Question 1
The Boston Chung Company has a building that it originally 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 10 years with no salvage value). On January 1, 2013, Boston Chung decides to change the remaining useful life to 5 years (starting now) with a $50,000 salvage value.
What will be the depreciation on the building in 2013?
$8,000
$10,000
$13,000
$12,500
$20,000
Question 2
Ankit Inc.'s Marketable Securities footnote had the following line items:
Marketable Securities at Dec 31, 2012 Amortized Cost Fair Value
Total Trading Securities $900 $1,000
Total Available-for-Sale Securities $4,000 $3,500
Total Held-to-Maturity Securities $1,000 $1,200
Total $5,900 $5,700
What is the book value of Marketable Securities on Ankit Inc.'s Balance Sheet at December 31, 2012?
$6,100
$5,900
$5,700
$5,500
$5,800
Question 3
On January 1, 2012, King John Corp. issued a 3-year, 5% coupon, $100,000 face value bond. The bond was priced at an effective interest rate of 8%, yielding proceeds of $92,137. This is the first and only bond that King John has ever issued.
King John's Statement of Cash Flows for fiscal year 2012 had the following line items:
2012 2011
Net Income $11,500 $10,350
Depreciation $25,478 $23,675
Amortization of Bond Discount $2,418 $0
What was King John's Interest Expense on the bond during fiscal year 2012?
$5,000
$2,418
$7,418
$7,371
$8,000
Question 4
On January 1, 2012, Tanenwee Ltd. signed a three-year lease on a delivery truck. The lease requires annual payments of $29,103, which are due at the end of each year. Tanenwee's managers computed the present value of the lease payments as $75,000 using an effective interest rate of 8%. Tanenwee had to use capital lease accounting treatment for the truck.
What was the total expense related to this lease during the fiscal year ended December 31, 2012?
$6,000
$29,103
$25,000
$31,000
$0
Question 5
Byant Telecom had the following lines in its Income Taxes footnote:
Deferred Tax Liabilities 12/31/2012 12/31/2011
Insurance Receivables $(60) $(63)
Depreciation $(858) $(745)
Other $(808) $(883)
Total Deferred Tax Liabilities $(1,726) $(1,691)
Bryant Telecom had the following lines in its Statement of Cash Flows:
2012 2011
Net Income $4,511 $4,357
Depreciation $1,288 $1,236
Bryant Telecom is a US company with a 35% Federal Statutory Tax Rate. What was Bryant Telecom's depreciation expense for tax purposes in fiscal year 2012?
$1,288
$1,401
$1,175
$1,611
$965
Question 6
After completing its preliminary financial statements for 2012, Alibasic Shipping Inc. found a mistake in computing its straight-line Depreciation Expense. After fixing the mistake, Alibasic Shipping's Depreciation Expense was now $10,000 higher. Alibasic Shipping is a US company with a 35% Federal Statutory Tax Rate.
How did the $10,000 increase in Depreciation Expense affect Net Income for 2012?
Net Income dropped by $6,500
Net Income dropped by $3,500
Net Income increased by $10,000
Net Income increased by $3,500
Net Income dropped by $10,000
Question 7
Yañez Inc.'s Balance Sheet had the following line items:
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;
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 Yañez to acquire all of the treasury shares held as of December 31, 2012?
$10.00
$10.50
Not enough information
$11.00
$10.38
Question 8
For the year ended 12/31/2013, Anonymous Corp. reported Net Income of $100,000, including $10,000 of Interest Expense on convertible debt. Anonymous had 10,000 common shares outstanding throughout 2013. Anonymous paid $4,000 of preferred dividends during 2013. Anonymous' convertible debt is convertible into 2,000 shares of common stock. Anonymous is a US company with a 35% Federal Statutory Tax Rate.
What is Anonymous Corp.'s Diluted EPS for fiscal year 2013?
$8.54
$8.83
$7.17
$8.29
$7.46