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Midterm Exam 2 Soln-S09

Midterm Exam 2 Soln-S09 - M351 Student Chosen ID Section...

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M351 Student Chosen ID Section: Midterm 2 Tentative Solution Management 351 Spring 2009 1. This exam consists of 9 multiple choice items and 6 problems (with several parts each). The exam is 16 pages plus this cover page. Please check to see that your exam document is complete. The point value for each type of problem is: A. MULTIPLE CHOICE 27 points B. NUMERICAL AND ESSAY PROBLEMS 123 points TOTAL POINTS 150 points 2. You have 1.5 hours to complete this exam. At the end of the 90 minutes, please give me your exam document. It is important that all students cooperate in promptly turning in the exams to insure that no student has any advantage over another. 3. This exam is closed book, closed notes, no laptop--you may use your own calculator. 4. Show all of your calculations when solving numerical and essay problems. Correct answers to numerical and essay problems which are not accompanied by work indicating how the answer was derived will not receive any credit. Even if the answer can be computed in your head, indicate your thought process on paper. Partial credit will be given only where the logic and handwriting can be easily followed . 5. If you think that an additional assumption is necessary to complete a problem, clearly state your extra assumption and continue working the problem. As long as your assumption does not contradict information in the problem and is plausible/justifiable, your answer will be graded using that assumption. 6. If you have a question, please come and ask me Remember: Cash + ∆ Other Assets = L + C/S + R – X + G – L – D
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A. (30 points) MULTIPLE CHOICE ITEMS 1. Stockholders of a business enterprise are said to be the residual owners. The term residual owner means that shareholders a. are entitled to a dividend every year in which the business earns a profit. b. have the rights to specific assets of the business. c. bear the ultimate risks and uncertainties and receive the benefits of enterprise ownership. d. can negotiate individual contracts on behalf of the enterprise. C 2. In January 2007, Cure Corporation, a newly formed company, issued 10,000 shares of its $10 par common stock for $15 per share. On July 1, 2007, Cure Corporation reacquired 1,000 shares of its outstanding stock for $12 per share. The acquisition of these treasury shares a. decreased total stockholders' equity. b. increased total stockholders' equity. c. did not change total stockholders' equity. d. decreased the number of issued shares. A 3. Wilson Corp. purchased its own par value stock on January 1, 2007 for $20,000 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $12,000. The $8,000 difference between the cost and sales price should be recorded as a deduction from a. additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings. b.
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Midterm Exam 2 Soln-S09 - M351 Student Chosen ID Section...

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