2004 Spring Accounting_011_exam_2___Spring_2004__Answer_Key

2004 Spring Accounting_011_exam_2___Spring_2004__Answer_Key...

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Name ________________________________ Temple University Fox School of Business and Management Dr. Steven Balsam Accounting 011 Exam #2-Answers March 18, 2004 Instructions: You have 150 minutes. Answer the questions on the pages provided and please remember to show all work so that you may receive partial credit. Also please put your name on each page in case the pages get separated. Good luck!
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Name ________________________________ Answer Sheet for Multiple Choice 1. ________________ 2. ________________ 3. ________________ 4. ________________ 5. ________________ 6. ________________ 7. ________________ 8. ________________ 9. ________________ 10. ________________ 11. ________________ 12. ________________ 13. ________________ 14. ________________ 15. ________________ 16. ________________ 17. ________________ 18. ________________ 19. ________________ 20. ________________
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Multiple Choice (2.5 points each – 50 points total – please include answers on answer sheet). 1. At the end of two years, what will be the balance in a savings account paying 6% annually if $20,000 is deposited today? The future value of one at 6% for one period is 1.06. a. $20,000 b. $21,200 c. $22,400 d. $22,472 20,000*1.12360=22,472 2. Henson Company wishes to accumulate $500,000 by May 1, 2012 by making 8 equal annual deposits beginning May 1, 2004 to a fund paying 8% interest compounded annually. What is the required amount of each deposit? a. $87,008 b. $47,007 c. $43,525 d. $50,390 500,000/10.63663=47,007 3. What amount should be recorded as the cost of a machine purchased December 31, 2003, which is to be financed by making 8 annual payments of $8,000 each beginning December 31, 2004? The applicable interest rate is 8%. a. $56,000 b. $49,975 c. $85,093 d. $45,973 8,000*5.74664=45,973 4. Dyer Co. has a machine that cost $600,000. It is to be leased for 20 years with rent received at the beginning of each year. Dyer wants a return of 10%. Calculate the amount of the annual rent. a. $64,069 b. $71,728 c. $89,184 d. $70,476 600,000/9.36492=64,069
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5. Find the present value of an investment in plant and equipment if it is expected to provide annual earnings of $63,000 for 15 years and to have a resale value of $120,000 at the end of that period. Assume a 10% rate and earnings are received at year end. a. $479,184 b. $507,910 c. $555,828 d. $973,728 63,000 * 7.60608=479,183 120,000 * .23939= 28,727 473,183+28,727=507,910 6. Before year-end adjusting entries, Bass Company's account balances at December 31, 2004, for accounts receivable and the related allowance for uncollectible accounts were $700,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is a. $682,500. b.
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2004 Spring Accounting_011_exam_2___Spring_2004__Answer_Key...

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