1) an accountant wishes to find the present value of an annuity of $1 payable at the
beginning of each period at 10% for eight periods. the accountant has only one present
value table which shows the present value of an annuity of $1 payable at the end of
each period. to compute the present value, the accountant would use the present value
factor in the 10% column for
a.seven periods
b.eight periods and multiply by (1 + .10)
c.eight periods
d.nine periods and multiply by (1 .10)
2) when goods or services are exchanged for cash or claims to cash (receivables),
revenues are
a.earned
b.realized
c.recognized
d.all of these
3) what would you pay for an investment that pays you $3,000,000 after forty years?
assume that the relevant interest rate for this type of investment is 6%.
a.$93,540
b.$935,400
c.$291,660
d.$311,010
4) ferguson company has the following cumulative taxable temporary differences:
the tax rate enacted for 2013 is 40%, while the tax rate enacted for future years is 30%.
taxable income for 2013 is $3,200,000 and there are no permanent differences.
ferguson’s pretax financial income for 2013 is
a.$5,000,000
b.$3,720,000
c.$2,680,000
d.$1,400,000
5) fogel co. has $5,000,000 of 8% convertible bonds outstanding. each $1,000 bond is
convertible into 30 shares of $30 par value common stock. the bonds pay interest on
january 31 and july 31. on july 31, 2012, the holders of $1,600,000 bonds exercised the
conversion privilege. on that date the market price of the bonds was 105 and the market
price of the common stock was $36. the total unamortized bond premium at the date of
conversion was $350,000. fogel should record, as a result of this conversion, a
a.credit of $272,000 to paid-in capital in excess of par
b.credit of $240,000 to paid-in capital in excess of par
c.credit of $112,000 to premium on bonds payable
d.loss of $16,000
6) robust inc. has the following information related to an item in its ending inventory.
packit (product # 874) has a cost of $524, a replacement cost of $402, a net realizable
value of $468, and a normal profit margin of $21. what is the final
lower-of-cost-or-market inventory value for packit?
a.$447
b.$524
c.$402
d.$468
7) what is the effect of freight-in on the cost-retail ratio when using the conventional
retail method?
a.increases the cost-retail ratio
b.no effect on the cost-retail ratio
c.depends on the amount of the net markups
d.decreases the cost-retail ratio
8) comprehensive income includes all of the following except
a.dividend revenue
b.losses on disposal of assets
c.investments by owners
d.unrealized holding gains
9) the fair value option allows a company to
a.value its own liabilities at fair value
b.record income when the fair value of its bonds increases
c.report most financial instruments at fair value by recording gains and losses as a
separate component of stockholders equity
d.all of the above are true of the fair value option
10) the net income for the year ended december 31, 2013, for oliva company was
$1,500,000. additional information is as follows:
based solely on the information given above, what should be the net cash provided by
operating activities in the statement of cash flows for the year ended december 31,
2013?
a.$2,560,000
b.$2,660,000
c.$2,640,000
d.$2,800,000
11) which of the following is correct about the effective-interest method of
amortization?
a.the effective interest method applied to investments in debt securities is different from
that applied to bonds payable
b.amortization of a discount decreases from period to period
c.amortization of a premium decreases from period to period
d.the effective-interest method produces a constant rate of return on the book value of
the investment from period to period