midterm1-fall07-solution - 70-122 Fall 2007...

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Unformatted text preview: 70-122 Fall 2007 Name_______________Introduction to Accounting Section_____________Professor Nan Mid-term Exam 1-Solution(Version A)Instructions: This is a close-book, close-notes exam. You are allowed to use a non-programming calculator. There are two parts with totally 100 points (Part I : 30 points, and Part II: 70 points). Partial credits will be awarded for Part II. Submit your answers on the pages provided. Make sure your name and section are legible and your answer is neatly presented.Part I: Multiple choice questions. Please circle the right answer (30 points, 3 points each)1. (7 in Version B)Which of the following is NOT a permanent account? A. Prepaid rentB. Depreciation expenseC. Accumulated depreciationD. Unearned revenue2. (1 in version B)Assume a company has total assets of $85,000, non-current assets of $35,000, current liabilities of $22,000 and total stockholders’ equity of $150,000. What is the company’s working capital?A. $28,000B. $63,000C. $13,000D. $150,0003. (6 in version B) How much should Alice invest today if she would like to get $60,000 from her investment in 3 years? Assume the return rate is 10%.A. $37,566 B. $45,079C. $41,322 D. $38,5444. (2 in version B) Skibo Co. purchased a machine at $5,000 on January 1, 2001. The estimated useful life was 7 years and the salvage value was $100. On July 1, 2003, Skibo sold this machine at $3,500. What is the gain/loss from this disposal?A. $500 gain B. $500 lossC. No gain/loss D. $250 gain5. (8 in version B) Cheesecake Factory has a machine with historical cost of $42,000. The useful life of this machine is 10 years and salvage value is $2,000. The current book value of the machine is $20,000. How long has this machine been in service at Cheesecake Factory?...
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midterm1-fall07-solution - 70-122 Fall 2007...

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