MBUS 300 Final Exam Study Guide
MBUS 300 Final Exam Study Guide MBUS 300
Popular in Managing Financial Resources
Popular in Business
This 9 page Study Guide was uploaded by Aimee Castillon on Wednesday April 27, 2016. The Study Guide belongs to MBUS 300 at George Mason University taught by Reza Rafi in Spring 2016. Since its upload, it has received 318 views. For similar materials see Managing Financial Resources in Business at George Mason University.
Reviews for MBUS 300 Final Exam Study Guide
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 04/27/16
Chapter 6 1. Which of the following would be classified as a longterm operational asset? a. Accounts receivable b. Prepaid insurance c. Office equipment d. inventory 2. Which of the following would not be classified as a tangible longterm asset? a. Delivery trucks b. Trademarks c. Land d. Oil and reserves 3. Which of the following is not classified as Property, Plant & Equipment? a. Computers b. Goodwill c. Machinery d. Office furniture 4. Which of the following terms is used to identify the process of expense recognition for buildings and equipment? a. Amortization b. Depletion c. Depreciation d. Revision 5. Which of the following is an intangible asset with an identifiable useful life? a. Copyrights b. Renewable franchises c. Goodwill d. trademarks 6. Which one of the following would not be classified as an intangible operational asset? a. Patent b. Copyright c. Iron ore deposit d. goodwill 7. Which of the following would be classified as a tangible asset? a. Copyright b. Goodwill c. Timber reserves d. patent 8. Zabinski Co. paid $150,000 for a purchase that included land, building, and office furniture. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: land = $20,000; building = $150,000; and office furniture = $30,000. Based on this information the cost that would be allocated to land is a. $17,500 b. $20,000 c. $25,000 d. $15,000 9. Mobley Company purchased an asset with a list price of $35,000. Mobley received a 2% cash discount. The asset was delivered under terms FOB shipping point, and freight costs amounted to $700. Mobley paid $1500 to have the asset installed. Insurance costs to protect the asset from fire and theft amounted to $400 for the first year of operations. Based on this information, the cost recorded in the asset account would be a. $36,500 b. $36,900 c. $35,000 d. $35,800 10. On 1/1/14, Rugh Company purchased equipment with a list price of $12,000 with a 2% cash discount. The equipment was delivered under terms of FOB destination and freight cost amounted to $400. A total of $1000 was paid for installation and testing. During the first year, Rugh uses th unitsofproduction metho of depreciation. Useful life is estimated at 5 years or 300,000 units and estimated salvage value is $2000. During 2014, the equipment produced 60,000 units. What is the amount of depreciation for 2014? a. $2152 b. $2352 c. $2552 d. $2632 11. The Black Limo Company (BLC) purchased a limo on January 1 of Year 1. The limo cost $48,000. It had an expected useful life of 4 years and a $8000 salvage value. Assuming BLC uses doubledecliningbalancedepreciation, depreciation expense for Year 2 is a. $ 24000 b. $ 12000 c. $ 10000 d. $ 20000 12. Which of financial statements would be affected by the recognition of cash paid for a capital expenditure that improves the quality of an existing assStatement of cash flow and balance sheet 13. A capital expenditure that extends the useful life of a building will increase the book value of the building and decrease the amount of the balance in the Accumulated Depreciation account 14. When a company recognizes depreciation expense, the amount of total assets shown on the balance sheet decreases and the balance in the Accumulated Depreciation account increases . 15. Which of financial statements would be affected by the recognition of cash paid for a capital expenditure that increases the useful life of an existing asStatement of cash flow and balance sheet 16. A capital expenditure that improves the quality of a building will increase the amount of the balance in the Building account and show on the statement of cash flows as an outflow for investing activities 17. At the end of the useful life of an asset all depreciation methods will produce the ame total amount of depreciation expense and same total amount of accumulated depreciation Chapter 9 1. Darden Company has cash of $40,000, accounts receivable of $60,000, inventory of $32,000, and equipment of $100,000. Assuming current liabilities of $48,000, this company’s working capital is: a. $12,000 b. $52,000 c. $144,000 d. $84,000 Refer to the following table for 23 Assets Cash $5400 Accounts receivable 15,500 Inventory 18,000 Prepaid expenses 1600 Plant and equipment, net of depreciation 20,200 Land 19,950 Total Assets 80,650 Liabilities and Stockholders’ Equity Accounts payable 4500 Salaries payable 11500 Bonds payable (due in 2010) 19000 Common stock; repair 30,000 Retained earnings 15,650 Total liabilities and stockholders’ 80,650 equity 2. What is the company’s quick (acidtest) ratio? a. 0.7 b. 1.4 c. 1.3 d. 3.8 3. What is the company’s current ratio? a. 1.16 b. 1.31 c. 2.53 d. 3.79 4. The following balance sheet information was provided by O’Connor Company: Assets 2014 2013 Cash $4000 $2000 Accounts receivable 15,000 12,000 Inventory $35,000 $38,000 Assuming that net credit sales for the year 2014 totaled $270,000, what is the company’s recent accounts receivable turnover? a. 18 times b. 20 times c. 22.5 times d. 7.7 times 5. Refer to the table above. Assuming 2014 cost of goods sold is $153,000 what is the company’s Inventory turnover a. 4.0 times b. 4.4 times c. 4.2 times d. None of the above 6. The Poole Company reported the following income for 2014: Sales $30,000 Cost of goods sold 8000 Gross margin $22,000 Selling and administrative expenses 10,000 Operating income $12,000 Interest expense 4000 Income before taxes $8000 Income tax expense 2500 Net income 5500 What is the company’s net margin? a. 73% b. 40% c. 18% 7. Assuming a company has sales of $500,000, total assets of $1 million, gross margin of $350,000, selling expenses of $210,000, and net income of $21,000. If it is performing vertical analysis, what percentage would be assigned to selling expenses? a. 10% b. 60% c. 21% d. 42% 8. Comparing two companies’ earnings per share ratios can be made more difficult because different companies can use different estimates of future bad debt, different companies can use different cost flow assumptions for merchandise inventory, and different companies can use different methods of depreciation. 9. Decrease in the amount of preferred stock dividends a company has to pay, decrease in the number of shares of outstanding common stock, and increase in net income would cause a company’s earnings per share to increase 10. Milton Company has total current assets of $46,000, including inventory of $10,000, and current liabilities of $20,000. The company's current ratio is: a. 0.4 b. 1.8 c. 2.8 d. 2.3 ((cash + accounts receivable) / (accounts payable + Salaries payable)) Chapter 10 1. For a manufacturing company, product costs includes all of the following except: a. Indirect material cost b. Warehouse cost c. Direct labor cost d. All of these are product costs 2. During its first year of operations, Connor Company paid $50,000 for direct materials and $36,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $14,000. General, selling, and administrative expenses were $16,000. The company produced 5000 units and sold 4000 units for $30.00 a unit. The average cost to produce one unit is a. $20 ((direct materials + wages + lease) / units produced) b. $16 c. $18.40 d. $25 3. During its first year of operations, Forrest Company paid $30,000 for direct materials and $50,000 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $15,000. General, selling, and administrative expenses were $20,000. The average cost to produce one unit was $2.50. How many units were produced during the period? a. 40,000 b. 46,000 c. 38,000 ((direct materials + wages + lease) / $2.50) d. None of these 4. Which of the following transactions would cause net income for the period to decrease? a. Paid $2500 cash for raw material cost b. Purchased $8000 of merchandise inventory c. Recorded $5000 of depreciation on production equipment d. Paid $2000 for production supplies 5. During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 in wages for production workers’ wages. Lease payments and utilities on the production facilities amounted to $17,000, while general, selling, and administrative expenses were $8,000. The company produced 5000 units and sold 3000 units for $15.00 a unit. What is Silverman’s cost of goods sold for the year? a. $50,000 b. $24,600 c. $30,000 i. (Product cost / # unit produced) x unit sold d. $41,000 6. During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 in wages for production workers’ wages. Lease payments and utilities on the production facilities amounted to $17,000, while general, selling, and administrative expenses were $8,000. The company produced 5000 units and sold 3000 units for $15.00 a unit. What is gross margin for the first year? a. $15000 b. $24000 c. $20000 d. $45000 7. Paying production workers with cash results iecreased operating cash flow (everything else is left intact) 8. Paying salaries and administrative costs with cash resultdecreased stockholders’ equity, decreased cash, and decreased net income 9. How does a company record a manufacturing cost? Decrease the cash account and increase inventory account. 10. Manufacturing product costs includanufacturing overhead cost, direct materials, and direct labor 11. Purchasing materials with casdecreases operating cash flow 12. Recognizing depreciation expense on selling and administrative assets results in decreased stockholders’ equity, decreased total assets, and decreased net income 13. Cash and inventory accounts a re affected when a company pays cash for a manufacturing cost Chapter 12 1. Which of the following statements is true? a. Indirect costs can easily be traced to a cost object; direct costs cannot be easily traced to a cost object b. Both direct and indirect costs can easily be traced to a cost object c. Neither direct nor indirect costs are easily traced to a cost object d. Direct costs can be traced easily to a cost object, but indirect costs cannot be easily traced to a cost object 2. Overhead costs are only indirect costs 3. Marsden Company has 3 departments occupying the following amount of floor space: Department 1 15,000 sq. feet Department 2 10,000 sq. feet Department 3 25,000 sq. feet How much store rent should be allocated to Department 3 if the total rent is $200,000? a. $100,000 (Add everything together, divide by $200,000, and then multiply that number by department 3 number) b. $50,000 c. $66,667 d. None of the above 4. The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $8 million to maintain its railroad track. Pertinent data for the two divisions are as follows: Western Division 800,000 miles Pacific Division 1,200,000 miles The amount of track improvement cost that should be allocated to the Western Division is: a. $4 million b. $3,200,000 (add both miles together, divide by 8 million, and then multiply that number by Western Division miles) c. $800,000 d. $5,333,333 5. At the beginning of the year, Rangle Company expected to incur $54,000 of overhead costs in producing 6000 units of product. The direct material cost is $20 per unit of product. Direct labor cost of $30 per unit. During January, 600 units were produced. The total cost of the units made in January was: a. $30,000 b. $5,400 c. $35,400 (($54000/6000) + $50) x 600 d. None of the above Chapter 16 1. What amount of cash must be invested today in order to have $60,000 at the end of one year assuming the rate of is 9%? a. $45,454.56 b. $54,000.00 c. $55,045.88 d. $54,600.00 2. What amount of cash would result at the end of one year, if $15,000 is invested today and the rate of return is 8% a. $16200 b. $ 13889 c. $ 15000 d. $ 1200 3. Ashley projects that she can get $100,000 cash per year for 5 years on a real estate investment project. If Ashley wants to earn a rate of return of 12%, what is the maximum that she should pay for the investment? a. $56,743 b. $446,429 c. $360,478 d. $560,000 4. Jiminez Company has 2 investment opportunities. Both investments cost $5000 and will provide the following net cash flows: Year Investment A Investment B 1 $3000 $3000 2 $3000 4000 3 $3000 2000 4 $3000 1000 The total present value of Investment A’s cash flows, assuming an 8% minimum rate of return, is: a. $14,936 b. $4936 (use PV of $1 table to find PV factors for each year (n=1...1=4), then multiply those values with the cash flows, add them all together and then subtract by investment c. $7000 5. Square footage used by department in building and number of employees working in the department are not good volume cost drivers to allocate overhead costs. 6. Assuming a $1000 initial investment, what is the payback period? Cash flow are as follows: Year 1: $200 Year 2: $300 Year 3: $100 Year 4: $400 a. 3 years b. 4 years c. 1 year d. 2 years 7. Sally wants to retire in 5 years. She wants to live on $100,000 per year and she will stay retired for 40 years. She thinks that her retirement funds can earn 12% per year. If she takes her first annual check in exactly five years, how much does she need to deposit today to accomplish her goal? a. $467,753 b. $46,775 c. $52,389 d. $523,893 8. Slick Bob will sell you a TV for $10,000. The deal is you pay for the TV in five equal annual payments that include interest at 2%. You called the bank and they said they would charge you 10% for a similar loan. How much are the payments if you take Slick Bob’s deal? a. $2374.17 b. $2637. 97 c. $2,000.00 d. $2,121.57
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'