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FinKnow | [
"Verify that the financial information supplied by the entity agrees with the books of original entry.",
"Perform preliminary analytical procedures to identify accounts that may represent specific risks relevant to the engagement.",
"Make inquiries of management concerning the entity's procedures used in adjusting and closing the books of account.",
"Obtain an understanding of any specialized financial reporting frameworks and practices used in the entity's industry."
] | null | Prior to commencing the compilation of financial statements of a nonissuer, an accountant is required to | null | 48d23bc7-8a9b-4192-befd-f38eb6082901 |
FinKnow | [
"They can be issued by firms.",
"Their payouts (i.e. dividend or coupons) are made after corporation tax has already been deducted.",
"Their payouts (i.e. dividends or coupons) are made before corporation tax has been deducted.",
"They can be traded on the secondary market."
] | null | Which of these is true of equity but not of bonds? | null | 711f7b2d-e35a-4b69-b7f0-b7027bbff849 |
FinKnow | [
"Bring the matter to the attention of the board of directors or audit committee.",
"Withdraw the auditor’s report from those persons currently relying on it.",
"Perform alternative procedures to verify account balances.",
"Discuss the potential financial statement adjustments with client management."
] | null | Subsequent to issuing a report on audited financial statements, a CPA discovers that the accounts receivable confirmation process omitted a number of accounts that are material, in the aggregate. Which of the following actions should the CPA take immediately? | null | 424109e6-7f46-4c2a-b888-43553d5bad77 |
FinKnow | [
"The accounting staff neglects the control, due to increased transactions to be processed.",
"The technology department writes a program that does not properly implement the control, due to a lack of understanding.",
"Two employees, who work in different departments, are circumventing an internal control.",
"Someone erroneously disables edit checks in a software program designed to identify control exceptions."
] | null | An auditor is evaluating a client’s internal controls. Which of the following situations would be the most difficult internal control issue for an auditor to detect? | null | 8b0de748-2b5b-45df-880f-d940ae3b905f |
FinKnow | [
"The ranking of projects by NPV is invariant to changes in the market rate",
"The IRR will always agree with NPV metric",
"The IRR never changes the ranking of the projects",
"We should use a single metric, like the NPV or the IRR, to have a coherent comparison"
] | null | When comparing investment projects: | null | a7608888-a073-4f48-9cee-e72e213a264c |
FinKnow | [
"Providing an expert opinion in order to advocate the client's interest in litigation.",
"Providing an expert opinion in order to advocate the client's position in a regulatory investigation.",
"Providing factual accounts in testimony explaining positions taken during the performance of any services provided to the client.",
"Providing legal services to the client in a foreign jurisdiction."
] | null | According to rules issued under the Sarbanes-Oxley Act which of the following nonaudit services is an accounting firm permitted to provide for an issuer audit client without impairing the accounting firm's independence? | null | d9546a0b-7dc6-46f9-be6c-63f259c40ddf |
FinKnow | [
"Review that service auditor’s report on controls placed in operations.",
"Review the service auditor’s report and outline the accounting system in a memo to the working papers",
"Audit the service organization’s controls, assess risk, and prepare the audit plan.",
"Audit the service organization’s controls to test the work of the service auditor."
] | null | Which of the following procedures should a user auditor include in the audit plan to create that most efficient audit when an audit client uses a service organization for several processes? | null | 892b94c6-95cb-440a-981f-b1ac151fef7d |
FinKnow | [
"Planned reliance on the prescribed control.",
"Assessed level of control risk.",
"Planned reliance on substantive tests.",
"Tolerable rate of deviations."
] | null | An auditor is using statistical sampling in testing whether cash disbursements were properly authorized. The sample results indicate that the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate. Under these circumstances the auditor most likely would reduce the | null | ada30116-5d00-4a23-aa89-09278c989048 |
FinKnow | [
"The predominant customer is the primary government.",
"The pricing policies of the activity establish fees and charges designed to recover its cost.",
"The activity is financed by debt that is secured partially by a pledge of the net revenues from fees and charges of the activity.",
"Laws or regulations require that the activity’s costs of providing services including capital costs be recovered with taxes or similar revenues."
] | null | Which of the following statements is the most significant characteristic in determining the classification of an enterprise fund? | null | e8ccbcfa-ffd0-49b4-9a66-7fed1814d699 |
FinKnow | [
"Verify inventory pledged under loan agreements by confirming the details with financial institutions.",
"Inquire about the current status of transactions that were recorded on the basis of preliminary data.",
"Compare the financial statements being reported on with those of the prior year.",
"Trace information from shipping documents to sales invoices and sales journal transactions."
] | null | Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events? | null | 26cf4a00-3809-4837-b3a1-cfc85d2731c3 |
FinKnow | [
"Identify the types of potential misstatements that could occur.",
"Assess the operational efficiency of internal control.",
"Determine whether controls have been circumvented by collusion.",
"Document the assessed level of control risk."
] | null | In planning an audit, the auditor's knowledge about the design of relevant internal control activities should be used to | null | b9d69d61-cb01-4cec-ba16-849430f4d78d |
FinKnow | [
"Management displays a significant disregard for regulatory authorities.",
"There is a lack of turnover of employees in the accounting department.",
"Monthly bank reconciliations usually include several deposits in transit.",
"Equipment is usually sold at a loss before being fully depreciated."
] | null | Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements arising from fraudulent financial reporting? | null | 10665bc3-7156-4bd1-b20d-93cd319f9751 |
FinKnow | [
"Issue a report on findings based on specified procedures performed.",
"Assess whether the procedures meet the needs of the parties.",
"Express negative assurance on findings of work performed.",
"Report the differences between agreed-upon and audit procedures."
] | null | Which of the following should a practitioner perform as part of an engagement for agreed-upon procedures in accordance with Statements on Standards for Attestation Engagements? | null | e12d42b2-c6d7-4669-b99b-5eb0c35c52ca |
FinKnow | [
"Total current net assets and total other assets.",
"Total current assets and restricted assets.",
"Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.",
"Unrestricted net assets, restricted net assets, and total current assets."
] | null | Which of the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization? | null | 86a71a08-55c3-44e6-801c-58481ea8ffe1 |
FinKnow | [
"Fair value.",
"Historical cost.",
"Net realizable value.",
"Lower of historical cost or market."
] | null | In the financial statements of employee benefit pension plans and trusts, the plan investments are reported at | null | ffc25d32-a840-429b-b997-5ae022ca77bc |
FinKnow | [
"Discontinued operations",
"Income from continuing operations.",
"Extraordinary gains and losses",
"Operating income."
] | null | Which of the following items is not subject to the application of intraperiod income tax allocation? | null | ccd67f88-b8b7-4378-90d8-aa637f81d096 |
FinKnow | [
"A 5% price increase results in a 3% decrease in the quantity demanded.",
"A 4% price increase results in a 6% decrease in the quantity demanded.",
"A 4% price increase results in a 4% decrease in the quantity demanded.",
"A 3% price decrease results in a 5% increase in the quantity demanded."
] | null | In which of the following situations would there be inelastic demand? | null | 9971a97c-13a6-4e0f-b010-04dceb6f6543 |
FinKnow | [
"causes the equilibrium price to be artificially high",
"causes the equilibrium price to be artificially low",
"exists when markets cannot reach equilibrium",
"results in an equilibrium that does not maximize the total benefit to society"
] | null | An externality | null | 697324d8-990f-406f-b497-a91423276893 |
FinKnow | [
"Collusive output levels tend to increase, driving the price above competitive levels.",
"Consumer surplus falls as the price is driven downward.",
"Collusive output levels tend to decrease, driving the price down to competitive levels.",
"Joint profit maximization costs society consumer surplus as the price rises above competitive levels."
] | null | What is one reason why the government discourages collusion between large firms in the same industry? | null | 727ad208-b486-4dc6-8ffa-15c3f407e20f |
FinKnow | [
"Price rises, but quantity is ambiguous.",
"Price falls, but quantity is ambiguous.",
"Price is ambiguous, but quantity rises.",
"Price is ambiguous, but quantity falls."
] | null | The apple market is in equilibrium. Suppose we observe that apple growers are using more pesticides to increase apple production. At the same time, we hear that the price of pears, a substitute for apples, is rising. Which of the following is a reasonable prediction for the new price and quantity of apples? | null | df443d35-a154-4423-932d-612c00e13506 |
FinKnow | [
"A bumper crop of oranges in Florida",
"A decrease in the price of Tang",
"Expectations of lower future prices for orange juice",
"Expectations of higher future income among juice drinkers"
] | null | Which of the following is most likely to result in a shift to the right in the demand curve for orange juice? | null | 10831a15-2b01-4750-9bb9-f30568edbc47 |
FinKnow | [
"I only.",
"II only.",
"III only.",
"I and III only."
] | null | Which of the following is characteristic of oligopoly? I. Formidable barriers to entry. II. Price (P) = Marginal Revenue (MR). III. Relatively few sellers. | null | 47a25872-daec-4e97-8e7d-7cb6f3bef326 |
FinKnow | [
"income effect.",
"substitution effect.",
"marginal effect.",
"supply effect."
] | null | If the price of a product decreases with the price of a substitute product remaining constant such that the consumer buys more of this product, this is called the | null | 94b69970-8471-41bd-b0dc-79337b84b2cc |
FinKnow | [
"decrease price as demand is elastic.",
"decrease price as demand is inelastic.",
"increase price as demand is elastic.",
"increase price as demand is inelastic."
] | null | A small business estimates price elasticity of demand for the product to be 3. To raise total revenue, owners should | null | d9550dfb-fa89-4373-b65d-1e1442097ea8 |
FinKnow | [
"AVC that first rises, but eventually falls, as output increases.",
"AFC that first rises, but eventually falls, as output increases.",
"MP that first falls, but eventually rises, as output increases.",
"MC that first falls, but eventually rises, as output increases."
] | null | The Law of Diminishing Marginal Returns is responsible for | null | 1509ae55-2a5c-4195-b6fb-23951deb424f |
FinKnow | [
"the average product of labor begins to fall.",
"the total product of labor begins to fall.",
"marginal product of labor becomes negative.",
"marginal product of labor begins to fall."
] | null | Diminishing marginal returns to short-run production begin when | null | 0a20b4d4-eb5e-4c22-9228-d98f3afde65b |
FinKnow | [
"MC = AFC.",
"MC = MR.",
"P = ATC.",
"MR= AVC."
] | null | Firms maximize their profits by producing a level of output at which | null | af230990-607e-40bf-b450-c989a27a0ac2 |
FinKnow | [
"The marginal cost and average variable cost curves will shift upward.",
"The average fixed cost and average total cost curves will shift upward.",
"The marginal cost and average fixed cost curves will shift upward.",
"The marginal cost, average fixed cost, average variable cost, and average total cost curves will all shift upward."
] | null | In the short run, a firm employs labor and capital to produce gadgets. If the annual price of capital increases, what will happen to the short-run cost curves? | null | 09e324c5-76ca-44e0-837e-5acb65c1c93d |
FinKnow | [
"The Wagner Act",
"The Sherman Act",
"The Clayton Act",
"The Robinson-Patman Act"
] | null | Which of the following was not a landmark antitrust act? | null | e545e802-62af-4ed4-a632-ac9874e64c9e |
FinKnow | [
"The owners switch from whole wheat to sourdough bread.",
"The owners hire several part-time workers to cover the dinner shifts.",
"The owners work overtime on a busy weekend.",
"The owners buy the office next door, and this doubles the customer seating."
] | null | Which of the following is an example of a long-run adjustment for the owners of a small café? | null | 9de72033-02c1-419d-aad6-6d45c4cb5464 |
FinKnow | [
"profits",
"the opportunity cost of workers’ time",
"the wage and the average (physical) product of labor",
"the marginal (physical) product of labor and the output price"
] | null | A competitive firm's demand for labor is determined directly by | null | 7fa99b92-ce94-43e9-aea0-a8a37790483a |
FinCode | null | null | The market price of K-T-Lew Corporation's common stock is $60 per share, and each share gives its owner one subscription right. Four rights are required to purchase an additional share of common stock at the subscription price of $54 per share. If the common stock is currently selling rights-on, what is the theoretical value of a right? Answer to the nearest cent. | null | f4c4977c-cd87-4dae-a72d-cf7143b328ed |
FinCode | null | null | The following information pertains to Baxter Co: Inventory at beginning of year $200000 Inventory at year end $300000 Cost of goods sold during the year $500000 What was Baxter's inventory turnover for the year? Answer to one decimal place. | null | 6487aa10-2cda-4c36-af87-1c52d8453d49 |
FinCode | null | null | An equipment costs $17,000 with a useful life of five years and estimated residual value of $2,000. The equipment is to be depreciated using the double declining balance method. What is the net book value of the equipment at the beginning of the third year? Answer to the closest dollar. | null | c6807ca2-d25f-4cb3-876f-443dd08318e1 |
FinCode | null | null | A 180-day money market instrument is quoted at an add-on rate of 4.76% for a 360-day year. What is the bond equivalent yield of the instrument? Answer as a percentage with two decimal places. | null | 3c581ec3-d60d-473a-bba7-dbc33ae340f9 |
FinCode | null | null | A nongovernmental, not-for-profit organization held the following investments:
Investment Cost, Fair value (beginning of year), Fair value (end of year)
Stock A (100 shares), $50 per share, $45, $51
Stock B (200 shares), $40 per share, $41, $49
What amount of stock investments should be reported in the year-end statement of financial position? Answer to the nearest dollar. | null | 3068a6fb-6ac6-4f4a-8030-39680021cabe |
FinCode | null | null | Hall Co. purchased a machine on January 1 at a cost of $140000. The machine had an estimated useful life of eight years and a salvage value of $60000. Hall chose to depreciate the machine using the double- declining balance method. What was the carrying amount of the machine in Hall's balance sheet at the end of its second year of operations? Answer to the closest dollar. | null | a674622d-261e-443b-80f1-f859adf8e546 |
FinCode | null | null | An equity analyst is using the market model to analyze the returns to a stock. During the recent year, the market rose by 5% and the stock rose by 8%. The beta for the stock is 0.66 and alpha is 0.02. What is the company-specific return to the stock during the recent year? Answer as a percentage with a single decimal place. | null | b505d3af-84d9-4a31-ac4e-faf68a99b8b9 |
FinCode | null | null | Corbet Co. purchased a copyright near the beginning of the current year from an author for $20000. The legal life of the copyright is equivalent to the life of the author plus 50 years. Corbet expects to sell the book for five years. What amount should Corbet report as amortization expense related to the copyright at the end of the current year? Answer to the closest dollar. | null | 3127a8ef-2bb7-4aec-a401-60bd051a3ddc |
FinCode | null | null | A hedge fund with $120 million of initial investment and 2-20 fee structure earned 35% return at year end. Assuming management fees is based on assets under management at year end and incentive fee is calculated net of management fee, what is the total fees earned by the fund? Answer in millions of dollars to two decimal places. | null | 6be33f6a-50c3-42ab-a99d-686fcca1b858 |
FinCode | null | null | On January 1, year 1, Alpha Co. signed an annual maintenance agreement with a software provider for $15,000 and the maintenance period begins on March 1, year 2. Alpha also incurred $5,000 of costs on January 1, year 1, related to software modification requests that will increase the functionality of the software. Alpha depreciates and amortizes its computer and software assets over five years using the straight-line method. What amount is the total expense that Alpha should recognize related to the maintenance agreement and the software modifications for the year ended December 31, year 1? Answer to the nearest dollar. | null | 7a21b72a-51b9-4dfd-8a5d-d24717a01c07 |
FinCode | null | null | The notes to a company's financial statements disclose the present value of lease payments relating to the next five years as $35,000. These payments concern an operating lease,which the company had entered into two years ago. If the company's total assets and equity are $450,000 and $300,000, respectively, what is the debt-to-equity ratio after capitalizing the effect of the lease transaction? Answer as a percentage to a single decimal place. | null | 2ec6d95b-bf1f-4659-b070-359f11f73e9a |
FinCode | null | null | On March 1, 2013 a customer subscribed to a monthly newsletter paying an annual fee of $1,440 on that day. The news agency's financial year ends on December 31, 2013. What is the adjustment required to the company's liabilities with respect to the specific transaction at year-end? Answer to the closest dollar. | null | 88a477cc-7b1d-4cd1-8405-fe2b500fb1fb |
FinCode | null | null | An investment project cost $1 million to undertake and will deliver $2 million in five years' time. The discount rate is 10%. What is the project's NPV? Answer to the nearest dollar. | null | eb06e668-7b38-48be-b969-558871fa5335 |
FinCode | null | null | Sasha Audrey, a financial analyst, is preparing a report on Vault Managers (VMA), a financial management firm in Chicago, USA. Audrey has accumulated information about the firm to estimate key financial ratios. The following exhibit displays this information. Exhibit: Selective Financial Information of Vault Managers (in thousands of US dollars) December 31, 2011.
Revenues: $405,000
Cost of services: $85,200
Interest: $135,500
Selling, general, and administrative expenses: 75,000
Depreciation: 45,500
Tax Rate: 35%
What is VMA's operating profit margin? Answer as a percentage to two decimal places. | null | c3a5de88-26ec-42e0-af55-16292c7f6da9 |
FinCode | null | null | A $500 par-value convertible debenture is selling at $520. If the conversion ratio is 20, what is the conversion price? Answer to the nearest cent. | null | 7d22d641-056e-4ca2-b6a7-5904d7921c47 |
FinCode | null | null | Box a nongovernmental not-for-profit organization had the following transactions during the year:
Proceeds from sale of investments: $80000
Purchase of property plant and equipment: $10000
Proceeds from long-term debt: $100000
Loss on sale of investment: $5000
What amount should be reported as net cash provided by financing activities in Box's statement of cash flows? Answer to the nearest dollar. | null | 5f3fdcb1-5826-4335-9389-b7a7b4b6553b |
FinCode | null | null | Consider a put option selling for $4 in which the exercise price is $34 and the price of the underlying is $36. If the price of the underlying at expiration is $37, what is the profit for the option seller? Answer to the nearest dollar. | null | e8467ab4-098b-451c-b610-5f4f5af2a529 |
FinCode | null | null | Mentor Co. a U.S. corporation owned 100% of a Swiss corporation. The Swiss franc is the functional currency. The remeasurement of Mentor's financial statements resulted in a $25000 gain at year end. The translation of the financial statements resulted in a $40000 gain at year end. What amount should Mentor recognize as foreign currency gain in its income statement? Answer to the closest dollar. | null | c2cbe92c-70ea-4fe4-b0bc-ffd815fbb879 |
FinCode | null | null | Johnson worked for ABC Co. and earned a salary of $100,000. Johnson also received, as a fringe benefit, group termlife insurance at twice Johnson's salary. The annual IRS established uniform cost of insurance is $2.76 per $1,000. What amount must Johnson include in gross income? Answer to the nearest dollar. | null | fa8c1ce6-72d5-4802-8f89-6dd62a3d409e |
FinCode | null | null | Laura Martin, CFA, is a British investor currently holding Singaporean equities. She is exploring arbitrage opportunities in the forward foreign currency market. The current GBP/SGD spot exchange rate is 2.1050. She has devised the following strategy: Invest SGD for twelve months in risk-free zero coupon bonds at a rate of 4.5%. At the end of the term convert the SGD to the GBP at an agreed upon forward rate of GBP/SGD 2.0303. What is the return on the strategy in domestic currency terms? Answer as a percentage to two decimal places. | null | 603b00e2-3a54-4af6-9332-5c39bf108239 |
FinCode | null | null | In the current financial year, a company has paid a dividend per share of $5. The company has always maintained a retention rate of 30% and expects to continue to do so in the long-run. The average return on equity is equal to 15%. The company's shareholders' required return on equity is 20%. What is the company's justified price-to-earnings (P/E) ratio? Answer to two decimal places. | null | d68a04b6-bef6-46e5-a0e2-6464813e62c5 |
FinCode | null | null | Greene is the sole shareholder of Seagull, a calendar-year S corporation. Greene's basis at the beginning of the year is $15,000. Seagull reported an ordinary loss of $5,000 and $2,000 of municipal bond interest for the year. Seagull distributed cash of $6,000 to Greene on November 1. What is Greene's basis in Seagull at the end of the year? Answer to the closest dollar. | null | ec4d193d-8316-4127-afef-817ff11198ca |
FinCode | null | null | A company's first IFRS reporting period is for the year ended December 31, year 2. While preparing the year 2 statement of financial position, management identified an error in which a $90,000 loss accrual was not recorded. $40,000 of the loss accrual related to a year 1 event and $50,000 related to a year 2 event. What amount of loss accrual should the company report in its December 31, year 1, IFRS statement of financial position? Answer to the nearest dollar. | null | 04664982-da6f-44ce-ad29-97fd36f1a3d9 |
FinCode | null | null | Carson owned 40% of the outstanding stock of a C corporation. During a tax year, the corporation reported $400,000 in taxable income and distributed a total of $70,000 in cash dividends to its shareholders. Carson accurately reported $28,000 in gross income on Carson's individual tax return. If the corporation had been an S corporation and the distributions to the owners had been proportionate, how much income would Carson have reported on Carson's individual return? Answer to the nearest dollar. | null | 85f4c511-9234-4a47-aba7-c4d0018e30ee |
FinCode | null | null | Mark Taylor is an equity investor who has recently purchased the stock of a Kenyan enterprise. The risk-free rate of return in Kenya is 4.5% while the expected return on the market index is 7.2%. The correlation of the stocks purchased with the market index has recently increased from 0.6 to 0.8 and the standard deviation of the stock and market index is 25.7% and 16.4% respectively. What is the expected return on the Kenyan stock? Answer as a percentage to two decimal places. | null | 5c0af4e3-f540-43e5-9126-e400cfa73072 |
FinCode | null | null | Vital Corp. is an accrual-basis calendar-year C corporation. Its year 2 reported book income before federal income taxes was $500000. Included in that amount were the following items:
Year 1 state franchise tax refund: $50000
Municipal bond interest income: $7500
What should be the amount of Vital's year 2 taxable income as reconciled on Vital's Schedule M-1 of Form 1120 U.S. Corporation Income Tax Return? Answer to the nearest dollar. | null | 4494d254-c214-45db-893a-d5ff4e0862b7 |
FinCode | null | null | You bought a limousine for $98,000 and are planning to rent it for weddings, ceremonies and parties at $245 per hour. If you estimate the car will be hired for 2 hours a day on average, with daily costs at about $50, what is the estimated yearly yield on your investment if you work all year round, i.e. every day of the year, including any festivities and weekends? Answer as a percentage. | null | d77ad3e5-acf0-4d83-8ee5-d7fa65b61960 |
FinCode | null | null | Brill Co. made the following expenditures relating to Product X:
Labor and material costs incurred in producing a prototype $100000
Cost of testing the prototype $40000
Legal costs to file a patent $5000
Production of Product X commenced when the patent was granted. What amount of the above costs should be expensed as research and development costs? Answer to the nearest dollar. | null | 9654b80f-5bc5-46cc-9a22-39898268fa72 |
FinCode | null | null | A shoe retailer allows customers to return shoes within 90 days of purchase. The company estimates that 5% of sales will be returned within the 90-day period. During the month, the company has sales of $200,000 and returns of sales made in prior months of $5,000. What amount should the company record as net sales revenue for new sales made during the month? Answer to the nearest dollar. | null | c2ce9b07-43ce-4cff-8d07-b6a2885c2888 |
FinCode | null | null | Large City does not use the modified approach to account for roads. At the beginning of the current year the city spent $800000 on new roads. The roads have a 20-year useful life. What amount should Large City report as an expense related to the new roads in the statement of activities for the current year? Answer to the closest dollar. | null | b4553eda-5af3-4580-85b0-95fe19f6202f |
FinCode | null | null | Aln Co. incurred the following expenses during the current period: Routine on-going efforts to improve an existing product $50000 Trouble-shooting in connection with breakdowns during commercial production $75000 Routine testing of products during commercial production for quality-control purposes $100000 What is the total amount of research and development expense incurred by Aln during the current period? Answer to the nearest dollar. | null | feaa7996-960f-4d4e-8a44-a44f8f1146f8 |
FinCode | null | null | A 20% target contribution margin is set for Duct which is a new product with the following unit costs:
Manufacturing costs Variable $12
Fixed 8
Selling & admin. Costs Variable $3
Fixed 5
What is Duct's target selling price? Answer to the nearest cent. | null | 7774a20a-e0ac-4215-93f0-cf59b6794c47 |
FinCode | null | null | Securities A, B and C have an expected return of respectively 7%, 12% and 5%. What is the expected return of an equal weighted portfolio composed of Securities A and C? Answer as a percentage. | null | 224d900e-291c-4e51-83af-4c6f2e7f7230 |
FinCode | null | null | A company sells DVD players for $200 per unit. The players have a unit variable cost of $160. The company estimates that it will sell one home entertainment system for every four DVD players sold. Home entertainment systems have a unit variable cost of $460 and sell for $600 per unit. The company's fixed costs are $90000. Assuming that the sales mix estimate is correct how many DVD players need to be sold for the company to break even? Answer in number of DVD players. | null | 1d9438ca-2e8e-4d5b-8004-3b5408f028e1 |
FinCode | null | null | Darv Co. had a current ratio of 3-to-1 and a quick ratio of 1-to-1. Current liabilities were $322000. What was the total amount for inventory and prepaid expenses? Answer to the nearest dollar. | null | 06660269-6843-4e0c-99a3-6e479cf5ab8c |
FinCode | null | null | An investment will pay out $10 p.a. forever. What is that investment worth if the market discount rate is 5%? Answer to the nearest dollar. | null | 18ae483b-c2dd-4658-ac56-bb1212d5639d |
FinCode | null | null | The expected selling price for a new product is $19.00. Management's goal is to obtain a 20% contribution margin on all sales. If the new product has variable selling and distribution costs of $3.00 per unit what is the product's target variable manufacturing cost? Answer to the closest cent | null | a52b3836-db3e-49db-a6b5-afa4ac67bbf2 |
FinCode | null | null | In the current year Vinton exchanged unimproved land for an apartment building. The land had a basis of $300000 and a fair market value (FMV) of $420000 and was encumbered by a $100000 mortgage. The apartment building had an FMV of $550000 and was encumbered by a $230000 mortgage. Each party assumed the other's mortgage. What is Vinton's basis in the office building? Answer to the nearest dollar. | null | c502e80e-5bb9-475f-b688-7f814a7aeaa3 |
FinCode | null | null | What is the price of a two-year bond (face value $100), paying 4% coupons semi-annually, with a yield of 8%? Answer to the nearest cent. | null | 62a8d66a-723c-4c08-86da-4ffb257d05f1 |
FinCode | null | null | What is the present value of $10 received in two years' time if the discount rate is 9%? Answer to the closest cent. | null | f4e8b0e8-eccb-4fdb-a845-fc71ad47036b |
FinCode | null | null | If the amount of money that can be created from an additional deposit of $200 in a deposit account is $2,500, what is the money multiplier? Answer to one decimal place. | null | d7d655e9-684c-40a6-b279-30bc98e82c64 |
FinCode | null | null | West is single has no dependents and does not itemize. West provides the following information regarding his current-year's return:
Long-term capital gain $15000
Percentage depletion in excess of property's adjusted basis 9000
Dividends from publicly-held companies 10000
What is the amount of West's AMT tax preference items? Answer to the nearest dollar. | null | 7ee06e7b-645c-45dd-8753-71128bf5258e |
FinCode | null | null | Gem Inc. has paid a dividend of $4.55 in the current year. From next year onwards, annual dividend will grow at an indefinite rate of 2%. The company's shareholders require an 8% return to compensate for the risk associated with equity shares. What is the intrinsic value of the stock? Answer to the closest cent. | null | 4ea90e1d-898c-49a6-9449-66971997a8c9 |
FinCode | null | null | A T-bill has a face value of $1 million and 180 days until maturity. The security is selling for $970,000. What is the yield on a bank discount basis? Assume there are 360 days in a year. Answer as a percentage to two decimal places. | null | f74df73b-92ab-450d-a56d-125d0c85dbcb |
FinCode | null | null | Simm Co. has determined its December 31 inventory on a LIFO basis to be $400,000. Information pertaining to the inventory follows:
Estimated selling price: $408,000
Estimated cost of disposal: 20,000
Normal profit margin: 60,000
Current replacement cost: 390,000
At December 31, what should be the amount of Simm's inventory? Answer to the nearest dollar. | null | 4118d94d-7f44-4cc0-9fcd-6dfe62c5d100 |
FinCode | null | null | On January 1, year 1, a company purchased equipment for $100 million. The equipment consists of four major components, of which two components comprise 80% of the total cost and each has a 20-year useful life. The remaining two components have costs of $10 million each; one of them has a useful life of four years, and the other has a useful life of five years. The company applies the cost model to the equipment and uses the straight-line method of depreciation. Under IFRS, what is the depreciation expense for the year ended December 31, year 1? Answer to the nearest dollar. | null | 4412c5bd-b6c4-4fea-9627-bea37504626c |
FinCode | null | null | Sash Imperial has undertaken a contract to build a railroad line. The project will take three years to complete and Sash is expected to receive $40.00 million on completion. Total project costs are estimated at $31 million. At the end of the first year Sash has spent $12.00 million and expects to incur a total loss of $0.50 million over the remaining project term. Sash complies with U.S. GAAP. What is the amount recognized by Sash in its income statement at the end of Year 1, in relation to the project? Answer in the millions of dollars to two decimal places. | null | aad63dd4-1176-4f0b-b0cc-aafc6b8b492d |
FinCode | null | null | King, Inc. owns 70% of Simmon Co's outstanding common stock. King's liabilities total $450,000, and Simmon's liabilities total $200,000. Included in Simmon's financial statements is a $100,000 note payable to King. What amount of total liabilities should be reported in the consolidated financial statements? Answer to the closest dollar. | null | 8a94792e-7dd4-432e-a400-1353c237d56c |
FinCode | null | null | Best County's capital projects fund had the following receipts during the year:
Transfer from the general fund: $100000
Federal capital grant: $75000
Special assessment for capital improvements: $300000
What amount of revenues should Best County report in its capital projects fund at the end of the year? Answer to the closest dollar. | null | 8ea34fbd-2d75-473b-bf1e-e4c70f1b098d |
FinCode | null | null | Sunshine Corp. a wholly owned subsidiary of Pierpoint Corp. purchased land from Pierpoint for its fair market value of $10000 on January 1 of the previous tax year. Pierpoint's adjusted basis of the land on the date of sale was $8000. During the current tax year Sunshine sold the land for $9000 to an unrelated taxpayer. What gain or loss will be reported on a consolidated tax return filed by Sunshine and Pierpoint for the current tax year? Answer to the nearest dollar. | null | a0e98c11-216a-46e2-8b72-16ffe757898f |
FinCode | null | null | Spark Co. buys cordless phones for $125 each and sells them for $200 each. Spark pays a sales commission of $25 per phone sold and monthly fixed costs are $3000. Assuming Spark desired a profit of 10% of sales how many units must Spark sell? Answer in units. | null | ce49112c-1697-45ed-84d9-65263cc2c7f5 |
FinCode | null | null | Michael Poole is an equity analyst at Dave Associates, a financial services firm. Poole is estimating the firm's cost of equity using the dividend discount model approach. He has learnt that the Gordon's growth model is particularly useful in deriving the required rate of return when this approach is used. The company has paid a dividend of $2.5 per share in the previous year. The current market price per share is $25. The company's retention rate and return on equity is 40% and 10%, respectively. What is the cost of equity using the dividend discount model? Answer as a percentage to two decimal places. | null | f8b084ea-f17a-4531-8b2d-e23850913e9e |
FinCode | null | null | On May 1 of the prior year, Baker purchased equipment with a five-year useful life for a cost of $10,000. Baker adopted the MACRS depreciation system and did not utilize any special depreciation deductions. On March 1 of the current year, Baker sold the equipment. The MACRS depreciation schedule for five-year property is listed below:
First year - 20.00%
Second year - 32.00%
Third year - 19.20%
What amount of depreciation can Baker deduct in the current year? Answer to the closest dollar. | null | ed4a489f-cfb2-4459-8dc9-e3883d2ea229 |
FinCode | null | null | Aston and Becker are equal partners in AB Partnership. In the tax year the ordinary income of the partnership is $20000 and the partnership has a long-term capital gain of $12000. Aston's basis in AB was $40000 and he received distributions of $5000 during the year. What is Aston's share of AB's ordinary income? Answer to the nearest dollar. | null | f263ecb8-8bf8-42ad-8679-f7f52dcd0391 |
FinCode | null | null | Grant Co.'s sales budget shows the following projections for the year ending December 31: Quarter Units First 30000 Second 40000 Third 22500 Fourth 27500 Total 120000 Inventory at the beginning of the year was budgeted at 9000 units. The quantity of finished goods inventory at the end of each quarter is to equal 30% of the next quarter's budgeted sales of units. What amount should the production budget show for units to be produced during the first quarter? Answer in units. | null | 7b24ad4d-8ad4-48b0-ae44-00eb96d24a60 |
FinCode | null | null | A U.S. manufacturer has a production operation in Mexico. The product costs 116.50 pesos to produce and ship to Europe, where the product sells for 20 euros. If 0.1099 U.S. dollars are required to buy one Mexican peso, and 0.8928 U.S. dollars are required to buy one euro, what amount of U.S. dollars is the profit on the sale? Answer to the closest cent. | null | fb467581-2aea-4198-bd91-5982cce8ca1b |
FinCode | null | null | A 181-day Treasury bill has a face value of $10.000 million and a present value of $9.219 million. Assuming a 360-day year, what is the instrument's discount rate? Answer as a percentage with two decimal places | null | bdeadb8c-588f-46e7-bef4-5edd5388b17b |
FinCode | null | null | Alex Gerald is examining his budget constraint given his current income and expenditures. Gerald has a total budget of $125 per week to spend on milk or juices. The price of milk is $3.5/litre and the price of juice is 2.5/litre. If the quantity of milk is measured on the horizontal axis of the budget constraint, what is the slope of the budget constraint? Answer to two decimal places. | null | 89cfb659-d19d-4117-b19f-20d75ba2089d |
FinCode | null | null | Zarr Town levied property taxes of $500000 of which 1% is expected to be uncollectible. During the year Zarr Town collected $450000. What amount of property tax revenue should Zarr Town report in its government-wide statement of activities for the current year? Answer to the nearest dollar. | null | e6b00e54-0741-49b0-9ee6-28a5d08df363 |
FinCode | null | null | Lake Trust a simple trust reported the following items of income and expense during the year:
Dividend income: $2500
Taxable interest income: 2000
Capital gains (allocable to corpus): 5000
Accounting fees (allocable to income): (500)
Trustee fees (allocable to income): (750)
What is Lake's distributable net income? Answer to the nearest dollar. | null | d2a6ee7b-19b6-457c-bdf8-9e16403c303a |
FinCode | null | null | A portfolio manager has purchased $2.5 million worth of equity investments for several of its client accounts. The purchase is financed using a combination of cash and equity. The manager must abide by a minimum margin requirement of 35%. Given the maintenance margin requirement, if the purchase price rises by 15%, what is the return on equity investment in the manager's leveraged position (ignoring interest costs and commission)? Answer as a percentage to two decimal places. | null | 140e2677-ab5d-4e82-9433-ee043547b919 |
FinCode | null | null | Carter Co. had the following items on its balance sheet at the end of the current year:
Cash and cash equivalents $ 200000
Short-term investments 100000
Accounts receivable 400000
Inventories 600000
Patent 10 years 300000
Equipment 1000000
Accumulated depreciation 200000
The amount of current liabilities at the end of the current year was $640000. What is Carter's working capital at the end of the current year? Answer to the closest dollar. | null | 8a9f6d92-5ac6-4017-8ffe-495d76793e2a |
FinCode | null | null | White Rock Enterprises (WREN) reported income tax expense of $6.5 million over the past year. During the same year, taxes payable and deferred tax assets increased by $2 million and $0.85 million respectively. WREN reports no deferred tax liabilities. Over the recent year, what is the cash paid by WREN for income taxes? Answer in millions of dollars to two decimal places. | null | f190435b-394f-4ad5-a452-996483fd3f64 |
FinCode | null | null | Rune Co.'s checkbook balance on December 31 was $10000. On that date Rune held the following items in its safe: $4000 check payable to Rune postdated January 3 and not included in the December 31 checkbook balance in collection of a sale made in December. $1000 check payable to Rune deposited December 15 and included in the December 31 checkbook balance but returned by the bank on December 30 stamped NSF". The check was redeposited on January 2 and cleared on January 9. What amount should Rune report as cash in its December 31 balance sheet?" Answer to the nearest dollar. | null | 0043370f-ad80-4a33-b82f-1508ecb0f5a5 |
FinCode | null | null | A share with standard deviation of 46% is trading in a market where the expected return on the market portfolio is 16% and its standard deviation is 28%. If the risk free rate is 4.5% and the share is uncorrelated with the market, what is the expected return of the share? Answer as a percentage with two decimal places. | null | d1ce4ee5-3cd6-4eef-a0c3-4344d5214a0b |
FinCode | null | null | Smile Inc. purchased a computer on May 1 for $12000 with an estimated salvage value of $1500 and a 3-year life. What is the depreciation expense for the year ended December 31 using the double-declining method of depreciation? Answer to the nearest dollar. | null | 7dddb422-52f5-4ab8-af65-063e313b9a3f |
FinCode | null | null | Ilkot Inc. is a manufacturer of skiing equipment that has purchased an automated paint coating unit for $600,000. The unit has an estimated useful life of eight years and a residual value of $10,000. Using the double declining balance method, what is the unit's net book value in the second year of its useful life? Answer to the closest dollar. | null | e89cdb26-3936-4482-9429-5a9b5a9d617a |
FinCode | null | null | Smythe Co. invested $200 in a call option for 100 shares of Gin Co. $.50 par common stock, when the market price was $10 per share. The option expired in three months and had an exercise price of $9 per share. What was the intrinsic value of the call option at the time of initial investment? Answer to the nearest dollar. | null | d6e82bdb-c25d-467f-b6c9-c167c5e4dfa9 |
FinCode | null | null | A trader purchases a share of stock on margin at its current market price of $80. The initial margin requirement is 30%. What is the margin requirement for each share of stock? Answer to the nearest dollar. | null | 28c1c225-7705-43b7-8708-9059686df1f3 |