QUESTION 11

Pro forma financial information:

	a.	Is illegal
	b.	Is found in the statement of stockholders equity
	c.	Usually focuses on pro forma earnings, usually on a non-GAAP basis
	d.	Is always presented on a generally accepted accounting principles (GAAP) basis

1 points

QUESTION 12

ABC Co. records marketable securities as trading securities. This means that:

	a.	These are recorded at fair value and gains & losses reported directly to stockholders equity
	b.	These are recorded at fair value and gains & losses reported as extraordinary items
	c.	These are recorded at fair value and gains & losses reported as operating income
	d.	These are recorded at amortized cost

1 points

QUESTION 13

XYZ has the following information on fixed assets for 2001 (in millions): net property plant & equipment, $564; accumulated depreciation, $260; ending gross investment, $824; and depreciation expense, $95. XYZ's fixed assets have an average depreciable life of:

	a.	31.6%
	b.	2.7 years
	c.	36.5%
	d.	8.7 years

1 points

QUESTION 14

Given the information from Question 13 above, XYZ's fixed assets have an average age of:

	a.	36.5%
	b.	2.7 years
	c.	8.7 years
	d.	31.6%

1 points

QUESTION 15

Apila has the following information on income tax for 2001: income tax expense, $409; pretax income, $1,231; taxes payable, $257; net income, $876. Apila has an effective tax rate of:

	a.	46.7%
	b.	20.9%
	c.	71.2%
	d.	33.2%

1 points

QUESTION 16

Capital leases:

	a.	Are recorded at amortized cost less gains & losses, which are recorded directly to stockholders equity
	b.	Are recorded as rent expense monthly
	c.	Transfer risks and rewards of ownership & recorded as both assets & liabilities
	d.	Require off-balance-sheet reporting

1 points

QUESTION 17

Big Steel Co. has the following accounts:

Current assets		$10,000
Property, plant & equipment	$240,000
Less: accumulated depreciation	100,000	140,000
Total assets		$150,000
Gross profit	$95,000
Depreciation expense	$25,000
Tax expense	$10,000
Net income	$55,000

The average age of fixed asset is estimated to be:

	a.	3 years
	b.	1 year
	c.	2 years
	d.	4 years

1 points

QUESTION 18

Given the information from Question 17, the average age % of fixed assets is:

	a.	71.4%
	b.	25.0%
	c.	10.0%
	d.	41.7%

1 points

QUESTION 19

Cooper Copper Co. uses straight-line depreciation for financial reporting and double declining balance for tax. Using straight line the company reports tax of $41,000; under double declining balance tax is $34,000. Cooper would record:

	a.	Deferred tax liability of $7,000
	b.	Taxes payable of $41,000
	c.	Deferred tax asset of $34,000
	d.	Deferred tax asset of $7,000