2007_-_Summer_Test__2 - University of Toronto Joseph L....

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University of Toronto Joseph L. Rotman School of Management June 14, 2007 MGT120 H1S Financial Accounting I Duration: 1 hour, 50 minutes Aids allowed: Non-programmable calculator Instructions: Please print your name and student number in the spaces provided below There are ten multiple choice questions and four problems. Please use the space provided below for your answer to the multiple choice questions. You must use a pen. Do not use WHITEOUT . Clearly show all computations in order to obtain full marks for the problems. Tests written in pencil will not be considered for remarking. If you are requesting a remark, include a note telling specifically why you feel you deserve more marks. The entire paper will be remarked, marks may go up, down or remain the same. ------------------------------------------------ -------------------------------------------- - Student name (LAST NAME FIRST) Student number Marks : Answers to the Multiple Choice Questions Part A (10 marks) 1.______ 6.______ Part B (10 marks) 2.______ 7.______ Part C ( 8 marks) 3.______ 8.______ Part D ( 9 marks) 4.______ 9.______ Part E ( 8 marks) 5.______ 10._____ Total ( 45 marks)
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Part A (10 marks) 1. Long Co. purchased machinery on January 2, 2000, for $660,000. The straight-line method is used and useful life is estimated to be ten years, with a $60,000 residual value. At the beginning of 2006, Long spent $144,000 to overhaul the machinery. After the overhaul, Long estimated that the useful life would be extended four years (14 years total), and the residual value would be $30,000. The amortization expense for 2006 should be a) $42,375. b) $51,750. c) $60,000. d) $55,500. 2. The following information was available from the inventory records of Lear Company for January: Units Unit Cost Total Cost Balance at January 1 3,000 $9.77 $29,310 Purchases: January 6 2,000 10.30 20,600 January 26 2,700 10.71 28,917 Sales: January 7 (2,500) January 31 (4,200 ) Balance at January 31 1,000 Assuming that Lear does not maintain perpetual inventory records, what should be the
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2007_-_Summer_Test__2 - University of Toronto Joseph L....

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