York University Ap/Adms 2500.03
Introduction to Financial Accounting
Midterm Examination #2 - Test Form A
Time: 3.0 hours
Summer 2010
Questions: 50
Instructions:
1' Submit: only the pink mark sense sheet will be collected:
you may keep this midterm examination paper. Mark your answers
on it for later
reference.
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3.
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4
function computers to the exam in case one fails. Be prepared
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' careful budgeting of time on an accounting exam is essential. Bring a watch and check your progress regularly. poor time management is
the most common reason for poor exam performance
in accounting.
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be scored based on questions attempted.
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5.
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,"pr"r"nt a frequent correct choice to questions.
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Administrative Studies the next dav.
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the exam.
a
of zero recorded for
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You are reminded that cheating is a serious offense which can result
in expulsion from university ,
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during exams' First instance of wandering eyes has the student
relocated to the front of the room. Second instance results in
seizure of paper.
Questions
i
to 5 are based on the following information
about Merrin company
Merlin company has the following data extracted from
its Accounts Receivable records
Customer
|'aIance
Current
$4000
J.,-000
31 -75 davs
.,..
$5,000
-0a900
$3,000
E
F
G
_$tqq0li.' -'"i:: t, i
$28,000
a
a
a
a
a
a
o
Over 75 davs
$1,ooo
$5,000
$2,000
$
r,000
$
.1,|t'io':,
oo,uuu
at June 30. 2010
..
ii.
1,000
$
1,000
;
J'
$6,000
IIAi4 ,,.. ...,. ,.t]ti
$14,000
Merlin's sales terms ate2lI0 n/30 and it records sales
Merlin's year end is June 30
$
10,000
$4,000
at the gross amount of the invoice.
The unadjusted balance in the Allowance for Doubtful
Accounts at June 30 is $6,000 dr.
Merlin makes average sales of $1,000,000 per year and
averages write offs of uncollectible balances of $25,000 per year.
sales for the year ended June 30, 2010 are
$gob,ooo credit sales and $300,000 cash sales
Merhn has a very conservative receivabl., *unug.*ent
strategy.
No adjusting entries have been recorded at June 30
Use the remaining space on this page and the back of the page
for your carcurations
QUESTTON I
If Merlin uses the Allowance Method (percentage of sales) to estimate
bad debts, the adjusting entry at June 30 to record the
provision for uncollectible accounts would involve
a credit to the "Allowance for Uncollectible Accounts,,of:
A) $27.500
B) $20.000
c) $33.500
D)
E)
$26.000
Some other amount
QUESTTON 2
If Merlin used the Allowance Method (aging) to estimate bad debts and
by a detailed review of the above aged trial balance decided
that an allowance of $9,000 was appropiiut", ttt.n the adjusting
entry on June 30 would involve a credit to the ,,Allowance for
Uncollectible Accounts,, of:
A) $9.000
B) $3,000
c) $t5,000
D)
E)
S12,000
Some other amount
QUESTTON 3
Assume that Merlin adjusts its Allowance to a $10,000 credit
balance on June 30 and on July 4 it reads in the Toronto Star that
Customer F has gone bankrupt. Merlin should:
SuV some unprintable words but make no accounting
entry
lJ Make
an entry debiting bad debt expense for $6,000
C) Make an entry debiting bad debt expense for $10,000
D) Make an entry crediting bad debt expense for $6,000
E) None of the above are correct statements
!)
QUESTTON 4
Assume the same information as in Question 3 (Customer F going bankrupt July 4). Assume also that on August 25 Merlin receives
a cheque in the mail from F Company for $6,000 with the following note attached. "The company has reorganized and is trying to
restore its credit rating with all its former suppliers. Please occept this cheque with our apologies". Merlin should:
A) Make a debit to Cash and credit Miscellaneous Income
B) Make a debit to Cash and credit Uncollectible Accounts Expense
C) Make a debit to Cash and a credit to Accounts Receivable (after first reversing the write-off entry)
D) Make a debit to Cash and a credit to "Advances from Customers,,
E) Some other entry
QUESTTON s
Assume that Merlin had always been allowed under Canadian GAAP to use the Direct Write-Off Method because it had never
experienced any bad debt losses in its history as a company. There isn't even an Allowance" account in its General Ledger Chart of
Accounts. Under this assumption, the adjusting entry June 30 to record the provision for uncollectible accounts would involve:
A) A debit to "Uncollectible Accounts Expense"
B) A debit to " Allowance for Uncollectible Accounts"
C) No entry to be made
D) A credit to "Uncollectible Accounts Expense"
E) A credit to Accounts Receivable
Und of
Merlin questions
QUESTTON 6
Ace Company counts its inventory of tires prior to preparing monthly financial statements on June 30. It uses the periodic inventory
system. The warehouse acfually contained 6284 tires, but the count team reported back to the accountant that there were 6824 tires
and this number was used in the accountins records. As a result of this. net income for the month ended June 30 would be:
A) Overstated
B) Understated
C) Correctlv stated
D) There is insufficient information provided to make an assessment
QUESTTON 7
Booth company has the following information in its accounting
records:
Sales year to date
$500,000
Average mark-up on cost
25%
Cost of Goods Sold year to date would then be:
A) $375,000
B) $400,000
c) $425,000
D) $500.000
E) Some other amount
QUESTTON
8
Culpepper Company had the following information in its accounting
records at year end.:
Inventory Cost
$2,000,000
It estimates the net tealizable value of this inventory is $2,200,000. As a
result of this information culpepper would:
A) Make no journal entry
B) Make a joumal entry crediting a gain on market appreciation for $200,000
C) Make a journal entry debiting the allowance for inventory valuation for
D) Make a journal entry debiting a loss on inventory decline for 9200,000 $200,000
E) Make a joumal entry crediting the allowance foiinventory valuation for
$200,000
QUESTTO]\ e
Dingo company
has just been formed and is deciding on its accounting policies
for the first time. It wants an inventory costing flow
assumption that results in the highest reported profits. Prices
have beeriialling for the past r*o y.u.r'unJil;.^i; ," ;a in sight to
this trend. Dingo would select the:
A) LIFO method
B)
c)
l8
20
D) 22
E) Cannot be determined
from the data provided
QUESTTON 13
Henrietta Company wants to raise money from the issue of bonds and the Board of Directors authorizes the issue of $10,000,000 of
bonds in $ 1,000 denominations with interest paid semi-annually to run for a term of 5 years until maturity. At the time of issue the
stated rate of interest on the bonds is 5o/o and the market rate of interest 1s 60/o. The proceeds from the bond issue will be:
A) $t 0,220,330
B) $9,885,340
c) $9,573,550
D) $9,I 15,990
E) Some other amount
QUESTTON 14
Toy Company has a 12131 year end and buys a punch press machine to use in its manufacturing plant. The cost of the machine is
$ 1 10,000. Taxes, duty and freight on the machine totaled $ 10,000. The machine was purchased on Sept 20,2009 and there is no
expected salvage value. The company uses the straight line depreciation method and the machine is expected to last 5 years..
Depreciation expense recorded in 2009 would be:
(A) $24,000
(B) $8,000
(c)
$6,000
(D) $7,333
(E) Some other amount
Use the
following information on Pare Spring for Questions 15
-
17
Accordin-g to its website (www, Pure Sring.com), the Pure Spring Company
was founded in 2007 and sells bottled water tiom the
Caledon Springs area ofOntario.
The Report on Business in the Globe and Mail August 20, reported the following:
I I per cent, due ro shong denlard for its product.
Iy"",ltTg.,alr:.t
::co:d-qu?Tr-plo!!rose
D tz'ruu'uuu ror the quarter eoded July3.l, although per-share profit
The company reporred prcfit of
declined I per cent during this quartei. Sales grew i0 per cent
from the first quarter to $120,920,000 this quarter. Gross Profii for the quader was 2%
higherilan the fint quart".irzo0z g.o*
profit of $96,000,000. The company released its quaxterly financial stat;ments on
August 15.
QUESTION T5
Based on the information given, pure Spring,s yeax-end is most likely
A) August 20
B)
July
3l
C) December 31
D) August 15
E) None ofthe above
QUESTION T6
Based-o,n_the infomation given, pure Spring,s CostofSales for the reported
second_quarter was:
A)
B)
$96,000,000.
$23,000,000
c) $24,920,000
D) not determinable from the information Drovided
E) is determinable, but is not ooe ofrhe above choices
QUESTION
17
Based on the information given for pure Spring;
a) Sales price per bottle ofwater declitred duing the second quarter
b) Cost per bottle of water increased during the second quarter
c) Both (a) and (b) could explain the second quarter results.
d) Neither (a) nor (b) could explain the second quarter results
e) This industry faces declining profits
Use the
End of Pure Spring questions
following informstion on Zenon Company to answer questions I8 to 22
The Zenon Company sells rechargeable flashlights that run on moonbeams. The following information has been extracted
from the
records of Zenon:
January 1
January 10
January 15
January 30
QUESTTON
If Zenon
Beginning Inventory
Bought
Sold
Boueht
18
uses the FIFO cost
A) $40,000
B) $28,000
c)
5.000 units @ $2.00 each
10,000 units (@ $3.00 each
11,000 units @ $5.00 each
8,000 units @, $4,00 each
flow assumption and the perpetual method for inventory, the cost of goods sold for January,
is
$55,000
D) $41,000
E) none of the above
QUESTTON
If Zenon
A)
19
uses the
LIFO cost flow assumption and the periodic method for inventory, the cost of goods sold for January, is
$40"000
10
B)
c)
D)
E)
$28,000
$55,000
$41,000
none ofthe above
QUESTTON 20
If Zenon uses a perpetual bookkeeping system, the inventory was counted on January 31, the physical stock
count revealed there
were 12,000 units on hand but no adjustment is made to the accounting records, the dnancial statements
will
A) overstate inventory and net income
B) understate inventory and net income
C) overstate inventory and understate net income
D) understate inventory and overstate net income
E) none of the above
QUESTTON 2r
If Zenon bought on account a purchase of 4,000 units on January 28, terms FOB Destination, which was not received by the
time of
the January 31 physical inventory count and was excluded from both inventory and payables,
then Zenonwould be:
A) Understating both inventory and payables
B) Overstating both inventory and payables
C) Understating payables and overstating inventory
D) Overstating payables and understating inventory
E) Conectly following GAAp
QUESTTON 22
If Zenon uses the weighted average method of costing inventory and the periodic inventory method:
A) ending inventory will be valued at $3.l3 per unit
B) sales will be costed out at $3.13 oer unrt
1l
c) (a) is correct but not (b)
D) (b) is conect but not (a)
E) both (a) and (b) are coffect
end of Zenon questions ------------
QUESTION
23
Declining balance depreciation method of an asset costing
$1,000,000 with a salvage value of
A) Results in a smaller depreciation expense in the firJt year of depreciation than the straight$100,000
line method
B) is not allowed under Canadian GAAP
C) Results in a larger depreciation expense in the first year of depreciation than the
straight line method
D) Multiplies a constant rate times the net cost (cost less residuaivalue)
E) None of the above
QUESTTON 24
The amortization of Bond premium
A) Increases the net interest expense reported in the income statement
B) Decreases the net interest expense reported in the income statement
C) Results in the net carrying value of the balance sheet liability increasing after each amortization
entry
D) Has no effect on the net interest expense reported in the income statemJnt
E) None of the above
QUESTTON 2s
Restrictive Endorsement of a cheque:
A) Is another way_ of saying the Payee name should be typed on the cheque in advance
!) ts a stamp on the back of the cheque indicating whose bank account;he cheque can be deposited in.
C) Voids the cheque
D) Is used to identify which cheques are outstanding on the bank reconciliation
t2
E)
none of the above
QUESTTON 26
Ho Ltd' Issues one share for $10 and a second share for $ 100 and a third share for $1,000 and its shares are no par value
A) Ho cannot be federally incorporated
B) The credit to the Capital Stock Account will be for $ 1 ,1 10
C) The weighted average number of shares outstanding during the year cannot be computed without knowing the dates of issue
D) Two statements above are coffect
E) Statemerr.s (a), (b) and (c) are all incorrect
QUESTION 27
If a Canadian corporation buys
share for $40 then
a share
of its own stock on the open market at $30 and holds it in the treasury and then resells the
A) The company rnust be federally incorporated under the Canada Business Corporations Act
B) The company will show a gain of $10 in Miscellaneous Income on the Income Statement
C) The company will credit Contributed Surplus for $10
D) The company will credit the full $40 to the common Share Account
E) None of the above statements is correct
QUESTTON 28
if
a company issues
a
20o/o
stock dividend when you are holding 200 shares of the company's stock:
A) You can expect to receive an additional 20 shares in the mail
B) You can expect to receive an additional 40 shares in the mail
C) The aggregate market value of your holdings will
D) The additional
change on receipt of the additional shares
shares gives you a larger voting interest (more control) of the company
E) None of the above statements
are correct
l3
QUESTTON 29
A company declares a 3 for 1 stock split at a time when you are holding 300 shares of the company. Which of the following
statements is incorrect?
A) The company needs not make a journal entry for this event
B) The market value per share of the company's stock will stay the same
C) Your voting interest (control) of the company does not change
D) The company felt the stock price was trading at too high a level as justification for the split
E) There are no incorrect statements above
QUESTTON 30
The following dividend data applies to Affluent Co.
Entitlement:
f
I
I
Class
Class
A .... l0
8
cents/share
....10 cents/share
Remainder split equally
Cash to be distributed . . ..$ 10,000,000
# of shares outstanding
t Class A
18,384,157
I Class B
10,182,538
Which statements are correct?
A) Both classes of shares will get the same total amount of dividends
B) Both classes of shares will get the same dollar amount of dividend per share
C) The data indicates that the participation rate is eighty cents per share
D) Based on the formula specified, not all of the $10,000,000 will be distributed
E) All of the above statements are correct
T4
QUESTTON 3r
Current Liabilities by definition
A) Are due within ayear
B) Are due within one operating cycle
c) Are normally presented on the balance sheet in order of liquidity
D) Are considered to be part of a firm,s working capital
E) None of the above statements are correct
QUESTTON 32
Assume Cain borrows $ 1,000 from Abel and gives him a Note which matures in 6 months and the borrowing rate is 8% per annum.
A) If the note is dishonoured on maturity then Abel will set up a receivable for more than $ 1,000
B) If the note is paid on maturity then Abel will record $80 in interest income
C) If the note is paid on maturity then Abel will record $40 in interest expense
D) If Cain prepares financial statements prior to the maturify date of the note, he will have to make an adjusting entry to set up
the interest income earned
E) None of the above statements is correct
QUESTTON 33
Given the following data for Sunsang Company
Sungsang sells cellular phones for $2,000 each with a one-year warranty against defects. Past experience indicates that 4 percent of
the units will prove defective and that the average repair cost for each is $70. This past year, 40,000 phones were sold, and 500 of
these have already been retumed for service.
A) The estimated liability for warranties at year end is $44,000
B) The estimated liabilify for warranties at year end is $62,000
C) The estimated liability for warranties at year end is $ 70,000
l5
D) The estimated liability for warranties at year end is $ g6,000
E) None of the above
QUESTTON 34
XYZ Corporation announces an offer to issue bonds with a $100,000 par value, anSoh annual contract rate with interest payable
semi-annually, and with a three-year life at a time when the market rate of interest is 10% If
PV of $l (factor for n:6 and r:.05 is .74622
PV of $1 annuity (factor for n:6 and r:.05 is 5.0757 then :
A) The bonds will sell for $104.336
B) The bonds will sell for $97,444
C) The bonds will sell for $102,996
D) The bonds will sell for $92,552
E) The bonds will sell for $94,923
QUESTTON 3s
Assume that a firm issues bonds at a discount. Which statement is correct?
A) Amortizationusing the straight line method will increase the reported interest expense on the income statement
B) Amortization using the effective interest method will result in a larger charge against earnings in each successive period
C) Amortizationusing the straight line method results in an equal interest expense each period
D) Amortization using the effective interest method produces a constant yield on the bonds which will be by definition equal to
the market rate
E) All of the above statements are correct.
t6
QUESTTON 36
Land with a building on it is bought for $1,000,000 at a time when the market value of the land is
$2,001,000 and the market value
of the building is $500,000
A) Each asset would be set up at $500,000
B) The assets would be shown together on the balance sheet as a single asset " Land, & Building"
C) The two assets would be recorded at $2,000,000 and $500,000 reipectively
D) No depreciation will be taken on the building until such time as the market value drops below book value
E) None of the above statements are correct
QUESTTON 37
Given the following data
I Pay $595,000 plus $5,000 legal fees for land, building and equipment
I Land is appraised for $375,000, the building for $300,000, and the equipment for $75,000
I cost $3,000 to demolish an unneeded shed on the properry
r architectural fees of $50,000 and additional construction costs of $100,000 were incurred to adapt the building for its intended
r
use
An additional $20,000 was incurred for relocating and testing the equipment
A)
B)
C)
D)
E)
The building will show a higher cost on the balance sheet than the land
The equipment will show on the balance sheet at $60,000
The $3,000 demolition charge will be added to the land cost
The legal fees should be expensed immediately
None of the above statements is correct
t7
QUESTTON 38
Haulaway Company buys a truck costing $ 1 1,000. It is expected to last for 10 years but to be traded-in
bfter 3 years for a newer
model (the trade-in allowance is estimated at $2,000).
A) The truck will be depreciated over l0 years
B) The truck will be depreciated over 3 years
C) The truck will be depreciated at one rate the first three years and ata different rate the remaining 7 years
D) The trade in allowance is not part of the depreciation calculation
E) None of the above statements is correct
QUESTTON 39
Given the data in the previous question for the truck purchase by Haulaway and the additional information
that the truck is expected to be driven
30,000Km Yr I
15,000 Km Yr 2
45,000 Km Yr 3
What is the depreciation expense in year 3 under the units of activity depreciation method.
A) $3,000
B) $3,667
c)
D)
E)
$900
$4,000
$4.500
QUESTTON 40
If a dividend is declared by a corporation, this will result in:
A) A debit to Dividend Expense
B) A debit to Retained Earnings
C) A debit to Owner's Equity
t8
D) A debit to Share Capital
E) No entry is required at the date of declaration
QUESTTON 41
Peggy Sue is a shareholder of Generous Company and receives a 5% stock dividend. Peggy:
A) Will debit Cash and credit Dividend Income in her accounting records
B) Will own a larger percentage of Generous than before
C) Will own the same percentage of Generous as before
D) Will only be legally entitled to such dividend if Generous has positive net income that year
E) None of the above are correct statements
QUESTTON 42
Which of the following statements is correct with respect to liabilities?
A) They should be classified as current if they are due within one accounting cycle
B) All iiubiliti.r should be shown at their net present value (although for convenience this rule is normally only applied to current
liabilities)
C) Liabilities are shown in the order of liquidity (how quickly they can be converted to cash)
nj Every liability must be matched by a cbnesponding asset on the opposite side of the balance sheet (the matching principle)
E) None of the above statements are correct
QUESTION
43
The recognition of a loss contingency before it actually occurs requires satisfying:
A) One condition
B) Two conditions
C) Three conditions
D) Four conditions
E) A loss contingency is never recognized before it actually occuls
19
QUESTTON 44
Which of the following statements is incorrect with respect to Bonds Payable?
A) Convertible bonds can be converted into cash at the discretion of the bondholder
B) Mortgage bonds are normally secured by real estate property
C) Coupon bonds actually have perforated coupons attached which should be presented to receive interest payment
D) A group of banks which undertakes to underwrite a bond issue is called an Investment Syndicate
E) Debenture bonds are unsecured
QUESTTON 4s
If the stated rate printed on a bond certificate is higher than the market rate of interest at the time of issue ihan that bond will:
A) Sell at par
B) Sell at a premium
C) Sell at a discount
D) Not sell until the certificate is reprinted showing the market rate
E) None of the above
QUESTTON 46
Which of the following statements with respect to Intangible Assets is correct?
A) All research and development costs must be expensed
B) Leasehold improvements are cash incentives provided by the Landlord to improve the property
C) Copyrights have an indefinite life
D) Patents should only be capitalized only when they are purchased from another company
E) None of the above are correct statements
QUESTTON 47
If Ace Company and Deuce Company trade machines, Ace should set up the new machine:
A) At fair market value unless the machines are deemed similar and there is no culmination of the earnings process
B) At the net book value of the machine given up
C) At fair market value unless the machines are deemed dissimilar and there is culmination of the earnings process
D) At zero since there was no cash paid
20
E)
None of the above are correct statements
QUESTTON 48
The basket purchase method is:
(A) The same method as the relative sales value method
(B) Used to combine asset into similar categories on the balance sheet
(C) A method which allocates costs based on the fraction of book value that each component is to the t&tal
i
(D) Based on estimated
(E) Two of the statements in choices A, B, C and D are correct
values
QUESTTON 49
A change in accounting estimate is handled:
A) Simultaneously
B) Prospectively
C) Retroactively
D) At fair market value
E) Some other way
QUESTTON s0
The father of accounting is:
(A) Da Vinci
(B) Ravioli
(C) Pacioli
(D) Debere
(E) Legere
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4
5
6
7
8
9
10
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12
'13
14
15
16
17
18
19
20
21
22
23
24
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7Y.
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1.1381
1.1495
1.16.10
1.1726
1.1843
1.1961
1
.2081
1.2?02
1.2324
1.2447
1.2572
1.2697
1.2824
I
iiii ri:lccii
FV = P(1+r)"
r = Interest rate; n = number of
2%
3%
4%
r.0200 1_0300 1.O4oO
1.0404 LO6o9 1,0816
1.A612 1.0927 1_1249
1.0824 1.1255 1.1699
'1.104't 1.1593 1.2167
1.1262 1.1941 .t.2653
1.1487 1.2299 1.3159
1.1717 1.2668 .1.3686
1.1951 1.3048 1.4233
1.2190 1.3439 .4802
1.2434 1.38/2 1.5395
1.26A2 I .4258 1.6010
1.2936 1.4685 1.6651
1.3195 1.5126 1.7317
r.3459 1.5580 .1.8009
1.3728 1.6M7 1.8730
.4002 1.6528 .g47g
1.4242 1.7024 2.O25A
1.4568 1.7535 2..1068
].4859 1.8061 2.191'l
'1.5157 1.8603 2.2788
1.5460 1_9161 2.3699
1.5769 1.9736 2.4647
1.6084 2.0328 2.s633
1.6406 2.0938 2.0658
1
1
llt
1
5%
6%
1.0500 1.0600
1.1025 'l .1236
1.'1576 1.1910
't.2't55 1.2625
1.2763 1_3382
.340't 1.4185
.407'1 .5036
't.4775 1.5938
1.5513 1.5895
'l .6289
1.7908
1.7103 1.8983
1.7959 2.0122
1.8856 2.1329
1.9799 2.2609
2.0789 2.3966
2j829 2.5404
2.2920 2.692A
2.4066 2.A543
2.5270 3.0256
2.6533 3.207'l
?.7860 3.3996
2.9253 3.6035
3 0715 3.8197
32251 4.0489
3.3864 4.2919
7%
8%
1.0700 1.0800
1.1449 1_'t664
1.2250 1.2597
1.3108 1.3605
1.4028 1.4693
1.5007 1.5869
1.6058 1.7138
.7182 1.8509
1.8385 1.9990
1.9672 2.1589
2j049 2.3316
2.2522 2.5182
2.4098 ?.7196
2.5785 2.9372
2.7590 3.1722
2.9522 3.4259
3.1588 3.7000
3-3799 3.9960
3.6165 4.3157
3.8697 4.6610
4.1406 5.0338
4.4304 5.4365
4.7405 5.8715
5.0724 6.3412
5.4274 6.8485
1
1
1
1
'J,
9%
10% 11% 12%
1.0900 1.1000 1.1100 1.1200
1.1881 1.2100 1.2321 1.2544
1.2950 '1.3310 "t.3676 1.4049
1.4116 1.464't 1.5181 1.5735
1.5386 1.6105 1.6851 1.7623
1.677'1 1.7716 1.8704 1.9738
'1.8280 't.9487 2.0762 2.2107
1.9926 2.1436 23A4s 2.4760
2.'t719 2.3579 2-5580 2.7731
2.3674 2.5937 2.8394 3.1058
2.5804 2.853't 3.1518 3.4785
2.8't27 3.1384 3.4985 3.8960
3.0658 3.4s23 3.8833 4.3635
3.U17 3.7975 4.3104 4.8871
3.6425 4.'t772 4.7846 5.4736
3.9703 4.5950 5.3109 6.1304
4.3276 5.0545 5.8951 6.8660
4.7171 5.5599 6.5436 7.6900
s.1417 6.1159 7.2633 8.6128
5.6044 6.7275 a.0623 9.6463
6.1088 7.4002 8.9492 10.8038
6.6586 8.1403 9.9336 '12.1003
7 2579 8.9s43 11.0263 13.5523
7.9.111 9.8497 12.2392 15.1786
6.6231 10.8U7 13.5855 17.0001
15%
1.'1500
't.3225
1.5209
1.7490
2.0114
2.3131
2.6600
3.0590
3.5179
4.0456
4.6524
5.3503
6.1528
7.0757
8.137.1
9.3576
10.7613
12.3755
14.2318
16.3665
1A.a215
21.6447
24.8915
28.62s2
32 9.190
B) FIFO method
C) Average Cost Method
D) FISH method
E) Retail method
QUESTION
10
in Ecudor is
Ernesto Estevez buys an Ecudorian Government Savings Bond for $2,000 Canadian Funds. The market rate of interest
I2yo andinterest is compounded quarterly. At the end of three years, Ernesto's investment will be worth (rounded to the nearest
dollar):
A) $2,000
B) 52,720
c) $2,790
D) $2,852
E) None of the above
QUESTION 1r
Felicia Fedora wants to have $20,000 saved up when she starts college in 5 years. Money is worth 10% and all investment
opportunities she is looking at are compounded semi-annually. How much should she deposit now?
A) $12,278
B) $13,110
c) $ 13,890
D)
$14,224
E) Some other amount
QUESTION
12
leaves it there for 36
Gustaf Gulag invests an inheritance into an investment account that pays simple interest at 8o/o per annum and
takes this
immediately
months at which time the insurance company sends him a cheque for the principal plus accrued interest. He
based on an effective interest
cheque and buys an annuity from an insurante company that pays him $800 per month. The annuity is
for how many months?
rate of l}oh, money .ornporrnded monthly. Gustaf will receive a cheque from the insurance company
A)
16