306 chapter 2 take home quiz - Chapter 2 Take Home Quiz...

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Chapter 2 Take Home Quiz Questions Fall 2009 30 points: Answers will be due in class on Tuesday, September 22. 1. On January 1, 2008, Tuft Company paid $3,600 for a 36-month fire insurance premium. The company has a six-month normal operating cycle. On the company’s December 31, 2008, balance sheet, what amount should be reported for prepaid insurance under current assets? A. $1,800. B. $1,200. C. $ 600. D. $2,400. 2. On Tilt Inc.’s December 31, 2008, balance sheet, a note receivable was properly reported as a noncurrent asset, and its interest receivable for eight months was properly reported as a current asset. Interest on Tilt’s note receivable is received annually. Which of the following terms would fit Tilt’s note receivable? 3. A firm using straight-line depreciation reported the following information: Cost of fixed assets as of December 31, 2008, $80 million; Accumulated depreciation as of December 31, 2008, $45 million; Depreciation expense for 2008 of $5 million. The average age of the fixed assets is: 4. Refer to the previous question. What is the average depreciable life of the fixed assets? 5. Restructuring costs can also be referred to as A. down sizing costs. B. right sizing costs. C. Both A and B. D. Neither A nor B.
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6. On Norbert Inc.'s income statement for the year ended December 31, 2007, net sales were originally reported at $2,760,000. In the annual report that you received from Norbert for the year ended December 31, 2008, you noticed that net sales for 2007 are reported at $2,450,000. As a sophisticated user of financial statements, you determine that, during 2008, Norbert most likely
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