Midterm 2-2008 Financials

Midterm 2-2008 Financials - Name Accounting 101 Fall 2008...

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Name: Accounting 101, Fall 2008 1 Name: PENN ID: _________________________ _ ACCOUNTING 101, EXAM #2 Fall Semester, 2008 Instructions: 1. There are 19 numbered pages in this booklet. Make sure you have all the pages before you begin. 2. Please print your name and student number at the top of this page. Also print your name on all subsequent pages. 3. This exam has 90 total points. You have 120 minutes to complete the exam so please budget your time accordingly. 4. Answer the problems in the space provided within this booklet. Present your work in an orderly fashion to facilitate the awarding of partial credit for certain questions. In order to receive partial credit, you must show your work. Partial credit can only be awarded for work that is presented in a clear, legible, and logical manner. 5. In the interest of fairness to all students, NO questions will be answered during the exam. If you think a question is ambiguous, explicitly state an appropriate assumption and continue with the question. 6. The exam is closed book and the use of a laptop computer is prohibited. You are permitted to use ONE double-sided 8 ½ x 11 inch reference sheet. You are also permitted to use a calculator. 7. Exams written in pencil will not be considered for a re-grade. Use a pen if you think you might submit your exam for a re-grade request. Question Points Allocated Points Earned 1 20 2 11 3 20 4 23 5 16
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Name: Accounting 101, Fall 2008 2 Question 1 – Multiple Choice (20 points) 1. Warren Company plans to depreciate a new building using declining-balance depreciation with a 200 percent acceleration rate. The building cost $800,000. The estimated residual value of the building is $50,000 and it has an expected useful life of 25 years. Assuming the first year's depreciation expense was recorded properly, what would be the amount of depreciation expense for the second year? A) $30,720. B) $32,000. C) $58,880. D) $64,000. E) None of the above is correct. 2. Roberts Company sold equipment for $250,000, purchased a building for $6,500,000, sold shares in Peter Company for $280,000, purchased $500,000 of inventory and repaid a note payable for $2,300,000 plus $230,000 of interest. The net cash flow from investing activities was 3. The financial statements of Madison Company show the following: Sales, net of bad debt expense, return allowances and discounts: $154,000 Beginning Balance Ending Balance Accounts Receivable, net $22,000 $28,000 Accounts Payable 21,000 25,000 Madison operates only in the U.S. and was not involved in any mergers or acquisitions during the year. Cash collected from customers is
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Name: Accounting 101, Fall 2008 3
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