ADM3340_F08_MidTermExamSol - Mid Term Exam Intermediate...

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ADM3340 Fall 2008 Midterm Examination Suggested Solutions 1/12 Mid Term Exam Intermediate Financial Accounting II Fall 2008 ADM3340 (SUGGESTED SOLUTIONS) N a m e : I D # : Instructions : 1. Write your name and student ID number above. 2. Turn off all cell phones. 2. This examination “SUGGESTED SOLUTION” comprises 3 questions over 12 numbered pages. Answer all questions in this booklet. Booklet is not to be removed from the examination room. You may not separate the pages. 3. Limit your answer to the space provided. Blank sheets for rough work and supporting calculations are given at the end of each question. 4. This exam is out of 75 marks and is 2½ hours long. You should budget approximately 2 minutes per mark. 5. Please do not ask the invigilator or the professor any questions, as they will not be answered. State reasonable assumptions, if you feel they are necessary. 6. Present value tables are provided on page 12 . 7. Language (non-electronic) dictionaries are allowed. 8. You mus t sign the Statement of Academic integrity on page 2 of this exam. Question Marks 1 Investments /25 2 Liabilities /25 3 Shareholders Equity /25 TOTAL /75
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ADM3340 Fall 2008 Midterm Examination Suggested Solutions 2/12 Statement of Academic Integrity The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of another student. Without limiting the generality of this definition, academic fraud occurs when a student commits any of the following offences: plagiarism or cheating of any kind, use of books, notes, mathematical tables, dictionaries or other study aid unless an explicit written note to the contrary appears on the exam, to have in his/her possession cameras, radios (radios with head sets), tape recorders, pagers, cell phones, or any other communication device which has not been previously authorized in writing. Statement to be signed by the student: I have read the text on academic integrity and I pledge not to have committed or attempted to commit academic fraud in this examination. Signed:______________________________________ Note: an examination copy or booklet without that signed statement will not be graded and will receive a final exam grade of zero.
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ADM3340 Fall 2008 Midterm Examination Suggested Solutions 3/12 QUESTION 1 (25 marks) Answer BOTH parts to this question. Each part is independent. PART 1 : (10 marks) To earn returns on its excess cash and to minimize risk, Tupelo Corporation invests its excess cash in investment-grade corporate bonds. Tupelo has a December 31 accounting year-end. The following describes the events surrounding one of Tupelo’s recent investments: 1. On March 1, 2007, Tupelo paid $500,000 to purchase bonds of Branson Inc. These bonds had a face value of $500,000 and pay interest on December 31 at the rate of 6.5%. Tupelo incurred transaction costs of $3,000 and capitalizes such costs where permitted under current Canadian accounting standards. 2.
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This note was uploaded on 01/07/2010 for the course ACCOUNTING adm3340 taught by Professor Collier during the Fall '09 term at University of Ottawa.

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ADM3340_F08_MidTermExamSol - Mid Term Exam Intermediate...

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