RELIG 205 Study Guide - Islamic Calendar, Hajj, Tawhid

True or False

1. Expenditures made to extend an asset's life are deemedrevenue expenditures?

2. Residual value is ignored under declining balancedepreciation except for the final year?

3. Goodwill equals the purchase price of a company over the fairmarket value of its net assets?

4. FICA tax is a payroll tax that is paid by both the employeeand the employer?

5. If the market rate of interest is 8% and a corporation'sbonds bear interest at 7%, the bonds will sell at a discount?

6. If 50,000 shares are authorized, 35,000 shares are issued,and 1,000 shares are reacquired, the number of outstanding sharesis 36,000?

7. Cash dividends are normally paid on shares of treasurystock?

8. The declaration of a cash dividend decreases a corporationsstockholder's equity and decreases its assets?

9. Outstanding checks are checks that have been issued, but havenot cleared the bank?

1)Which of the following scenarios is consistent with weak form efficiency?

2)Which of the following scenarios is consistent with semi-strong form efficiency?

3) If semi-strong form efficiency is the correct theory to describe how the stock markets work, which of the following would we expect to happen after a company announces that it earned more money in the prior quarter than people expected? Assume no other news is released about the company.

4) The current stock price of Apple is $100. If you expect Apple to pay a dividend next year of $5 per share, and the cost of equity capital is 12%, what would you expect the price of Apple to be next year right after the dividend is paid?

posting for sec times any incomplete work will bereported answer all 2 parts investment 1 to 7 and finacial statmentand valution 1 to 6

You are working for The Wellington Company on temporaryassignment while one of the accountants is on family leave. Youhave been asked to review the company’s investment journal entriesand provide necessary information to the accountant preparing thefinancial statements.

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JOURNAL

ACCOUNTING EQUATION

Investments

Review the journal entries on The Wellington Company panel thenanswer the following questions.

7. Which of the following investments are likely to beavailable-for-sale securities? Check all that apply.

Harding Construction stock

Mays and Co. stock

Cannot be determined

Red Rock Co. stock

Sunset Village bonds

Minions Corp. stock

Financial Statements and Valuation

The accountant preparing the financial statements has asked youto provide the fair value as of the end of the year for theinvestments. Present the information as it would be shown on thefinancial statements. Last year, The Wellington Company reportedcosts of $68,000 in trading investments and $82,000 inavailable-for-sale investments. Refer to the journal entries shownon The Wellington Company panel. Assume that all investments soldduring this year were trading investments and that purchases duringthe year were new investments.

1. Select the correct label for each line and fill in theamount. In classifying the investments, choose a categorizationwhich seems most likely, given the pattern of transactions in thejournal entries. Enter all amounts as positive numbers. If anamount box does not require an entry, leave it blank.

6. Which of the following items does not affect net income?Check all that apply.

only unrealized gains or losses for all investments

realized loss on available-for-sale securities

realized gain on trading securities

none of these answers is correct

both gains and losses of any sort for all investments

unrealized loss on trading securities

unrealized gain on available-for-sale securities