Midterm Exam 2 Soln

Midterm Exam 2 Soln - Name Section: Spring 2011 Midterm...

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Name Section: Spring 2011 Midterm Exam 2 Tentative Solution Management 351 1. This exam consists of 20 multiple choice items and 5 problems (with several parts each). The exam is 11 pages, plus this cover page. Please check to see that your exam document is complete. The point value for each type of problem is: A. MULTIPLE CHOICE 80 points B. NUMERICAL 70 points TOTAL POINTS 150 points 2. You have 1.5 hours to complete this exam. At the end of the 90 minutes, please give me your exam document. It is important that all students cooperate in promptly turning in the exams to insure that no student has any advantage over another. 3. This exam is closed book, closed notes, no laptop--you may use your own calculator. 4. Show all of your calculations when solving numerical and essay problems. Correct answers to numerical and essay problems which are not accompanied by work indicating how the answer was derived will not receive any credit. Even if the answer can be computed in your head, indicate your thought process on paper. Partial credit will be given only where the logic and handwriting can be easily followed . 5. If you think that an additional assumption is necessary to complete a problem, clearly state your extra assumption and continue working the problem. As long as your assumption does not contradict information in the problem and is plausible/justifiable, your answer will be graded using that assumption. 6. If you have a question, please come and ask me Remember: Cash + ∆ Other Assets = CL + NCL + PIC + BRE + R – X + G – L - D
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A. (80 points) MULTIPLE CHOICE ITEMS 1. The relationship between the amount funded and the amount reported for pension expense is as follows: a. pension expense must equal the amount funded. b. pension expense will be less than the amount funded. c. pension expense will be more than the amount funded. d. pension expense may be greater than, equal to, or less than the amount funded. D 2. One component of pension expense is expected return on plan assets. Plan assets include a. contributions made by the employer and contributions made by the employee when a contributory plan of some type is involved. b. plan assets still under the control of the company. c. only assets reported on the balance sheet of the employer as prepaid pension cost. d. none of these. A 3. A corporation has a defined-benefit plan. A pension liability will result at the end of the year if the a. projected benefit obligation exceeds the fair value of the plan assets. b. fair value of the plan assets exceeds the projected benefit obligation. c. amount of employer contributions exceeds the pension expense. d. amount of pension expense exceeds the amount of employer contributions. A
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Midterm Exam 2 Soln - Name Section: Spring 2011 Midterm...

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