaches maturity, the price of the bond will always trend toward par value until, at maturity


As an outstanding bond approaches maturity, the price of the bond will always trend toward par value until, at maturity, the bond is worth its face value. True False

A Eurobond bond is a bond denominated in Euros. True False


A Eurobond bond is a bond denominated in Euros. True False

The lower a bond's default risk, the higher is the interest rate. True False


The lower a bond's default risk, the higher is the interest rate. True False

Coupon interest rate on a bond represents the percentage of the bond's par value that will be paid annually, typically in two equal semiannual payments, as interest


Coupon interest rate on a bond represents the percentage of the bond's par value that will be paid annually, typically in two equal semiannual payments, as interest. True False

The reason for a difference in the yield between a Aaa corporate bond and an otherwise identical Baa bond is the risk premium; other things being equal. True False


The reason for a difference in the yield between a Aaa corporate bond and an otherwise identical Baa bond is the risk premium; other things being equal. True False

An interest rate or a required rate of return represents the cost of money. True False


An interest rate or a required rate of return represents the cost of money. True False

Monday, 5 March 2018

When computing the number of deposits needed to accumulate a future sum, it will take longer


When computing the number of deposits needed to accumulate a future sum, it will take longer if the interest rates are higher, holding the future value and deposit size constant. True False

In general, with an amortized loan, the payment amount grows over the life of the loan


In general, with an amortized loan, the payment amount grows over the life of the loan, the principal portion of each payment grows over the life of the loan, and the interest portion declines over the life of the loan. True False

The nominal and effective rates are equivalent for annual compounding. True False


The nominal and effective rates are equivalent for annual compounding. True False

$100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received


$100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is $1,245. True False

An annuity due is an equal stream of cash flows is paid or received at the beginning of each period. True False


An annuity due is an equal stream of cash flows is paid or received at the beginning of each period. True False

An ordinary annuity is an annuity in which cash flows occur at the beginning of each period. True False


An ordinary annuity is an annuity in which cash flows occur at the beginning of each period. True False

Glen’s Cookies (GC) produces a variety of baked goods that it sells to grocery stores (the grocery channel) or to food service providers


Glen’s Cookies (GC) produces a variety of baked goods that it sells to grocery stores (the grocery channel) or to food service providers (the food service channel). GC is trying to analyze the profitability of its cookie line of products. GC charges the same prices and provides the same promotions to its customers, whether the customer was in the grocery store channel or the food service channel. GC has recently studied the food service channel and has discovered that this channel can be further refined into specialty cookie shops and industrial providers (cafeterias, hospitals, etc.). GC noticed that sales dollars for its products were relatively constant, but that profits were declining. The company sensed that specialty cookie shops might be more profitable than industrial providers, but really didn’t know.

Future value is the value of a future amount at the present time, found by applying compound interest over a specified period of time


Future value is the value of a future amount at the present time, found by applying compound interest over a specified period of time. True False

Time value of money is based on the belief that a dollar that will be received at some future date is worth more than a dollar today


Time value of money is based on the belief that a dollar that will be received at some future date is worth more than a dollar today. True False

Sunday, 4 March 2018

A weakness of the percent-of-sales method of preparing a pro forma income statement is the assumption that the firm's past financial


A weakness of the percent-of-sales method of preparing a pro forma income statement is the assumption that the firm's past financial condition is an accurate predictor of its future True False

In the development of pro forma statements, a firm that requires external funds means that its


In the development of pro forma statements, a firm that requires external funds means that its projected level of cash is in excess of its needs and that funds would therefore be available for repaying debt, repurchasing stock, or increasing the dividend to stockholders. True False

Since the percentage-of-sales method assumes that all the form's costs and expenses are variable, it tends to understate


Since the percentage-of-sales method assumes that all the form's costs and expenses are variable, it tends to understate profits when sales are increasing and overstate profits when sales are decreasing. True False

In cash budgeting, the impact of depreciation is reflected in a reduction in tax payments. True False


In cash budgeting, the impact of depreciation is reflected in a reduction in tax payments. True False

The sales forecast and various forms of operating and financial data are the key outputs of the short-run (operating) financial planning


The sales forecast and various forms of operating and financial data are the key outputs of the short-run (operating) financial planning. True False

Strategic financial plans are planned long-term financial actions and the anticipated financial impact of those actions. True False


Strategic financial plans are planned long-term financial actions and the anticipated financial impact of those actions. True False

The statement of cash flows allows the financial manager and other interested parties to analyze a firm's past


The statement of cash flows allows the financial manager and other interested parties to analyze a firm's past and possibly future profitability. True False

In the statement of cash flows, the cash flows from financing activities result from debt and equity financing transactions


In the statement of cash flows, the cash flows from financing activities result from debt and equity financing transactions; including incurrence and repayment of debt, cash inflow from the sale of stock, and cash outflows to repurchase stock or pay cash dividends. True False

Given a financial manager's preference for faster receipt of cash flows, a longer depreciable life is preferred to a shorter one. True False


Given a financial manager's preference for faster receipt of cash flows, a longer depreciable life is preferred to a shorter one. True False

Depreciation deductions, like any other business expenses, reduce the income that a firm reports on its income statement. True False


Depreciation deductions, like any other business expenses, reduce the income that a firm reports on its income statement. True False

The DuPont formula allows a firm to break down its return into the net profit margin, which measures the firm's profitability


The DuPont formula allows a firm to break down its return into the net profit margin, which measures the firm's profitability on sales, and its total asset turnover, which indicates how efficiently the firm has used its assets to generate sales. True False

The financial leverage multiplier is the ratio of the firm's total assets to stockholders' equity. True False


The financial leverage multiplier is the ratio of the firm's total assets to stockholders' equity. True False

Return on total assets (ROA) measures the overall effectiveness of management in generating profits with its available assets. True False


Return on total assets (ROA) measures the overall effectiveness of management in generating profits with its available assets. True False

Gross profit margin measures the percentage of each sales dollar left after a firm has paid for its goods and operating expenses. True False


Gross profit margin measures the percentage of each sales dollar left after a firm has paid for its goods and operating expenses. True False

Higher the debt ratio, more the financial leverage a firm has and thus, the greater will be its risk and return. True False


Higher the debt ratio, more the financial leverage a firm has and thus, the greater will be its risk and return. True False

Total asset turnover commonly measures the liquidity of a firm's total assets. True False


Total asset turnover commonly measures the liquidity of a firm's total assets. True False

In ratio analysis, the financial statements being used for comparison should be dated at the same point in time during the year


In ratio analysis, the financial statements being used for comparison should be dated at the same point in time during the year. If not, the effect of seasonality may produce erroneous conclusions and decisions. True False

The income statement is a financial summary of a firm's operating results during a specified period while the balance sheet is a summary statement


The income statement is a financial summary of a firm's operating results during a specified period while the balance sheet is a summary statement of a firm's financial position at a given point in time. True False

GAAP is the accounting profession's rule-setting body. True False


GAAP is the accounting profession's rule-setting body. True False

Saturday, 3 March 2018

The average tax rate paid on the firm's ordinary income can be calculated by dividing its taxes by its taxable income. True False


The average tax rate paid on the firm's ordinary income can be calculated by dividing its taxes by its taxable income. True False

The marginal tax rate represents the rate at which the next dollar of income is taxed. True False


The marginal tax rate represents the rate at which the next dollar of income is taxed. True False

The Securities Exchange Act of 1934 regulates the secondary market. True False


The Securities Exchange Act of 1934 regulates the secondary market. True False

Mortgage-backed securities are securities that represent claims on the cash flows generated by a pool of mortgages


Mortgage-backed securities are securities that represent claims on the cash flows generated by a pool of mortgages True False

Thursday, 1 March 2018

How much would you have to deposit in your savings account today in order to be able to withdraw $1412 each year for two years


How much would you have to deposit in your savings account today in order to be able to withdraw $1412 each year for two years, starting six years from now? Your savings account earns 4.26% compounded annually.

How much would you have to invest today to have $10,000 in 6 months if your investments earn 5.00% APR (compounded monthly)


How much would you have to invest today to have $10,000 in 6 months if your investments earn 5.00% APR (compounded monthly)

You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR


You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly), how much do you have to invest each month, starting next month, for 3 months, such that your investment will grow to just cover your property tax bill?

Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month


Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month, each month, for the three months she will attend. If your investments earn 5% APR (compounded monthly), how much must you invest each month, starting two months from now, for 3 months such that your investment will grow to just cover the cost of the camp?

How much would you have to deposit today in a bank account that pays 2.8% compounded annually to fund 5 yearly payments


How much would you have to deposit today in a bank account that pays 2.8% compounded annually to fund 5 yearly payments of $1871 with the first payment starting a year from now?

If you invest $4758 today in an account that pays 4.3% APR compounded monthly, how much will you have in the account after 43 months?


If you invest $4758 today in an account that pays 4.3% APR compounded monthly, how much will you have in the account after 43 months?

How much would you have to invest today to fund four equal payments in years 1, 2, 3 and 4 of $200 each if the interest rate is 6% APR


How much would you have to invest today to fund four equal payments in years 1, 2, 3 and 4 of $200 each if the interest rate is 6% APR (compounded annually)?

Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month


Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month, each month, for the three months she will attend. If your investments earn 5% APR (compounded monthly), how much must you invest today such that your investment will grow to just cover the cost of the camp?

You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR


You need $5,000 in 6 months for your property tax bill. If your investments earn 4% APR (compounded monthly), how much do you have to invest each month, starting next month, for 3 months, such that your investment will grow to just cover your property tax bill?

Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month


Your child is planning attend summer camp for three months, starting 7 months from now. The cost for camp is $1,000 per month, each month, for the three months she will attend. If your investments earn 5% APR (compounded monthly), how much must you invest each month, starting next month, for 3 months such that your investment will grow to just cover the cost of the camp?

If you deposit $3687 in your savings account each year for 3 years, starting today, how much will you have in your savings account


If you deposit $3687 in your savings account each year for 3 years, starting today, how much will you have in your savings account in 4 years? Your savings account earns 5% compounded annually.

How much would have to invest in years 1, 2 and 3 in order to have $4788 in year 5 if the interest rate is 3%?


How much would have to invest in years 1, 2 and 3 in order to have $4788 in year 5 if the interest rate is 3%?

Wednesday, 28 February 2018

Your child will go to a private school starting in 4 years. The tuition for the school is $33210 per year, for 4 years


Your child will go to a private school starting in 4 years. The tuition for the school is $33210 per year, for 4 years starting in year 4. If the interest rate is 4% compounded annually, how much must you deposit today to just be able to fund the tuition?

Asset A pays $1661 per year, for 10 years, starting in year 1. If the interest rate is 6% compounded annually, what is the price of asset A today?


Asset A pays $1661 per year, for 10 years, starting in year 1. If the interest rate is 6% compounded annually, what is the price of asset A today?

If you earn 6% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $500 due in 3 years?


If you earn 6% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $500 due in 3 years?

You earn 8% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $1,000 due in 4 years?


You earn 8% APR (compounded annually) on your investments, how much do you have to invest today to “Fund” a payment of $1,000 due in 4 years?

How much would you have to invest in year 1 and year 2 in an account that earns 5% compounded annually so that you would have $16757 in year 8?


How much would you have to invest in year 1 and year 2 in an account that earns 5% compounded annually so that you would have $16757 in year 8?

You get a loan for $12911 today and will pay back the loan as three equal payments in years 1, 2 and 3. If the interest on the loan is 4%, how big is each payment?


You get a loan for $12911 today and will pay back the loan as three equal payments in years 1, 2 and 3. If the interest on the loan is 4%, how big is each payment?

If you invest $1016 in year 1 and in year 2 in an account that earns 4% compounded annually, how much will you have in 8 years?


If you invest $1016 in year 1 and in year 2 in an account that earns 4% compounded annually, how much will you have in 8 years?

How much would you have to invest today in order to have $10807 in 4 years if you earn 3% on your investments.


How much would you have to invest today in order to have $10807 in 4 years if you earn 3% on your investments.

Why was Miracle chosen to illustrate team building? Illustrate (support your ideas) with information given in your textbook


Why was Miracle chosen to illustrate team building? Illustrate (support your ideas) with information given in your textbook (include page numbers!). Which leadership characteristics were displayed and by whom?

Time Management is one of the most important tools of a successful college student and leaders in general


Time Management is one of the most important tools of a successful college student and leaders in general. You may have heard of Randy Pausch of "The Last Lecture" fame. Before he died, he also gave a lecture about time management. Write at least a one page essay. ESSAY: How could you incorporate Mr. Pausch's advice into your life? What can you do to improve your own time management? What are your impressions of his speech? What does this have to do with leadership?

In “The Allegory of the Cave” Plato’s mainconceptual scheme of the cave is that people see reality as the visible world when reality


In “The Allegory of the Cave” Plato’s mainconceptual scheme of the cave is that people see reality as the visible world when reality really is not the visible world. After reading this selection by Plato, write about the main concept and how you can apply that to your personal leadership.

Qwik Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service


Qwik Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change- related services represent 75% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 25% of its sales and provides a 60% contribution margin ratio. The company's fixed costs are $15,000,000 (that is, $75,000 per service outlet).

Clyde currently commutes 55 miles to work in the city. He is considering a new assignment in the suburbs on the other


Clyde currently commutes 55 miles to work in the city. He is considering a new assignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Determine if Clyde’s move qualifies for a moving expense deduction and calculate the amount (if any) under the following circumstances: (assuming he is employed for 39 of the next 52 weeks). a. Clyde estimates that unless he moves across town, his new commute would be almost 70 miles. He also estimates the costs of a move as follows: Lodging while searching for an apartment $ 126 Transportation — auto (100 miles @ 19 cents/mile, rounded) 19 Mover's fee (furniture and possessions) 1,500 Meals while en route 35 (i) Does Clyde’s move qualify for a moving expense deduction? (ii) Calculate the amount of deduction. b. Clyde estimates that unless he moves across town, his new commute would be almost 115 miles. He also estimates the cost of a move as follows: Lodging while searching for an apartment $ 126 Transportation — auto (100 miles @ 19 cents/mile, rounded) 19 Mover's fee (furniture and possessions) 1,500 Meals while en route 35 (i) Does Clyde’s move qualify for a moving expense deduction? (ii) Calculate the amount of deduction. c. Clyde estimates that unless he moves across town, his new commute would be almost 150 miles. He also estimates the cost of a move as follows: Lodging while searching for an apartment $ 126 Transportation — auto (100 miles @ 19 cents/mile, rounded) 19 Mover's fee (furniture and possessions) 1,950 Meals while en route 35 (i) Does Clyde’s move qualify for a moving expense deduction? (ii) Calculate the amount of deduction.

Larry purchased an annuity from an insurance company that promises to pay him $10,000 per month for the rest of his life


Larry purchased an annuity from an insurance company that promises to pay him $10,000 per month for the rest of his life. Larry paid $1,051,200 for the annuity. Larry is in good health and he is 72 years old. Larry received the first annuity payment of $10,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross income? c. What are the tax consequences if Larry dies just after he receives the 100th payment?

Jimmy has fallen on hard times recently. Last year he borrowed $265,000 and added an additional $86,000 of his own


Jimmy has fallen on hard times recently. Last year he borrowed $265,000 and added an additional $86,000 of his own funds to purchase $351,000 of undeveloped real estate. This year the value of the real estate dropped dramatically, and Jimmy’s lender agreed to reduce the loan amount to $238,300. For each of the following independent situations, indicate the amount Jimmy must include in gross income a. The real estate is worth $178,000 and Jimmy has no other assets or liabilities. b. The real estate is worth $245,700 and Jimmy has no other assets or liabilities. c.The real estate is worth $200,200 and Jimmy has $48,300 in other assets but no other liabilities.

Terry was ill for three months and missed work during this period. During his illness, Terry received $9,100 in sick pay


Terry was ill for three months and missed work during this period. During his illness, Terry received $9,100 in sick pay from a disability insurance policy. What amounts are included in Terry’s gross income under the following independent circumstances? a. Terry has disability insurance provided by his employer as a nontaxable fringe benefit. Terry’s employer paid $6,710 in disability premiums for Terry this year. b. Terry paid $6,710 in premiums for his disability insurance this year. c. Terry’s employer paid the $6,710 in premiums for Terry, but Terry elected to have his employer include the $6,710 as compensation on Terry’s W-2. d. Terry has disability insurance whose cost is shared with his employer. Terry’s employer paid $3,600 in disability premiums for Terry this year as a nontaxable fringe benefit, and Terry paid the remaining $3,110 of premiums from his after-tax salary

Tuesday, 27 February 2018

On Dec 1st of this year, you have been hired as Chief Financial Officer (“CFO”) of a business called Beavers Entertainment Incorporated


On Dec 1st of this year, you have been hired as Chief Financial Officer (“CFO”) of a business called Beavers Entertainment Incorporated (“GoBeavs”). The company plans, organizes, and administers various music festivals, one of which is called Civil War Music Fest (“CWMF”) held at the Reser Stadium. Part of your job as the CFO of the GoBeavsis to record the transactions related to running the festival. You will also be responsible for fixing errors, including unrecorded transactions. The festival will begin Friday, Dec.12thand run through Sunday, Dec.14th. The owner of GoBeavs has contracted with various bands to play at your festival. Among them include Maron5, SOS, KidCudi, Foster the People, and Major Lazer. You will provide a campground adjacent to the main festival as well as other amenities. Items worth noting: - GoBeavs has a 12/31 year-end. - GoBeavs rounds all numbers to the nearest $1. - The General Journal (GJ) is where you will record the journal entry (JE) associated with each individual transaction. Note: not all transactions or events require a JE. - The General Ledger (G/L) is where you post the results of any JE. Each G/L account is in “standard account form” which is a more formal format of a typical T-account. o Note: the headers of the individual G/L accounts do not indicate whether the account is a normal debit or credit balance. Use the information on the trial balance worksheets to determine whether an account has a normal debit or credit balance. - The Adjusting Trial Balance (ATB) and Closing Trail Balance (CTB) reflect the unadjusted, adjusted, and closing balances of each G/L account. You will populate information from the individual G/L accounts into these worksheets which will ultimately help you produce the financial statements for the second phase of the project. - The Financial Statements (F/S) reflect the summary information about GoBeavs. They are prepared using the information from the Adjusted TB. This is part of the second phase of the project. - An example of how to record a JE and post it to the G/L is already in the GJ. - Post JE’s to the G/L at the end of each transaction date to keep the G/L balances updated. - All JEs and G/L postings are to be typed into the document. - You must work through the problems sequentially; do not skip around doing random JEs. Do not “divide-and-conquer”.

This year, Leron and Sheena, married filing jointly, sold their home for $729,000 after all selling


This year, Leron and Sheena, married filing jointly, sold their home for $729,000 after all selling costs. Under the following scenarios, how much taxable gain does the home sale generate for Leron and Sheena? a. Leron and Sheena bought the home three years ago for $135,000 and lived in the home until it sold. b. Leron and Sheena bought the home one year ago for $486,000 and lived in the home until it sold. c. Leron and Sheena bought the home five years ago for $298,000. They lived in the home for three years until they decided to buy a smaller home. Their home has been vacant for the past two years.

Friday, 23 February 2018

As treasurer of Toys B Me, you are considering different investment accounts. Assume you have $200,000


As treasurer of Toys B Me, you are considering different investment accounts. Assume you have $200,000 to invest for three years, which of the following investment accounts is the highest yielding? A. 7.47% compounded daily B. 7.48% compounded monthly C. 7.49% compounded quarterly D. 7.50% compounded semi-annually

The original Barbie doll was introduced in 1972 and sold for approximately $3.00. In year 2015, a mint-condition doll


The original Barbie doll was introduced in 1972 and sold for approximately $3.00. In year 2015, a mint-condition doll in its original box would be listed on EBay at approximately $700.00. What average annual rate of return would the seller realize if she had been the original purchaser of this ‘investment’? A. 13.52% B. 14.95% C. 9.71% D. 19.84% E. 10.47%

You are now 25 years old and just beginning to save for your retirement. If your retirement account will earn 7%


You are now 25 years old and just beginning to save for your retirement. If your retirement account will earn 7% per year with monthly compounding, how much do you need to invest each month so that you can retire at 60 years old with $2million in your retirement account? A. $1110 B. $855 C. $960 D. $1305 E. $1260

You are looking at the car that is currently selling at $55,000. Classic Autos is offering free credit


You are looking at the car that is currently selling at $55,000. Classic Autos is offering free credit (i.e. no interest charged on the borrowed amount) on the car. You pay $10,000 down today and then pay the remaining balance at the end of five years. Premium Motors next door does not offer credit, but will give you $15,000 off the list price if you pay cash now. Which dealership is offering a better deal? Assume annual compounding with 8% discount rate. A. Cannot determine without further info B. Classic autos is offering a better deal C. Premium autos is offering a better deal D. Both dealerships' offer value are same

What would be your account balance at the end of 15 years from now if you invest $15,000 today at an account that earns 15% per year?


What would be your account balance at the end of 15 years from now if you invest $15,000 today at an account that earns 15% per year? A. approx. $245,500 B. approx. $122,056 C. approx. $195,500 D. approx. $145,506 E. approx. $225,056

According to the Rule of 72, how long would it take for $2500 to become $80,000?


According to the Rule of 72, how long would it take for $2500 to become $80,000? A. approx. 40 years at 7.2% interest B. approx. 54 years at 12% interest C. approx. 96 years at 6% interest D. approx. 30 years at 14.4% interest E. approx. 50 years at 7.2% interest

You just received an insurance settlement offer related to an accident you had five years ago


You just received an insurance settlement offer related to an accident you had five years ago. The offer gives you a choice of one of the following three offers: • OPTION A: $2000 per end of each month for 5 years • OPTION B: $1400 per beginning of each month for 7 years • OPTION C: $2300 per end of each month for 4 years If you can earn 8% annual rate with monthly compounding on your investments, which option would you choose? A. Option A is the best choice because it has the highest present value. B. You are indifferent between option A and B as they both have equal values and higher than option C. C. You are indifferent to the three options as they are all equal in value. D. Option C is the best choice because it has the highest present value. E. Option B is the best choice because it has the highest present value.

You just settled an insurance claim. The settlement calls for increasing payments over a seven-year period


You just settled an insurance claim. The settlement calls for increasing payments over a seven-year period. The first payment will be paid one year from now in the amount of $8,000. the following payments will increase by 5% annually. What is the value of this settlement to you today if you can earn 7% on your investments? A. 45,785.85 B. 31,063.79 C. 49,491.43 D. 57,811.54 E. 36,408.28

You are scheduled to receive annual payments of $6500 for each of the next 8 years. The discount rate is 6% with annual compounding


You are scheduled to receive annual payments of $6500 for each of the next 8 years. The discount rate is 6% with annual compounding. What is difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year? A. approx. $2482 B. approx. $1325 C. approx. $2422 D. approx. $2021 E. approx. $3033

Kerry and Rob just had their first child, Helene. Being financially responsible parents, they want to start saving for Helene's college


Kerry and Rob just had their first child, Helene. Being financially responsible parents, they want to start saving for Helene's college education so that they will have $355,000 by the time she is 18. Assuming that they have $10,000 in a bank account that pays 5% interest compounded annually today, how much must they add to the account each year to have $355,000 by the time Helene is 18? A. approx. $16,055 B. approx. $10,221 C. approx. $11,946 D. approx. $11,763 E. approx. $18,254

Glenn Robinson recently signed a contract: receiving 12,500 every MONTH for the following 7 years.


Glenn Robinson recently signed a contract: receiving 12,500 every MONTH for the following 7 years. Then, receive 15,000 per MONTH for 2years following. How much is the contract worth in today's dollars, assuming an annual discount rate of 12%? A. approx. 1.21 million B. approx. 980,224 C. approx. 1.47 million D. approx. 755,872 E. approx. 846,246

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