mid3-2008 Fall - UGBA102A EXAM 3 FALL 2008 Multiple choice...

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UGBA102A EXAM 3 FALL 2008 Multiple choice (30) NAME: Problem 1 (24) SID: Problem 2 (14) Problem 3 (18) GSI: Problem 4 (14) TOTAL MULTIPLE CHOICE (3 points each) – Put the correct answer on the scantron sheet: 1. The amount of federal income tax that is withheld from employees' paychecks by the employer should A) be recorded as a current liability. B) be recorded as an asset. C) be recorded as revenue. D) not be recorded on the employer's books. E) be recorded as a long-term liability. 2. Apple Inc. is involved in a lawsuit, which has not been settled. It is probable that the jury will find in favor of the plaintiff and Apple Inc. will owe the plaintiff $10 million. How should Apple Inc. account for this lawsuit? A) No disclosure is necessary. B) Record a loss for $10 million. C) Disclose the lawsuit in the footnotes. D) Record a gain for $10 million. E) Reduce cash by $10 million. 3. On July 1, 2008, Blitzer Inc. signed a one-year, 6% interest-bearing note payable for $5,000. Blitzer Inc. has a December 31 yearend. The amount of interest expense that should be reported in the 2008 income statement for this note (rounded to the nearest dollar) would be A) $300 B) $200 C) $150 D) $ 25 E) $ 0 Page 1 of 7
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UGBA102A EXAM 3 FALL 2008 4. All of the following are considered as rights of common stockholders except for A) voting. B) dividends. C) residual claim. D) continuous life. E) preemptive right. 5. A company has a balance in common stock of $250,000, additional paid-in capital of $2,000,000, retained earnings of $6,000,000 and a par value per share of common stock of $1.00. They declare and issue a 6-to-5 stock split when the market price per share is $10. Which of the following is true after the stock split? A) The number of shares of common stock outstanding will increase to 300,000.
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mid3-2008 Fall - UGBA102A EXAM 3 FALL 2008 Multiple choice...

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