Final-2005-Solutions

Final-2005-Solutions - NAME STUDENT No RECITATION SECTION...

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1 NAME: STUDENT No.: RECITATION SECTION: ACCOUNTING 101, FINAL EXAMINATION Fall Semester, 2005 INSTRUCTIONS: 1. There are 12 numbered pages in this booklet. There is one additional booklet containing the financial statement information for The Home Depot (19 pages) and present value tables. Fiscal 2004 refers to the year ended January 30, 2005 . 2. Please print your name and student number in the space provided on top of this page AND on all subsequent pages . 3. This is a 77 point exam. You have 120 minutes to complete it. Budget your time to achieve maximum points. 4. Answer the problems in the space provided within this booklet . Present your work in an orderly fashion to facilitate the awarding of partial credit. For partial credit, you must show your work. Partial credit can only be given for work that is presented in a clear, legible and logical manner. 5. In the interest of fairness to all students, NO questions will be answered during the exam. If you think a question is ambiguous, state an appropriate assumption explicitly and continue. 6. The exam is closed book. You are allowed only ONE 8.5 x 11 inch double-sided sheet of paper for notes. 7. Use the assumptions given in each question for the solution of that question only. Ignore the assumptions provided in the other questions. Part Points Allocated Points Scored I 12 II 18 III 14 IV 15 V 18 Total 77
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2 Part I – 12 points Assume that the only investment account that Home Depot has is short term investments and there are no foreign currency translation adjustments or merger, acquisition and divestiture activity related to this account and that all short term investment purchases and sales are made with cash. Answers in millions of dollars except for ratios (all rounded to 2 decimal places where appropriate). 1. Record the journal entry that Home Depot made for the acquisition of new short term investments during fiscal 2004. (3 points) Account title Debit Credit Short Term Investments 25890 Cash 25890 2. Record the journal entry that Home Depot recorded for any unrealized gains/losses related to short term investments during fiscal 2004. (3 points) Account title Debit Credit NONE – there is no comprehensive income related to these securities and they were classified as available for sale 3. Record the journal entry related to the sale and maturities of short term investments for the fiscal 2004 year including any realized gains/losses. (3 points). Account title Debit Credit Cash 25990 Short Term Investments 25980 Gain on Sale (Realized) 10 Given our assumptions above there is no gain or loss as the STI account balances with the sale and the purchase exactly
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3 4. Using a current ratio how has the liquidity of Home Depot changed from fiscal 2003 to fiscal 2004 (i.e., has it improved or worsened)? (3 points) Current ratio = current assets/current liabilities Fiscal year 2004 2003
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This note was uploaded on 05/20/2010 for the course ACCT 101 taught by Professor Briancadman during the Spring '10 term at Penn College.

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Final-2005-Solutions - NAME STUDENT No RECITATION SECTION...

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