1. A company purchased treasury stock for $20,800. The treasury stock was initially issued for $16,500 and had a $6,800 par value. Which of the following statements correctly describes the effects of the treasury stock purchase?

A. Stockholders' equity increases $16,500.

B. Net income decreases by $9,700.

C. Stockholders' equity decreases $20,800.

D. Net income increases by $9,700.

2. On January 1, 2013, Jason Company issued $5.2 million of 12-year bonds at a 10% stated interest rate to be paid annually. The following present value factors have been provided:

Time Period	Interest	PV of $1	PV of a $1 Annuity
12	10%	0.319	6.814
12	8%	0.397	7.536
12	12%	0.257	6.194

What was the issuance price of the bonds if the market rate of interest was 8%?

A. $6,025,620.

B. $5,700,620.

C. $5,200,000.

D. $5,983,120.

3. A company reported net income of $200,100 during 2014. The company reported depreciation expense of $35,500, patent amortization of $10,250 and a $5,100 loss on the sale of equipment. Using the indirect method, how much is the company's cash flow from operating activities?

A. $245,850.

B. $250,950.

C. $240,750.

D. $235,600.

4. You have a goal of having $220,000 five years from today. The return on the investment is expected to be 10% and will be compounded semi-annually. The amount that needs to be invested today is closest to: (Table A.1, Table A.2, Table A.3, and Table A.4) (Use appropriate factor(s) from the tables provided.)

A. $135,058.

B. $135,758.

C. $110,000.

D. $146,667.

5. MusicPod's earnings per share ratios were $2.59 and $2.31 respectively for 2015 and 2014. MusicPod's stock was trading at $65 and $59.50 per share at the end of 2015 and 2014 respectively. The company paid cash dividends per share of $0.97 in 2015 and $0.75 in 2014. Total stockholders' equity was $13,692 million and $12,016 million in 2015 and 2014 respectively. The common shares outstanding were approximately 1,788,000 in both 2015 and 2014. MusicPod's price/earnings ratio for 2015 is closest to:

A. 25.1

B. 2.7

C. 25.8

D. 67.0

6. Rae Company purchased a new vehicle by paying $11,300 cash on the purchase date and agreeing to pay $4,300 every three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental borrowing rate is 8%. The liability reported on the balance sheet as of the purchase date, after the initial $11,300 payment was made, is closest to: (Table A.1, Table A.2, Table A.3, and Table A.4) (Use appropriate factor(s) from the tables provided.)

A. $86,000.

B. $81,611.

C. $70,311.

D. $97,300.