5564_1_Assignement5_partI
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5564_1_Assignement5_partI

Course Number: FI515 FI515, Spring 2011

College/University: Keller Graduate School...

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Assignment 3ex Question 1 Assume that you are comparing two mutually exclusive projects. Which of the following statements is most correct? Answer 2. Normal projects C and D are mutually exclusive. Project C has a higher net present value if the WACC is less than 12 percent, whereas Project D has a higher net present value if the WACC exceeds 12 percent. Both projects have a positive NPV if the WACC is 12...

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3ex Question Assignment 1 Assume that you are comparing two mutually exclusive projects. Which of the following statements is most correct? Answer 2. Normal projects C and D are mutually exclusive. Project C has a higher net present value if the WACC is less than 12 percent, whereas Project D has a higher net present value if the WACC exceeds 12 percent. Both projects have a positive NPV if the WACC is 12 percent. Which of the following statements is most correct? Answer a. Project D has a higher internal rate of return. b. Project D is probably larger in scale than Project C. c. Project C probably has a faster payback. d. All of the statements above are correct. e. Answers a and c are correct. 3. Two mutually exclusive projects each have a cost of $10,000. The total, undiscounted cash flows from Project L are $15,000, while the undiscounted cash flows from Project S total $13,000. Their NPV profiles cross at a discount rate of 10 percent. Which of the following statements best describes this situation? Answer Two mutually exclusive projects each have a cost of $10,000. The total, undiscounted cash flows from Project L are $15,000, while the undiscounted cash flows from Project S total $13,000. Their NPV profiles cross at a discount rate of 10 percent. Which of the following statements best describes this situation? Answer a. The NPV and IRR methods will select the same project if the cost of capital is greater than 10 percent; for example, 18 percent. b. The NPV and IRR methods will select the same project if the cost of capital is less than 10 percent; for example, 8 percent. c. To determine if a ranking conflict will occur between the two projects the cost of capital is needed as well as an additional piece of information. d. Project L should be selected at any cost of capital, because it has a higher IRR. e. Project S should be selected at any cost of capital, because it has a higher IRR. 4. In comparing two mutually exclusive projects of equal size and equal life, which of the following statements is most correct? Answer a. The project with the higher NPV may not always be the project with the higher IRR. b. The project with the higher NPV may not always be the project with the higher MIRR. c. The project with the higher IRR may not always be the project with the higher MIRR. d. All of the answers above are correct. e. Answers a and c are correct. 5. Which of the following statements is incorrect? Answer a. Assuming a project has normal cash flows, the NPV will be positive if the IRR is less than the cost of capital. b. If the multiple IRR problem does not exist, any independent project Which of the following statements is incorrect? Answer acceptable by the NPV method will also be acceptable by the IRR method. c. If IRR = r (the cost of capital), then NPV = 0. d. NPV can be negative if the IRR is positive. e. The NPV method is not affected by the multiple IRR problem. 6. Projects L and S each have an initial cost of $10,000, followed by a series of positive cash inflows. Project L has total, undiscounted cash inflows of $16,000, while S has total undiscounted inflows of $15,000. Further, at a discount rate of 10 percent, the two projects have identical NPVs. Which project's NPV will be more sensitive to changes in the discount rate? (Hint: Projects with steeper NPV profiles are more sensitive to discount rate changes.) Answer a. Project S. b. Project L. c. Both projects are equally sensitive to changes in the discount rate since their NPVs are equal at all costs of capital. d. Neither project is sensitive to changes in the discount rate, since both have NPV profiles which are horizontal. e. The solution cannot be determined unless the timing of the cash flows is known. 7. Project X has an internal rate of return of 20 percent. Project Y has an internal rate of return of 15 percent. Both projects have a positive net present value. Which of the following statements is most correct? Answer a. Project X must have a higher net present value than Project Y. b. If the two projects have the same WACC, Project X must have a higher net present value. c. Project X must have a shorter payback than Project Y. d. Both answers b and c are correct. e. None of the above answers is correct. Project X has an internal rate of return of 20 percent. Project Y has an internal rate of return of 15 percent. Both projects have a positive net present value. Which of the following statements is most correct? Answer 8. Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a cost of capital of 12 percent. Which of the following statements is most correct? Answer a.Both projects have a positive net present value (NPV). b.Project A must have a higher NPV than Project B. c.If the cost of capital were less than 12 percent, Project B would have a higher IRR than Project A. d.Statements a and c are correct. e.Statements a, b, and c are correct 9. Which of the following statements is most correct? Answer a. The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the IRR. b. The NPV method assumes that cash flows will be reinvested at the risk free rate while the IRR method assumes reinvestment at the IRR. c. The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the riskfree rate. d. The NPV method does not consider the inflation premium. e. The IRR method does not consider all relevant cash flows, and particularly cash flows beyond the payback period. Which of the following statements is most correct? Answer 10. Your company has a cost of capital equal to 10%. If the following projects are mutually exclusive, and you only have the information that is provided, which should you accept? methods/ A/ B/ C/ E Payback (years)/ 1/ 5/ 2/ 5 IRR/ 18%/ 20%/ 20%/ 12% NPV (Millions)/ $40/ $75/ $35/ $100 Answer a. A b. B c. C d. B and C e. E 11. Assume a project has normal cash flows (i.e., the initial cash flow is negative, and all other cash flows are positive). Which of the following statements is most correct? Answer a. All else equal, a project's IRR increases as the cost of capital declines. b. All else equal, a project's NPV increases as the cost of capital declines. c. All else equal, a project's MIRR is unaffected by changes in the cost of capital. d. Answers a and b are correct. e. Answers b and c are correct. 12. Projects A and B have the same expected lives and initial cash outflows. However, one project's cash flows are larger in the early years, while the other project has larger cash flows in the later years. The two NPV profiles are given below:Which of the following statements is most correct? NPV profiles.doc Answer a. Project A has the smaller cash flows in the later years. b. Project A has the larger cash flows in the later years. c. We require information on the cost of capital in order to determine which project has larger early cash flows. d. The NPV profile graph is Projects A and B have the same expected lives and initial cash outflows. However, one project's cash flows are larger in the early years, while the other project has larger cash flows in the later years. The two NPV profiles are given below:Which of the following statements is most correct? NPV profiles.doc Answer inconsistent with the statement made in the problem. e. None of the statements above is correct. 13. A project has an up-front cost of $100,000. The project's WACC is 12 percent and its net present value is $10,000. Which of the following statements is most correct? Answer a. The project should be rejected since its return is less than the WACC. b. The project's internal rate of return is greater than 12 percent. c. The project's modified internal rate of return is less than 12 percent. d. All of the above answers are correct. e. None of the above answers is correct. 14. Which of the following statements is most correct? Answer a. If a project's internal rate of return (IRR) exceeds the cost of capital, then the project's net present value (NPV) must be positive. b. If Project A has a higher IRR than Project B, then Project A must also have a higher NPV. c. The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the cost of capital. d. Answers a and c are correct. e. None of the answers above is correct. 15. Project A has an IRR of 15 percent. Project B has an IRR of 18 percent. Both projects have the same risk. Which of the following statements is most correct? Answer a. If the WACC is 10 percent, both projects will have a positive NPV, and the NPV of Project B will exceed the NPV of Project A. b. If the WACC is 15 percent, the NPV of Project B will exceed the NPV of Project A. c. If the WACC is less than 18 percent, Project B will always have a shorter payback than Project A. d. If the WACC is greater than 18 percent, Project B will always have a shorter payback than Project A. e. If the WACC increases, the IRR of both projects will decline 16. A major disadvantage of the payback period method is that it Answer a. Is useless as a risk indicator. b. Ignores cash flows beyond the payback period. c. Does not directly account for the time value of money. d. All of the answers above are correct. e. Only answers b and c are correct. 17. Which of the following can be used to make a comparison of projects with unequal lives? Answer a. Replacement Chain Method b. Equivalent Annual Annuity Approach c. Profitability Index d. Both a & b e. All of the above 18. Which of the following statement(s) is (are) true? I. A firm should never undertake an investment if accepting the project would lead to an increase in the firm's cost of capital. II. Conflicts between two mutually exclusive projects, where the NPV method chooses one project but the IRR method chooses the other, should generally be resolved in favor of the project with the higher NPV. III. The NPV method's assumption that cash inflows are reinvested at the cost of capital is more reasonable than the IRR's assumption that cash flows are reinvested at the IRR. This is an important reason why the NPV method is generally preferred over the IRR method. IV. The phenomenon called "multiple internal rates of return" arises when two or more mutually exclusive projects that have different lives are being compared. V. The replacement chain, or common life, approach is required when analyzing projects that have different lives regardless of whether the projects are mutually exclusive or independent. Answer I, and II II, and III III and IV II, IV, and V 19. If the IRR of a project is equal to the discount rate of the project then _______. Answer a. the PI is zero b. the payback period is zero c. the NPV is zero d. the present value payback period is zero 20. If a projects present value payback period equals the length of the project, then ________. Answer a. the NPV is greater than zero b. the NPV is zero c. the PI less than 1.0 d. the payback period is equal to the length of the project 21. A project has an initial cost of $20,000.00 and no another costs throughout the life of the project. Assuming the project has a PI of 1.23, the IRR is _________. Answer a. greater than the discount rate b. lower than the discount rate c. equal to the discount rate d. not comparable to the discount rate 22. Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. Answer a.A projects NPV is found by compounding the cash inflows at the IRR to find the terminal value (TV), then discounting the TV at the WACC. b.The lower the WACC used to calculate it, the lower the calculated NPV will be. c.If a projects NPV is less than zero, then its IRR must be less than the WACC. d. If a projects NPV is greater than zero, then its IRR must be less than zero. e.The NPV of a relatively low risk project should be found using a relatively high WACC. 23. Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which projects have normal cash flows. Project A has an IRR of IRR of 11%, while Project B's IRR is 14%. When the WACC is 8%, the projects have the same NPV. Given this information, which of the following statements is CORRECT? Answer a.If the WACC is 13%, Project As NPV will be higher than Project Bs. b.If WACC the is 9%, Project As NPV will be higher than Project Bs. c.If the WACC is 6%, Project Bs NPV will be higher than Project As. d.If the WACC is greater than 14%, Project As IRR will exceed Project Bs. e.If the WACC is 9%, Project Bs NPV will be higher than Project As. 24. Which of the following statements is CORRECT? Answer a.The NPV method assumes that cash flows will be reinvested at the WACC, while the IRR method assumes reinvestment at the IRR. b.The NPV method assumes that cash flows will be reinvested at the risk-free rate, while the IRR method assumes reinvestment at the IRR. c. The NPV method assumes that cash flows will be reinvested at the WACC, while the IRR method assumes reinvestment at the riskfree rate. d. The NPV method does not consider all relevant cash flows, particularly cash flows beyond the payback period. e. The IRR method does not consider all relevant cash flows, particularly cash flows beyond the payback period. 25. The objective in solving capital rationing problems is to Answer a. accept all projects with a PI greater than 1.1. b. maximize the average IRR of the projects that are accepted. c. maximize the total NPV of the projects that are accepted. d. minimize the firm's cost of capital. 26. Financial leverage is a direct function of the ratio of= Answer a. EAT to sales. b. EBIT to sales. c. interest expense to EBIT. d. EAT to the number of shares of common stock. 27. Financial leverage has the following effect on financial performance: Answer a. during periods of reasonably good performance, leverage enhances results in terms of ROE and EPS b. leverage adds variability to financial performance making the firm's stock a riskier investment c. leverage always makes performance better and thereby increases stock price d. both a and b 28. Financial leverage amplifies relative changes in EBIT into larger relative changes in ROE and EPS, operating leverage amplifies: Answer a. relative changes in EBIT into larger relative changes in sales revenue b. relative changes in sales revenue Financial leverage amplifies relative changes in EBIT into larger relative changes in ROE and EPS, operating leverage amplifies: Answer into larger relative changes in EBIT c. relative changes in sales revenue into larger relative changes in ROE and EPS d. relative changes in ROE and EPS into larger relative changes in EBIT 29. Which of the following is not true with respect to operating leverage Answer a. higher operating leverage insulates a firm from losses in bad times. b. firms with higher operating leverage have a larger contribution from each sale, so they accumulate profits or losses faster as they move away from the breakeven point in sales c. increased operating leverage increases business risk d. virtually all firms have at least some operating leverage 30. Which of the following statements is CORRECT? Answer a. The capital structure that maximizes expected EPS also maximizes the price per share of common stock. b. The capital structure that minimizes the interest rate on debt also maximizes the expected EPS. c. The capital structure that minimizes the required return on equity also maximizes the stock price. d. The capital structure that minimizes the WACC also maximizes the price per share of common stock. 30. Which of the following statements is CORRECT? Answer e. The capital structure that gives the firm the best credit rating also maximizes the stock price. 31. Which of the following would increase a firm's financial leverage? Answer a. an increase in depreciation b. an increase in interest expense c. an increase in the number of shares of common stock outstanding d. a and b e. all of the above 32. Which of the following statements is CORRECT? Answer a. Since debt financing raises the firm's financial risk, increasing a companys debt ratio will always increase its WACC. b. Since debt financing is cheaper than equity financing, raising a companys debt ratio will always reduce its WACC. c. Increasing a companys debt ratio will typically reduce the marginal cost of both debt and equity financing. However, this action still may raise the companys WACC. d. Increasing a companys debt ratio will typically increase the marginal cost of both debt and equity financing. However, this action still may lower the companys WACC. e. Since a firm's beta coefficient it not affected by its use of financial leverage, leverage does not affect the cost of equity. 33. A DFL (degree of financial leverage) of 3.0 indicates that a 27% increase in EPS is the result of a _____ increase in EBIT. Answer a. 81% b. 3% c . 9% d. 6% 34. An increase in the debt ratio will generally have no effect on which of these items? Answer a. Business risk. b. Total risk. c. Financial risk. d. Market risk. e. The firm's beta. 35. The central issue in the study of leverage is Answer a. whether leverage affects stock price. b. whether an optimal capital structure exists that maximizes stock price. c. whether an optimal capital structure exists that minimizes the cost of capital d. all of the above. 36. The use of fixed-cost financing is referred to as Answer a. operating leverage. b. a leveraged buyout. c. financial leverage. d. combined leverage. 37. Jayco, Inc., has a division that makes red ink for the accounting industry. The unit has fixed costs of $10,000 per month and is expected to sell 40,000 bottles of ink per month. if the variable cost per bottle is $2.00, what price must the division charge in order to breakeven? Answer a. $2.25 b. $2.50 c. $2.75 d. $3.25 38. MC. The basic characteristics of relevant project flows include all of the following EXCEPT Answer after-tax flows. cash flows. financing flows. incremental flows. 39. MC. In analyzing a long-term investment proposal, Answer 40. MC. Which of the following would NOT be included in projecting the incremental net cash flow for the terminal year of a new project? Answer MC. Which of the following would NOT be included in projecting the incremental net cash flow for the terminal year of a new project? Answer 41. An important cash inflow in the analysis of initial cash flows for a replacement project is Answer A) taxes. B) the cost of the new asset. C) installation cost. D) the sale value of the old asset. 42. When evaluating a capital budgeting project, the change in net working capital must be considered as part of Answer A) the operating cash inflows. B) the initial investment. C) the incremental operating cash inflows. D) the operating cash outflows. 43. In evaluating the initial investment for a capital budgeting project, Answer A) an increase in net working capital is considered a cash inflow. B) a decrease in net working capital is considered a cash outflow. C) an increase in net working capital is considered a cash outflow. D) net working capital does not have to be considered. 44. Cash outlays that had been previously made and have no effect on the cash flows relevant to a current decision are called Answer Cash outlays that had been previously made and have no effect on the cash flows relevant to a current decision are called Answer A) incremental historical costs. B) incremental past expenses. C) opportunity costs foregone. D) sunk costs. 45. The change in net working capital when evaluating a capital budgeting decision is Answer A) the change in current liabilities minus the change in current assets. B) the increase in current assets. C) the increase in current liabilities. D) the change in current assets minus the change in current liabilities. 46. ________ projects have the same function; the acceptance of one ________ the others from consideration. Answer A) Capital; eliminates B) Independent; does not eliminate C) Mutually exclusive; eliminates D) Replacement; does not eliminate 47. ________ is the process of evaluating and selecting long-term investments consistent with the firm's goal of owner wealth maximization. Answer A) Recapitalizing assets B) Capital budgeting C) Ratio analysis D) Restructuring debt 48. The tax treatment regarding the sale of existing assets that are sold for more than the book value and more than the original purchase price results in Answer A) an ordinary tax benefit. B) no tax benefit or liability. C) recaptured depreciation taxed as ordinary income. D) a capital gain tax liability and recaptured depreciation taxed as ordinary income. 49. Relevant cash flows for a project are best described as Answer A) incidental cash flows. B) incremental cash flows. C) sunk cash flows. D) accounting cash flows. 50. Cash flows that could be realized from the best alternative use of an owned asset are called Answer A) incremental costs. B) lost resale opportunities. C) opportunity costs. D) sunk costs. 51. The basic variables that must be considered in determining the initial investment associated with a capital expenditure are all of the following EXCEPT Answer A) incremental annual savings produced by the new asset. B) cost of the new asset. C) proceeds from the sale of the existing asset. D) taxes on the sale of an existing asset. 52. When evaluating a new project, the firm should consider all of the following factors except: Answer a. Changes in working capital attributable to the project. b. Previous expenditures associated with a market test to determine the feasibility of the project, if the expenditures have been expensed for tax purposes. c. The current market value of any equipment to be replaced. d. The resulting difference in depreciation expense if the project involves replacement. e. All of the statements above should be considered. 53. A company is considering a proposed expansion to its facilities. Which of the following statements is most correct? Answer a. In calculating the project's operating cash flows, the firm should not subtract out financing costs such as interest expense, since these costs are A company is considering a proposed expansion to its facilities. Which of the following statements is most correct? Answer b. c. d. e. already included in the WACC, which is used to discount the project?s net cash flows. Since depreciation is a non-cash expense, the firm does not need to know the depreciation rate when calculating the operating cash flows. When estimating the project?s operating cash flows, it is important to include any opportunity costs and sunk costs, but the firm should ignore cash flows from externalities since they are accounted for elsewhere. Statements a and c are correct. None of the statements above is correct. 54. Answer Twin Hills Inc. is considering a proposed project. Given available information, it is currently estimated that the proposed project is risky but has a positive net present value. Which of the following factors would make the company less likely to adopt the current project? Answer Twin Hills Inc. is considering a proposed project. Given available information, it is currently estimated that the proposed project is risky but has a positive net present value. Which of the following factors would make the company less likely to adopt the current project? a. It is revealed that if the company proceeds with the proposed project, the company will lose two other accounts, both of which have positive NPVs. b. It is revealed that the company has an option to back out of the project 2 years from now, if it is discovered to be unprofitable. c. It is revealed that if the company proceeds with the project, it will have an option to repeat the project 4 years from now. d. Answers a and b are correct. e. Answers b and c are correct. 55. Which of the following statements is most correct? Answer a. Sunk costs should be incorporated into capital budgeting decisions. b. Opportunity Which of the following statements is most correct? Answer costs should be incorporated into capital budgeting decisions. c. Relevant externalities should be incorporated into capital budgeting decisions. d. Answers b and c are correct. e. Answers a, b, and c are correct. 56. Which of the following statements is most correct? Answer a. The rate of depreciation will often affect operating cash flows, even though depreciation is not a cash expense. b. Corporations should fully account for sunk costs when making investment decisions. c. Corporations should fully account for opportunity costs when making investment decisions. d. All of the answers above are correct. Which of the following statements is most correct? Answer e. Answers a and c are correct.

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1Bus 150 IP 1Lobbying and BriberyMargaret Wills-7991768AIU Online2Bus 150 IP 1IntroductionThe report is going to explain the difference between lobbying and bribery. It is alsogoing to cover what argument the SLOC members could make that the paym
Owensboro Community and Technical College - ECON - 101
Inatypicalincorporation,Sec.351defersgainorlossrecognition.Inatypicalliquidation,howmanylayersofincometaxwillbepaid?Notaxwillbeassessed.Corporateliquidationsarenormallytaxfree.Onelayeroftaxonlytheshareholderwillpaytaxuponacorporateliquidation.Onelayer
Owensboro Community and Technical College - ECON - 101
Government and Non-ProfitHomeworkCHAPTER 11-1 Examine the CAFRA) Introductory SectionThe material provided defines the government reporting entity and names the primarygovernment/ related component units:The introductory section also reports the fi
Owensboro Community and Technical College - ECON - 101
Government and Non-ProfitHomeworkCHAPTER 22-1 Examine the CAFRA) Government-Wide Statements:Titles: Statement of Net Assets and Statement of ActivityTotal Assets: Governmental Activities > Business-Type ActivitiesNet Cost: Public Safety has the hig
Owensboro Community and Technical College - ECON - 101
Government and Non-ProfitHomeworkCHAPTER 33-1 Examine the CAFRA) Statement of Activities at the Government-Wide Level:- The government has prepared statements in compliance with the GASB 34 financialreporting model.- Appears on one page (See page 2
Owensboro Community and Technical College - ECON - 101
Government and NonprofitChapter 4: Accounting for Governmental Operating Activities4-1 Examine the CAFRA. Governmental Activities, Government-Wide Level1. Are governmental activities reported in a separate column from business-type activitiesin the t
Owensboro Community and Technical College - ECON - 101
Government and Non-ProfitHomework: Chapter 55-2 Multiple Choice1. Under GASB standards, which of the following would be considered an example of anintangible asset?:B2. Four new desktop computers, for which the cost exceeded the citys capitalization
Owensboro Community and Technical College - ECON - 101
Activity-Based Costing (ABC):A Profitable Tool in Decision MakingBy: Carrie BowenDr. Duane SmithAdv. Managerial Accounting Acc 304November 2nd, 2010Activity-Based Costing:Carrie Bowen 2A Profitable Tool in Decision MakingAn activity-based costing
Owensboro Community and Technical College - ECON - 101
Problem1InitialInvesment500000NetCashFlow Depreciation12000050000Requirment1:PaybackPeriodInitialInvestment:Requirment3:NPVPVofanAnnuityFactorRequirment4:PVPaybackInitialInvestment/NPVProblem20.140.28NPVNPVInitialInvestment1780006780005
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Fixed Asset Detail ListingDec. 31, 2011Depreciation ExpenseFixed Asset AcquisitionTagDateDescriptionCostEstimatedUseful Life2008AccumulatedDepreciation20102011$9,000.00$6,800.00$9,000.00$20,400.00$9,000.00$20,400.00
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Fixed Asset MemoFeb. 4, 2012After auditing the Fixed Assets of Apollo Shoes, Inc., three concerns have been noted.First, Apollo seems to have capitalized some repair and repainting of a building for atotal of $50,408. This should no
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Accounts Payable ScheduleFor Year Ended 12-31-2011Unaudited BalanceAudited BalanceList of Approved VendorsAnglonesian Institute for Reprograming and Rehabilitation$- $8,434,889.09$B. Franklin's LP&EFleur de Lis Catering$6,868.1
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Schedule of Current LiabilitiesFor Year Ended 12/31/2011Acct#2000023100232002330023350234002350023600237002380023900AccountTitleAccountsPayableSalesTaxPayableWagesPayableFICAEmployeeWithholdingMedicareWithholdingFede
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Accounts Payable ScheduleFor Year Ended 12/31/2011List of Approved VendorsAnglonesian Institute forReprograming andRehabilitationB. Franklin's LP&EFleur de Lis CateringJust BoxesLawyers "R" Us, LLCOffice Hacks SuppliesSign Up
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Search for Unrecorded LiabilitiesFor Year Ended 12-31-2011From Cutoff Bank Statement:CheckDateAmount362213-Jan-12$6,683.93From Check RegisterDate of Check Payee10-Jan-12Smart ChipInvoice Date27-Dec-11362313-Jan-12$2,937
Owensboro Community and Technical College - ECON - 101
Apollo Shoes, Inc.Notes Payable ScheduleFor Year Ended 12-31-2011Acct #Account Title27000Notes Payable-Noncurrent24100Line of Credit24200Current Portion Long-Term Debt(Audited)Balance12/31/2010$10,000,000.00Additions2-Feb-11 $10,000,000.00
Owensboro Community and Technical College - ECON - 101
ApolloShoes,Inc.NotePayableMemoJan.26,2012WereallydidnotseeanyproblemswiththenotespayableleadschedulesentbyApollo.Weareprettycertainthattheseamountswerecorrectandaccurateasstatedandhavenoreasontoquestionstheamounts.N-1
Troy - ACT - 4497
CHAPTER 8MATERIALITY DECISIONS AND PERFORMINGANALYTICAL PROCEDURESLearning Check8-1.a.Materiality is defined by the FASB as: The magnitude of an omission ormisstatement of accounting information that, in the light of surroundingcircumstances, make
Troy - ACT - 4497
CHAPTER 9AUDIT RISK, INCLUDING THE RISK OF FRAUDLearning Check9-1.The KPMG 2003 Fraud Survey reported that 75% of organizations surveyed experiencedsome level of fraud in the last 12 months. Seven percent reported problems withfraudulent financial r
Troy - ACT - 4497
CHAPTER 10 UNDERSTANDING INTERNAL CONTROLLearning Check10-1. a. The Foreign Corrupt Practices Act of 1977 is administered by the Securities and Exchange Commission. The Act pertains to management and directors of companies subject to the reporting requi
Troy - ACT - 4497
CHAPTER 11 AUDIT PROCEDURES IN RESPONSE TO ASSESSED RISKS: TESTS OF CONTROLSLearning Check11-1. a. Assessing control risk is the process of evaluating the effectiveness of an entity's internal controls in preventing or detecting material misstatements i
Troy - ACT - 4497
CHAPTER 12 AUDIT PROCEDURES IN RESPONSE TO ASSESSED RISKS: SUBSTANTIVE TESTSLearning Check12-1. The three steps involved in assessing the risk of material misstatement are: 1. Evaluate the type of potential misstatement(s) that may occur, such as evalua
Troy - ACT - 4497
CHAPTER 14 AUDITING THE REVENUE CYCLELearning Check14-1. a. b. The revenue cycle includes the activities involved in the exchange of goods and services with customers and the realization of the revenue in cash. The classes of transactions in this cycle
Troy - ACT - 4491
Advanced AccountingChapter 1Learning ObjectivesDescribe the major economic advantages of business combinationsDifferentiate between accounting for an acquisition of assets andaccounting for an acquisition of a controlling interest in the commonstock
Troy - ACT - 4491
ACT4491 Advanced AccountingSubsequent to AcquisitionExamples19/21/2009 05:00 PMDate of AcquisitionOn the date of acquisition, stockholders equity in the acquired entity isequal to book valueEliminating stockholders equity is a matter of eliminatin
Troy - ACT - 4491
Combination after AcquisitionEXERCISE 2-1Solara CorporationPro Forma Income StatementOwnership Levels10%Sales.Cost of goods sold .Gross profit .Selling and administrative expenses .Operating income.Dividend income (10% $15,000 dividends) .Inve
Troy - ACT - 4491
Intercompany Transactions:Merchandise, Plant Assets,and NotesFISCHER / TAYLOR / CHENG10 EditionTypical Intercompany TransactionsMerchandise for resaleLandFixed assetsLong-term construction contractsNotes receivable/payableCOPYRIGHT 2009 South-W
Troy - ACT - 4491
_School of Accountancy Mission StatementThe mission of the School of Accountancy is to advance the accounting profession by providing quality accountingeducation to both undergraduate and graduate students, publishing quality research and providing ser
Troy - ACT - 4491
Advanced AccountingReview of Trial Balance,Adjusting, and ClosingTrial Balance The trial balance lists all account balances at the end ofan accounting period From ledger All accounts are listed and the equality of the trial balanceis proven before
Troy - ACT - 4491
T01 ADVANCED ACCOUNTING ACT-4491-TDWA 10/SP (MAGRATH) (T01-ACT4491TDWA-10SP) > EXAMS/QUIZZES > REVIEWASSESSMENT: ACT4491 EXAM 1 SP10Review Assessment:Yu Chen1/27/10 10:43 AMACT4491 Exam 1 SP10Completed56 out of 108 points1 hours, 2 minutes, and 15
Troy - ACT - 4491
EXERCISE 10-1Balance sheet accountsDebit (Credit):Inventory:Down payment (50,000 euros $1.350).Balance due (400,000 euros $1.370).Total.Accounts payable:(400,000 euros $1.370).Investment in option.Income statement accountsDebit (Credit):Exchange
Troy - ACT - 4491
EXERCISE 13-11. Investors in a partnership are not issued stock and have a capital balance rather than acapital stock at par value account. Regarding the question of legal liability, a partnership ischaracterized by unlimited liability in that claims a