S08_136B_MT1

S08_136B_MT1 - April 23, 2008 Anderson Econ 136B Midterm #1...

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April 23, 2008 Anderson Econ 136B Midterm #1 v. 1 Name _________________________ Complete questions #1-25 (multiple choice) on green scantron and the remaining questions in your blue-book. 1. A note which matures in 6 months from the balance sheet date may be classified as current if management intends to refinance the note with long term terms: a. true if management has either ontained a noncancelable commitment from a lender OR has completed the refinancing before the financial statements are issued. b. only true if management has obtained a noncancelable commitment from a lender. c. only true if management has completed the refinancing before the financial statements are issued. d. true 2. XYZ, Inc. has a note payable due in 6 months. They plan to refinance this note over a 10 year period and are currently negotiating with various banks to accomplish the refinancing. In the event that a suitable refinancing can not be executed, management will sell stock and use those proceeds to fully repay the debt. a. The note should be classified as long term on the balance sheet. b. The note should be classified as current on the balance sheet. c. The note should be classified as equity on the balance sheet. d. The note should be classified as current on the balance sheet until management completes the refinancing. 3. The ability to consummate the refinancing of a short-term obligation may be demonstrated by a. all of these. b. entering into a financing agreement that permits the enterprise to refinance the debt on a long-term basis. c. actually refinancing the obligation by issuing equity securities after the date of the balance sheet but before it is issued. d. actually refinancing the obligation by issuing a long-term obligation after the date of the balance sheet but before it is issued.
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Midterm #1 v. 1--Page 2 4. Debt of $120,000 which matured 4 months after the December 31 balance sheet date was repaid in full 2 months after the balance sheet date, but before the financial statements were issued. Assuming the financial statements are issued March 31 of the subsequent year, how should this debt be presented on the balance sheet as of the balance sheet date? a. No debt outstanding as of the balance sheet date. b. Current debt $120,000 c. Current maturities of long term debt $120,000 d. Long term debt $120,000 5. XYZ, Inc. has purchased an intangible asset which expires in 2 years, but may be automatically renewed at that time for an additional 10 years. XYZ fully expects to renew the intangible upon the two year initial expiration. What period should this intangible be amortized over? a. 12 years b. 2 years c. 10 years d. Do not amortize 6. When a business is acquired for a purchase price which is less than the fair value of all identifiable assets of a business, this should result in: a. Badwill b. Extraordinary gain c. Goodwill d. A non amortizing intangible asset 7. The cost of an intangible asset includes all of the following except a. All of these are included.
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This note was uploaded on 01/31/2010 for the course ECON 136B taught by Professor Anderson during the Spring '08 term at UCSB.

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S08_136B_MT1 - April 23, 2008 Anderson Econ 136B Midterm #1...

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