Acc124Exam2Fall2003

Acc124Exam2Fall2003 - NAME EXAM#2 20 22 Summary of Exam...

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NAME____________________ EXAM #2 November 12, 2003 Summary of Exam Content Question Type Point Value Multiple Choice (on PageOut) 25 Problem 1 – Investments 20 Problem 2 – Revenue Recognition 20 Problem 3 – Deferred Taxes 20 Problem 4 – Leases 15 Total 100 EXAM #2 / FALL 2003 / 1
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NAME____________________ PROBLEM 1 – Investments (20 Points) During the course of your examination of the financial statements of Simpson Corporation for the year ended December 31, 2004, you found a new account, "Investments." Your examination revealed that during 2004, Simpson began a program of investments, and all investment-related transactions were entered in this account. Your analysis of this account for 2004 follows: Simpson Corporation Analysis of Investments For the Year Ended December 31, 2004 Pinson Company Common Stock Feb. 14 Purchased 1,000 shares @ $55 per share, plus brokerage fees of $2,310. July 26 Received 100 shares of Pinson Company common stock as a stock dividend. Sept. 28 Sold the 100 shares of Pinson Company common stock received July 26 for $68 per share, less $340 in taxes and transfer fees. Watts Inc., Common Stock Apr. 30 Purchased 500 shares @ $40 per share, plus fees of $900. Oct. 28 Received cash dividend of $1.20 per share. Additional information: 1. The fair value for each security as of the 2004 date of each transaction follow: Security Feb. 14 Apr. 30 July 26 Sept. 28 Dec. 31 Pinson Co. $55 $62 $70 $72 Watts Inc. $40 $32 2. All of the investments of Simpson are nominal in respect to percentage of ownership
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Acc124Exam2Fall2003 - NAME EXAM#2 20 22 Summary of Exam...

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