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Unformatted text preview: 70-122 Fall 2007 Name_______________Introduction to Accounting Section_____________Professor Nan Mid-term Exam 2Version ASolutionInstructions: This is a close-book, close-notes exam. You are allowed to use a non-programming calculator. There are two required parts with totally 100 points (Part I: 30 points, and Part II: 70 points). Partial credits will be awarded for Part II. 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)(3 in B)1. Villaa Co. issued 35,000 shares of common stock on its IPO on January 1, 2006. On March 3, 2006, Villaa bought back 5,000 shares. The closing price of Villaas common stock was $20 per share on December 31, 2006. Total common shareholders equity on the December 31, 2006 balance sheet was $550,000. Calculate the market-to-book ratio for Villaa at December 31, 2006.A. 0.86 B. 0.92 C. 1.09 D. 1.27(4 in B)2. Which strategy is NOT allowed by GAAP?A. LIFO for financial statements, LIFO for tax purposeB.LIFO for financial statements, FIFO for tax purposeC.FIFO for financial statements, FIFO for tax purposeD. FIFO for financial statements, LIFO for tax purpose(3 in B)3. MorningStar Co. has $10,000 cash, $9,000 inventory, $1,000 prepaid expense, $4,000 marketable securities, $5,000 net accounts receivable, and $15,000 property, plant and equipment. MorningStar Co.s current liabilities are totally $25,000. What is the quick ratio?...
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This note was uploaded on 04/09/2008 for the course ACC 70122 taught by Professor Nam during the Fall '07 term at Carnegie Mellon.
- Fall '07