Q1
Gunawardena Ltd. has a building that it initially bought for $100,000. As of December 31, 2012, there is $10,000 of Accumulated Depreciation on the building (it was being straight-line depreciated over ten years with no salvage value). On 1st January, 2013, the company decides to change the remaining useful life to 5 years (starting now) with a $50,000 salvage value.
Evaluate the depreciation on the building in 2013?
$8,000
$20,000
$13,000
$10,000
$12,500
Q2
Myles Inc.'s Marketable Securities footnote had the subsequent line items:
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Marketable Securities at Dec 31, 2012
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Amortized Cost
|
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Fair Value
|
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Total Trading Securities
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$900
|
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$1,000
|
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Total Available-for-Sale Securities
|
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$4,000
|
|
$3,500
|
|
Total Held-to-Maturity Securities
|
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$1,000
|
|
$1,200
|
|
Total
|
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$5,900
|
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$5,700
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Determine the book value of Marketable Securities on Myles Inc.'s Balance Sheet at December 31, 2012?
$5,700
$5,500
$5,800
$6,100
$5,900
Q3
On 1st January, 2012, Happe Corp. issued a 3-year, 5% coupon, $100,000 face value bond. The bond was priced at an effective interest rate of 8 percent, yielding proceeds of $92,137. This is the first and only bond that Happe has ever issued.
Happe's Statement of Cash Flows for fiscal year 2012 had the subsequent line items:
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|
2012
|
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2011
|
|
Net Income
|
|
$11,500
|
|
$10,350
|
|
Depreciation
|
|
$25,478
|
|
$23,675
|
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Amortization of Bond Discount
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$2,418
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$0
|
What was Happe's Interest Expense on the bond during fiscal year 2012?
$5,000
$2,418
$7,418
$7,371
$8,000
Q4
On 1st January, 2012, Krishnan Ltd. signed a three-year lease on a delivery truck. The lease needs annual payments of $29,103, which are due at the end of each year. Krishnan's managers computed the present value of the lease payments as $75,000 using an effective interest rate of 8 percent. Krishnan had to use capital lease accounting treatment for the truck.
What was the net expense related to this lease during the fiscal year ended December 31, 2012?
$6,000
$31,000
$0
$29,103
$25,000
Q5
Andersen Telecom had the subsequent lines in its Income Taxes footnote:
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Deferred Tax Liabilities
|
|
12/31/2012
|
|
12/31/2011
|
|
Insurance Receivables
|
|
$(60)
|
|
$(63)
|
|
Depreciation
|
|
$(858)
|
|
$(745)
|
|
Other
|
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$(808)
|
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$(883)
|
|
Total Deferred Tax Liabilities
|
|
$(1,726)
|
|
$(1,691)
|
Andersen Telecom had the subsequent lines in its Statement of Cash Flows:
|
|
2012
|
|
2011
|
|
Net Income
|
|
$4,511
|
|
$4,357
|
|
Depreciation
|
|
$1,288
|
|
$1,236
|
Andersen Telecom is a US company with a 35% Federal Statutory Tax Rate. What was Andersen Telecom's depreciation expense for tax purposes in fiscal year 2012?
$1,288
$1,401
$1,175
$965
$1,611
Q6
After completing its preliminary financial statements for 2012, Alexander-Martin Inc. found a mistake in computing its straight-line Depreciation Expense. After fixing the mistake, Alexander-Martin's Depreciation Expense was now $10,000 high. Alexander-Martin is a US company with a 35% Federal Statutory Tax Rate.
How did the $10,000 increase in Depreciation Expense affect remaining Income for 2012?
Net Income dropped by $10,000
Net Income increased by $3,500
Net Income dropped by $6,500
Net Income dropped by $3,500
Net Income increased by $10,000
Q7
Martino Inc.'s Balance Sheet had the subsequent line items:
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Shareholders' Equity
|
|
12/31/2012
|
|
12/31/2011
|
|
Common Stock, par value $1 per share
|
|
$300,000
|
|
$300,000
|
|
(Shares Issued: 300,000 in 2012 and 300,000 in 2011;
|
|
|
|
|
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Shares Outstanding: 250,000 in 2012 and 220,000 in 2011)
|
|
|
|
|
|
Additional Paid in Capital
|
|
$1,750,500
|
|
$1,750,500
|
|
Retained Earnings
|
|
$10,321,123
|
|
$8,675,309
|
|
Treasury Stock
|
|
$(550,000)
|
|
$(800,000)
|
|
Total
|
|
$11,821,623
|
|
$9,925,809
|
What was the average price per share paid by Martino to get all of the treasury shares held as of 31st December, 2012?
Not enough information
$11.00
$10.38
$10.00
$10.50
Q8
For the year ended 12/31/2013, Baumgart Corp. reported remaining Income of $100,000, including $10,000 of Interest Expense on convertible debt. Baumgart had 10,000 common shares outstanding throughout 2013. Baumgart paid $4,000 of preferred dividends during 2013. Baumgart's convertible debt is convertible into 2,000 shares of common stock. Baumgart is a US company with a 35 percent Federal Statutory Tax Rate.
Determine Baumgart Corp.'s Diluted EPS for fiscal year 2013?
$8.83
$7.17
$8.29
$7.46
$8.54