1) the worksheet for sharko co. consisted of five pairs of debit and credit columns. the
dollar amount of one item appeared in both the credit column of the income statement
section and the debit column of the balance sheet section. that item is
a.net income for the period
b.beginning inventory
c.cost of goods sold
d.net loss for the period
2) on june 30, 2012, norman corporation granted compensatory stock options for 40,000
shares of its $20 par value common stock to certain of its key employees. the market
price of the common stock on that date was $36 per share and the option price was $30.
the black-scholes option pricing model determines total compensation expense to be
$480,000. the options are exercisable beginning january 1, 2013, provided those key
employees are still in normans employ at the time the options are exercised. the options
expire on june 30, 2014.
on january 4, 2013, when the market price of the stock was $42 per share, all 40,000
options were exercised. what should be the amount of compensation expense recorded
by norman corporation for the calendar year 2012 using the fair value method?
a.$0
b.$192,000
c.$240,000
d.$480,000
3) on june 1, 2012, pitts company sold some equipment to gannon company. the two
companies entered into an installment sales contract at a rate of 8%. the contract
required 8 equal annual payments with the first payment due on june 1, 2012. what type
of compound interest table is appropriate for this situation?
a.present value of an annuity due of 1 table
b.present value of an ordinary annuity of 1 table
c.future amount of an ordinary annuity of 1 table
d.future amount of 1 table
4) information concerning the capital structure of piper corporation is as follows:
during 2013, piper paid dividends of $0.80 per share on its common stock and $2.00 per
share on its preferred stock. the preferred stock is convertible into 30,000 shares of
common stock. the 6% convertible bonds are convertible into 75,000 shares of common
stock. the net income for the year ended december 31, 2013, was $400,000. assume that
the income tax rate was 30%.
what should be the diluted earnings per share for the year ended december 31, 2013,
rounded to the nearest penny?
a.$2.13
b.$1.96
c.$1.89
d.$1.57
5) ethan has $80,000 to invest today at an annual interest rate of 4%. approximately
how many years will it take before the investment grows to $162,000?
a.18 years
b.20 years
c.16 years
d.11 years
6) what might a manager do during the last quarter of a fiscal year if she wanted to
improve current annual net income?
a.increase research and development activities
b.relax credit policies for customers
c.delay shipments to customers until after the end of the fiscal year
d.delay purchases from suppliers until after the end of the fiscal year
7) in a corporate form of business organization, legal capital is best defined as
a.the amount of capital the state of incorporation allows the company to accumulate
over its existence
b.the par value of all capital stock issued
c.the amount of capital the federal government allows a corporation to generate
d.the total capital raised by a corporation within the limits set by the securities and
exchange commission
8) preliminary views
the chronological order in which these items are released is as follows:
a.1, 2, 3
b.1, 3, 2
c.2, 3, 1
d.3, 1, 2
9) which of the following is included in inventory costs?
a.product costs
b.period costs
c.product and period costs
d.neither product or period costs
10) the quality of information that means the numbers and descriptions match what
really existed or happened is
a.relevance
b.faithful representation
c.completeness
d.neutrality