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Unformatted text preview: M351 Student Chosen ID Section: Final Exam Tentative Solution Management 351 Spring 2009 1. This exam consists of 10 multiple choice items and 6 problems (with several parts each). The exam is 19 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 30 points B. NUMERICAL AND ESSAY PROBLEMS 170 points TOTAL POINTS 200 points 2. You have 2 hours to complete this exam. At the end of the 2 hours, 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 + PIC + R X + G L D A. (30 points) MULTIPLE CHOICE ITEMS 1. Debt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses and are included as other comprehensive income and as a separate component of stockholders' equity are a. held-to-maturity debt securities. b. trading debt securities. c. available-for-sale debt securities. d. never-sell debt securities. C 2. Bista Corporation declares and distributes a cash dividend that is a result of current earnings. How will the receipt of those dividends affect the investment account of the investor under each of the following accounting methods? Fair Value Method Equity Method a. No Effect Decrease b. Increase Decrease c. No Effect No Effect d. Decrease No Effect A 3. When an investment in an available-for-sale security is transferred to trading because the company anticipates selling the stock in the near future, the carrying value assigned to the investment upon entering it in the trading portfolio should be a. its original cost. b. its fair value at the date of the transfer. c. the higher of its original cost or its fair value at the date of the transfer....
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- Fall '08