Acct2 13456789

Topics: Time value of money, Stock, Future value Pages: 11 (2315 words) Published: December 3, 2014
2102 Exam 1
Version A
Summer 2010

Select the best answer.
Do not erase on your scantron (these are marked wrong from trace pencil lead). Ask for a new scantron if you wish to change your answer.
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Name: __________________________________
Lecture Time:
Instructor:________________________
1. In 2008, Miles, Ana and Cindy, who are partners in the MAC Company, had average capital balances of $114,000, $98,000 and $128,000, respectively. The partners share profits and losses by allowing a 12% return on average capital, with any remaining income or loss divided in a ratio of 5:3:2. If the company's income for the current year was $147,600, Cindy’s capital account would increase by:  a. $55,568

b. $44,880
c. $36,720
d. $29,520
2. The total number of shares of stock that a state has approved for issuance to shareholders is referred to as the number of shares:  a. Issued
b. Callable
c. Authorized
d. Outstanding
3. Culley Company wants to invest in a large machine. Their analysis yielded a positive NPV of $47,000. Which of the following statements is not true?  a. Culley should buy the machine.
b. The new equipment will increase net income by $47,000
c. The new equipment is likely to generate a return greater than Culley's cost of capital d. The Culley Company should recover the cost of the new equipment e. All of the statements are true.

4.A problem involving periodic payments cannot be solved using annuity tables if: a.You don't know the amount of the payment.
b.The payments occur after the lump sum.
c.The interest rate is compounded quarterly.
d.The payments occur before the lump sum.
e.The payment amounts are unequal
5.Bill Dunn made an investment on July 1, 2007 which earned $9,000 and a 12% return on July 1, 2008. How much did Bill invest?  a. $60,000
b. $65,000
c. $70,000
d. $75,000
6.Leshonda wins $12,000 in the Georgia Lottery and invests the money in an account that earns 10% interest compounded semiannually. If it grows to $38,700, about how long was the money left in the account? a.6 years

b.10 years
c.12 years
d.20 years
e.24 years

7.If compounding is changed from a semi-annual basis to an annual basis, what happens to future value and present value?

Future Value
Present Value
a.
Decreases
Decreases
b.
Decreases
Increases
c.
Increases
Decreases
d.
Increases
Increases

 
8.On the balance sheet, treasury stock is:
a.shown as an asset.
b.shown as a contra asset.
c.Included as part of retained earnings.
d.Treasury stock is not on the balance sheet
e.Shown as a negative in the stockholders’ equity section.

9.The first year of operation for the Renehan Corporation was 2007. They authorized 5,000,000 shares of $2 par common stock and sold a total of 1,500,000 shares to stockholders. In 2008, Renehan Corporation repurchased 25,000 shares. How many shares are outstanding? a.4,975,000

b.5,025,000
c.1,000,000
d.1,475,000
e. 1,525,000

10. When you issue stock for cash,
a. Assets and equity go up.
b. Assets go up and equity comes down.
c. Assets come down and equity goes up.
d. Liabilities and equity go up.
e. Liabilities go down and equity goes up.

11.After 50 years in business, Tegnelia, Inc. declared a 2-for-1 stock split on January 2, 2009. At the time of the split, Tegnelia, Inc. had 500,000 shares of $1 par common stock outstanding. What is the impact of the split on Tegnelia’s total shareholder equity? a. It will double

b.It will be cut in half
c.There will be no effect
d.It will make them insolvent.
e. Unable to determine from the information given.

12. The Home Depot Board of Directors declares a cash dividend of $.15 per common share of stock on January 2, 2009. The date of record is set at January 10th and the payment date is January 25th. What is the impact to the...
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