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1) On January 1, 2011, Freder Corporation purchased 7,500 shares of SportTech as a
long-term investment for a total of $235,000. The 7,500 shares represent 30% of the
outstanding (25,000) shares of SportTech. Prepare the journal entries for Freder to
record the following transactions and events:
2) Two limitations of internal control systems are ____________________ and
_______________.
3) The _______________________ ratio is a measure of a segment's profitability and is
calculated as segment operating income divided by segment average assets.
4) When making capital budgeting decisions, companies usually prefer shorter payback
periods. Explain why shorter payback periods are desirable.
5) Define and discuss the differences between operating, investing and financing
activities.
6) The master budget process nearly always begins with the preparation of the
___________________ and usually finishes with the preparation of the
_____________________, the _______________, and the _____________________.
