Sample Final Exam 4

Sample Final Exam 4 - FI 300 Spring 2009 Final Exam (Sample...

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FI 300 – Spring 2009 Final Exam (Sample Final Exam 4) 1. What should be the primary goal of the managers of a publicly traded corporation? a. To minimize the riskiness of the firm’s expected future cash flows. b. To maximize the yearly profit generated by the firm. c. To maximize shareholder wealth . d. To promote social welfare. e. To make as much money for themselves as possible. 2. Which of the following are the three distinct advantages of a corporation over other forms of organization? a. limited liability, ability to raise capital, immunity from lawsuits b. unlimited liability, ability to raise capital, easy transfer of ownership c. unlimited liability, immunity from taxation, easy transfer of ownership d. limited liability, ability to raise capital, easy transfer of ownership e. limited liability, immunity from taxation, immunity from lawsuits USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING 2 QUESTIONS Tinisha’s Tees, Inc. is a retail company that sells ‘green earth” T-shirts. In 2009, Tinisha’s sold 68,000 T-shirts at a price of $18 per shirt. At the beginning of the fiscal year (on January 1, 2009), Tinisha’s had 8,500 T-shirts in inventory, valued at a cost of $12 per shirt. During the year, Tinisha’s purchased 66,500 T-shirts from their supplier at a cost of $12 per shirt. In 2009, Tinisha’s had operating expenses of $190,000, depreciation expense on $18,000, interest expense of $15,000, taxes of $65,000 and paid dividends of $25,000. 3. What did Tinisha’s Tees, Inc. report as net income (or net profit) for 2009? a. $115,000 b. $120,000 c. $125,000 d. $130,000 e. None of the answers listed above are within $1000 of the correct answer. 4. What did Tinisha’s Tees, Inc. report (in dollars) as the ending inventory on its 2009 balance sheet (i.e., inventory balance on December 31, 2009)? Use average cost valuation, not LIFO or FIFO. a. $66,000 b. $72,000 c. $78,000 d. $84,000 e. None of the answers listed above are within $1000 of the correct answer.
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USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING 2 QUESTIONS Selected data from Quiggley’s financial statements are shown in the table below: Accounts payable 800 Accounts receivable 1,800 Accruals 200 Accumulated depreciation 2,500 Cash 700 COGS 13,000 Common stock at par 1,000 Current portion of long-term debt 400 Inventory (year-end) 2,500 Long-term debt (excluding current portion) 2,200 Net fixed assets 5,000 Notes payable 1,000 Purchases 12,000 Retained earnings 2,600 Using the data in this table, answer questions 5 and 6 below: 5. What did Quiggley report as total current assets on its end of year balance sheet? a.
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Sample Final Exam 4 - FI 300 Spring 2009 Final Exam (Sample...

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