DEPARTMENT OF ACCOUNTANCY COMM 217 ALL SECTIONS
Duration: 3 hours
Instructions (very important):
1. This examination paper consists of 11 pages including this page. Please make sure your copy has all pages before commencing to write.
2. Make sure that your FULL name (last name first), Student ID and Section Letter are on ALL of the three documents: computer input sheet, answer booklet and examination paper.
3. You 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 graded.
4. Read the questions carefully and budget your time wisely. Show all calculations.
5. This is a closed book examination. However, a silent hand-held (not graphical) calculator and one standard language (not electronic) dictionary are permitted.
6. Invigilators will not answer questions (unless you think there is an error in the question).
7. Return the exam along with the computer input sheet and answer booklet(s) when you have finished.
|Question |Topic |Total Marks |
|1 |Multiple Choice |24 |
|2 |Accounting for Long-lived Assets |16 |
|3 |Accounting for Bonds |21 |
|4 |Reporting and Interpreting Cash Flows |19 |
|5 |Analysis of Financial Statements |20 |
|Total | |100 |
QUESTION 1 (24 marks; 43 minutes) Multiple Choice
For each of the following, choose the letter that corresponds to the best answer, and show your answer on the computer input sheet. Each correct answer is worth 1.5 marks.
|1. |Which statement regarding the indirect method of reporting cash from operating activities is false? |
| |Depreciation expense is added back to profit. |
| |An increase in trade receivables is added to profit. |
| |An increase in trade payables is added to profit. |
| |An increase in merchandise inventory is subtracted from profit. |
|2. |On August 1, Energy Company purchased a coal digging machine in exchange for $30,000 cash and 100 shares of AT common shares held |
| |by Energy Company as an investment. The AT common shares cost Energy Company $5,000 and had a market value of $4,200 on August 1. |
| |Energy Company paid $200 in shipping costs and $700 in installation costs. What is the total amount that should be debited to the |
| |Machinery account by Energy Company? |
| | |
| |$35,100 B) $35,400 C) $35,500 D) $36,