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WINTER 2010.doc

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Concordia University
COMM 217

CONCORDIA UNIVERSITY FINANCIAL ACCOUNTINGDEPARTMENT OF ACCOUNTANCYCOMM 217 ALL SECTIONSFINAL EXAMINATIONWinter 2010Duration 3 hoursInstructions very important1This examination paper consists of 10 pages including this pagePlease make sure your copy has all pages before commencing to write2You must answer the multiple choice questions by using the computer input sheet darken the letter you choose in pencil on the computer input sheet Write all your answers to the other questions in the examination answer booklet You may answer the questions in any order you prefer Only the answers on the computer input sheet and in the examination booklet will be graded3Read the questions carefully and budget your time wisely Show all calculations4This is a closed book examinationHowever a silent handheld not graphical calculator and one standard language not electronic dictionary are permitted 5Invigilators will not answer questions unless you think there is an error in the question6 Return the exam along with the computer input sheet and answer booklets when you have finishedQuestionTotalTopicMarks1Multiple Choice242Accounting for Longterm Assets203Accounting for Bonds174Reporting cash flows 205Analysis of Financial Statements19Total1002QUESTION 1 24 marks 43 minutesMultiple ChoiceFor each of the following choose the letter that corresponds to the best answer and show your answer on the computer input sheetEach correct answer is worth 15 marks1Brooks Company had the following cash transactions sold equipment for 100000 purchased a building for 80000 sold longterm investments for 20000 and repaid a note payable for 25000 plus 1500 of interest What was the net cash flow from investing activities parentheses indicate an outflowA45000 B 13500C 15000D 400002Intangible assets include which of the followingALeaseholds patents and copyrights BAccounts receivable franchises and trademarksCCopyrights licenses and landDNatural resources patents and trademarks3On March 1 Chapine Company purchased a new stamping machine for 5000 Chapine paid cash for the machine Other costs associated with the machine were transportation costs 300 sales tax paid 200 and installation cost 100 What cost was recorded for the machineA5000B 5200C 5500D 56004Residual value can be defined asAof the amount paid to acquire a tangible operational assetBThe book value of an assetCThe amount expected to be recovered when an asset is disposed of at the end of its estimated useful lifeDThe current value of an asset as of the balance sheet date5Which of the following should be considered when a company is making strategic decisions about how to finance its assetsAWhether they can borrow funds at a lower rate than the return on its assetsBThe debttoequity ratioCThe proportion of current liabilities to longterm liabilitiesDAll of the above are considerations of the decision6To finance a new department Dannella Yogurt Corporation borrowed 80000 at an interest rate of 10 on April 1 2009 If the company is subject to an income tax rate of 40 what is the net of tax interest rate for 2009A4B6C 10D 14
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