Essay on Chapter 4 Solutions - 3079 Words

Chapter 04 Analyzing Investing Activities Multiple Choice Questions 1. Which of the following would rarely be classified as a current asset? A. Prepaid insurance B. Goodwill C. Marketable Securities D. Work-in-progress 2. Which of the following would not be classified as a current asset? A. Inventory B. Accounts payable C. Accounts receivable D. Prepaid expenses 3. An asset is considered to be liquid if: A. it is readily converted into a current asset. B. it is an intangible asset. C. it is readily converted into cash. D. it is part of retained earnings. 4. Analysis of a companys assets will help evaluate its: I. liquidity. II. solvency. III. operational capacity. IV financing ability. A.†¦show more content†¦A. Goodwill B. Customer lists C. Prepaid advertising expenses D. Memberships 19. Target Inc. has 30M shares outstanding and trades at $50 per share. Target has net identifiable assets with a book value of $1,000M and a fair value of $1,200M. Acquirer Corporation purchases all of Target Inc. stock for $60 per share. How much will Acquirer record as goodwill upon acquiring Target? A. 300M B. 500M C. 600M D. 800M 20. Which of the following is incorrect with respect to recognized goodwill on the balance sheet? A. It should not be amortized over 30 years. B. It arises when another company is purchased or when internally generated. C. It should be written-down if the future benefits no longer exist. D. It may be negative. 21. Under current US GAAP, goodwill is: I. amortized over a period not to exceed 40 years. II. tested annually for impairment. III. exclusive of separately identifiable intangible assets. IV. recorded only upon purchase of another entity. A. I, II, III and IV B. II, III and IV C. I, II and III D. II and IV The following information can be found in Manufacturer Companys financial statements. 22. If Manufacturer used FIFO its retained earnings as of the end of fiscal 2006 would be: A. $ 540,000 B. $ 440,000 C. $ 524,000 D. $ 506,000 23. If Manufacturer used FIFO its Net Income for fiscal 2006 would be: A. $ 165,000 B. $ 149,000 C. $ 135,000 D. $ 131,000 24. Look Good Corporation hasShow MoreRelatedChapter 4 Solutions Essay1016 Words   |  5 Pagesreversals for 2008 remain unchanged (â‚ ¬ 595 million), the adjusted provision for bad debts is â‚ ¬ 488 million (1,662 – 1,769 + 595). Because the unadjusted provision for 2007 was â‚ ¬ 547 million, decrease Cost of Sales for 2008 by â‚ ¬ 59 million (547 – 488). 4. Increase the tax expense and net profit. Given the tax rate of 30.5 percent, the Tax Expense for 2008 would increase by â‚ ¬ 18 million (.305 Ãâ€" 59), whereas Net Profit would increase by â‚ ¬ 41 million ([1 – .305] Ãâ€" 59).Read MoreSolutions to Homework Assignments: Chapter 43192 Words   |  13 PagesSolutions to Homework Assignments: Chapter 4 6. Are all capital gains (gains on the sale or disposition of capital assets) taxed at the same rate? Explain. No. If a taxpayer holds a capital asset for a year or less the gain is taxed at ordinary tax rates. If the taxpayer holds the asset for more than a year before selling, the gain is generally taxed at a maximum 15% rate but could be taxed as high as 20% for high income taxpayers. If the taxpayer sells more than one capital asset during the yearRead MoreSolutions to Questions - Chapter 4 Fixed Rate Mortgage Loans4680 Words   |  19 PagesSolutions to Questions - Chapter 4 Fixed Rate Mortgage Loans Question 4-1 What are the major differences between the CAM, and CPM loans? What are the advantages to borrowers and risks to lenders for each? What elements do each of the loans have in common? CAM - Constant Amortization Mortgage - Payments on constant amortization mortgages are determined first by computing a constant amount of each monthly payment to be applied to principal. Interest is then computed on the monthlyRead MoreEssay on Financial Statement Analysis 10th Chapter 4 Solution14065 Words   |  57 PagesChapter 4 Analyzing Investing Activities REVIEW Assets are the driving forces of profitability for a company. Assets produce revenues that compensate workers, repay lenders, reward owners, and fund growth. Current assets are resources or claims to resources readily convertible to cash. Major current assets include cash and cash equivalents, marketable securities, receivables, derivative financial instruments, inventories, and prepaid expenses. 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These solutions are mostly integrated with decision support systems. The following are a few examples of DM solutions [84]:  Finance - The finance and banking industry uses DM solutions to determine customer loyalty and the credit risk of customers. DMsolutions help the industry with money laundering investigations and enable customised plans