2006 midterm

2006 midterm - Ev-MBAC 6020 Midterm, Spring 2006page...

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Unformatted text preview: Ev-MBAC 6020 Midterm, Spring 2006page 1UNIVERSITY OF COLORADOLEEDS SCHOOL OF BUSINESSName: _______________________________Instructions:1. To ensure anonymity when I’m grading, put your name on only page one.2. Be sure your exam has 11 pages.3. For all questions, the companies shown follow U.S. GAAP, which means, of course, that they use the accrual basis. Assume all transactions and amounts are material to the company involved.4. Partial credit will be given only if I can follow your work, so show your calculations on all questions requiring calculations.5. Points allocated to the problems are approximate.6. Good luck.NOTE FROM BUCHMANPROBLEM 5 ON THIS EXAM IS FROM CHAPTER 4,SINCE WE SKIPPED THAT CHAPTER YOU WILL NOT HAVE A QUESTION LIKE IT.For grading use:Problem 1 (20 points): _____Problem 2 (15 points): _____Problem 3 (20 points): _____Problem 4 (10 points): _____Problem 5 (15 points): _____Problem 6 (10 points): _____Problem 7 (10 points): _____Total (100 points)_____Ev-MBAC 6020 Midterm, Spring 2006page 2Problem 1 The March transactions below relate to Sandtrap’s liquor store. State whether or not the transactions result in assets that would appear on the company’s March 31, 2002 balance sheet. If accrual accounting recognizes an asset, state an appropriate account title(s) and the amount of the asset on March 31st. If accrual accounting doesn’t recognize an asset, state why.(a) Sandtrap signs a lease for retail space in a local shopping center for a 20 year term March 1, 2002. Sandtrap pays $120,000, which is a $60,000 damage deposit (refundable at the end of the lease, less any property damage) and rent for the first year of $60,000. By paying for a year in advance, Sandtrap received a substantial reduction in rent.(b) Sandtrap spends $9,000 to paint the store and $15,000 to install new tile on the floor.(c) Sandtrap purchases display counters and shelves with list price of $100,000. She pays for the counters in time to get a 2% discount for prompt payment. Costs to transport the counters from the supplier are $1,200.(d) The store places an order with a wine distributor for wine with a list price of $25,000.(e) The wine ordered in (d) arrives.(f) Sandtrap pays $24,500 for the wine received in “e”. That is full payment, after receiving a $500 discount for early payment.(g) The store receives a phone call from a customer ordering $600 worth of wine for a party the customer will have in April.(h). Sandtrap receives a $100 check as a deposit from another customer for wine the customer wants delivered in April.(i) At the end of March Sandtrap pays $2,000 for newspaper advertising, half of the ads appeared in March and half of the ads will appear on April.Ev-MBAC 6020 Midterm, Spring 2006page 3Problem 2Part A: At The Hungry Toad one night, you are sitting at a table next to a couple of business people who are discussing their company’s financial statements for the quarter which will end this September 30th. They are concerned that the company will not report the income that the president...
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This note was uploaded on 05/31/2008 for the course MBAC 6080 taught by Professor Vossen during the Spring '08 term at Colorado.

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2006 midterm - Ev-MBAC 6020 Midterm, Spring 2006page...

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