Baruch College – CUNY
Zicklin School of Business Executive MBA
Financial Accounting
Fall 2003
– Prof Jan Sweeney
Part 1 – Multiple Choice ( 43 points)
Version A
1 – C , 2 – C 3 -
B, 4 – B, 5 – B, 6 – C, 7 – B, 8 – B, 9
– B, 10 – D, 11 – D.
Version B
1.
(4) C
2 (6) B 3. (3) B
4. (3) B 5. (3) B 6. (3) C
7. (3)C 8. (3) B
9.(3) D 10(6): B
11. - D
Version C
1. (6) : B 2.
(3) B 3. (6) B 4. (6) D
5. (4) C 6. (3) B 7. (3) B 8. (3) B
9. (3) D 10. (3) C
11. (3) : C
Part 2 – Short Answer ( points)
A4, B3, C1. (10 points)
|
a. |
Operating |
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b. |
Operating |
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c. |
Capital |
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d. |
Capital |
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e. |
Capital |
A2, B4, C2 (10 points)
|
a. |
December 31, Year 2 |
|
|
|
|
Rent Expense |
50,000 |
|
|
|
Cash |
|
50,000 |
|
|
|
|
|
|
b. |
January 2, Year 2 |
|
|
|
|
Equipment |
249,635.50 |
|
|
|
Lease
Liability |
|
249,635.50 |
|
|
$50,000 ´ 4.99271 = $249,635.50. |
|
|
|
|
|
|
|
|
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Lease liability |
50,000.00 |
|
|
|
Cash |
|
50,000.00 |
|
|
Dec 31, Year 2 |
|
|
|
|
Interest Expense (.8 ´ $199,635.50) |
15,970.84 |
|
|
|
Lease Interest Payable |
|
15,970.84 |
A3, B2, C3 (16 points)
8.
a. Determine the amount of cash
received by the firm (Round to the nearest dollar and disregard any minor
rounding differences. in all parts of this question)
a.
$210,483
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
b. Make the journal entry to record the issue of
the bond.
a.
Cash
........................................................................ $210,483
b.
Premium
on Bond ........................................ $ 10,483
i.
Bonds
Payable.............................................. 200,000
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
c. Make the journal entry to record the first
interest payment on June 30 Year 1
a.
Interest
Expense........................................................ $ 8,419
b.
Premium on
Bond..................................................... 1,581
i.
Cash..............................................................
$10,000
31.
32.
33.
34.
35.
d.
Make the journal entry to record
the second interest payment on Dec 31, Year 1
Interest
Expense........................................................ $ 8,356
a.
Premium on
Bond..................................................... 1,644
i.
Cash..............................................................
$10,000
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
e. What is the present value of the bond at the
effective interest on Jan 1 , Year 2. 207,258
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
A1, B5, C4 (6
points)
|
a. |
$375.0 million = .25 ´
$1,500 million |
|
b. |
$150.0 million |
A5, B1,C5 (15
points)
|
|
Method |
Cost of goods sold |
Inventory |
|
a. |
FIFO |
$475.000 |
$372.50 |
|
b. |
LIFO |
487.50 |
360.00 |