mid2_s04_q - Name ID Accounting 15 501/516 Spring 2004...

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Name__________________________________________ ID#____________ Accounting 15. 501/516 Spring 2004 Midterm 2 Exam Guidelines 1. Fill in your name above. Exams without names will not be graded. If you do not have an ID number, leave the corresponding space blank. 2 . You are not allowed to refer to any material in answering this exam. 3 . The exam has to be completed in 80 minutes. The total number of points is also 80, so you have approximately 1 point / minute. Budget your time accordingly. 4 . Work in a clear, readable manner. Ample space is provided for every answer. 5 . Write answers in the space provided. Unreadable answers will not be graded. 6 . Show computations for partial credit. 7 . If you feel assumptions are necessary to answer a question, state all assumptions clearly. 8 . Laptops and computers are prohibited. You may use calculators. 9 . Do not fill in the following table. Question Total points Points lost 1: Long-Lived assets 20 2: Marketable Securities 20 3: Long-Term Debt 20 4: Lease 20 Total 80 1
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QUESTION I: PP&E, DEPRECIATION, AND DEFERRED TAXES (20 POINTS) Fabercombie & Itch (F&I) Inc. is a growing retail chain of 57 stores in the U.S. You discover from looking at F&I’s footnotes on long-lived assets that there were new investments in PP&E during 2003 for $100,000. Additional information is available in the company’s December 31, 2003 annual report. The company’s fiscal year ends on December 31 st every year. 2002 2003 Deferred tax liabilities related to PP&E 3,341 4,341 Corporate tax rate 50.0% 50.0% Information from Indirect Statement of Cash Flows Operating activities section: Depreciation expense 30,000 Investing activities section: Net cash outflow from purchases and sale of PP&E -97,205 A. What is the value of cash inflow from asset sales for F&I in 2003? 3 points
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mid2_s04_q - Name ID Accounting 15 501/516 Spring 2004...

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