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Q:
Bird Corporation purchased an 80% interest in Brush Corporation on July 1, 2010 at its book value, and on January 1, 2011 its Investment in Brush account was $300,000, equal to its book value. Brush's net income for 2011 was $99,000 (earned uniformly); no dividends were declared. On March 1, 2011, Bird reduced its interest in Brush by selling a 20% interest, one-fourth of its investment, for $84,000.If Bird uses the "actual-sale-date" sales assumption, its gain on the sale and income from Brush for 2011 will beA) Gain on SaleIncome from Brush$5,700$59,400B)Gain on SaleIncome from Brush$5,700$62,700C)Gain on SaleIncome from Brush$21,360$59,400D)Gain on SaleIncome from Brush$21,360$62,700
Q:
In a partnership,
A) each partnerʹs liability is limited to their investment in the company.
B) profits are taxed at both the corporate rate and the personal income tax rate.
C) upon the death of a partner it may be necessary to sell the business.
D) there is a separation of ownership and management like in a corporation.
Q:
A __________ gives its holder the right to buy an asset for a specified exercise price on or before a specified expiration date.
A. call option
B. futures contract
C. put option
D. interest rate swap
Q:
Refer to the above figure. Which point(s) represents the lowest level of utility?A) Points A & C B) Point B C) Point C only D) Point D
Q:
Use the following information to answer the question(s) below.Bird Corporation purchased an 80% interest in Brush Corporation on July 1, 2010 at its book value, and on January 1, 2011 its Investment in Brush account was $300,000, equal to its book value. Brush's net income for 2011 was $99,000 (earned uniformly); no dividends were declared. On March 1, 2011, Bird reduced its interest in Brush by selling a 20% interest, one-fourth of its investment, for $84,000.If Bird uses a "beginning-of-the-year" sale assumption, its gain on sale and income from Brush for 2011 will beA)Gain on SaleIncome from Brush$5,700$59,400B)Gain on SaleIncome from Brush$5,700$62,700C)Gain on SaleIncome from Brush$9,000$59,40D)Gain on SaleIncome from Brush$9,000$62,70
Q:
The U.K. stock index is the _________.
A. DAX
B. FTSE
C. GSE
D. TSE
Q:
An investor buys a T-bill at a bank discount quote of 4.80 with 150 days to maturity. The investor's bond equivalent yield on this investment is
_____.
A. 4.8%
B. 4.97%
C. 5.47%
D. 5.74%
Q:
QuantityPer WeekTotal UtilityAmyRobertDavidMichelle0000015.01006006029.91901200130314.72701800220419.43402400310524.04003000425628.54503600575732.94904200900837.252048001275941.451054001770Refer to the above table. Robertʹs utility schedule showsA) diminishing marginal utility throughout the entire schedule.B) initially increasing marginal utility and then decreasing marginal utility.C) initially decreasing marginal utility and then increasing marginal utility. D) increasing marginal utility throughout the entire schedule.
Q:
__________ is not a money market instrument.
A. A certificate of deposit
B. A Treasury bill
C. A Treasury bond
D. Commercial paper
Q:
The cross elasticity of demand isA) the percentage change in the demand divided by the percentage change in price of another good.B) the change in the price of one good divided by the change of quantity demanded of another good.C) the percentage change in the quantity demanded of one good divided by the percentage change in the quantity demanded of another good.D) the percentage change in the price of one good divided by the percentage change in the price of another good.
Q:
Pass Corporation owns 80% of Sindy Company, purchased at the underlying book value on January 1, 2010. On January 1, 2010, Pass also purchased $200,000 par value 6% bonds that had been issued by Sindy on January 1, 2007 with a ten-year maturity(due January 1, 2017). Annual interest is paid on December 31. Straight-line amortization is used by both companies.At year-end 2010, the following entry was made on the consolidating worksheet.Bonds Payable $200,000Bond Premium 12,000Loss on Bond Retirement 7,000Interest Income (a)Investment in Sindy Bonds $218,000Interest Expense (b)Required:How much did Pass pay for the bonds?What is the book value of the bonds on the date of purchase?What amount of interest income and interest expense must be eliminated in the entry above designated as (a) and (b)?
Q:
The yield on tax-exempt bonds is ______.
A. usually less than 50% of the yield on taxable bonds
B. normally about 90% of the yield on taxable bonds
C. greater than the yield on taxable bonds
D. less than the yield on taxable bonds
Q:
A value of the absolute price elasticity of demand equal to 0.6 indicates thatA) a 6 percent increase in price leads to a 10 percent decrease in quantity demanded.B) a 10 percent increase in price leads to a 6 percent decrease in quantity demanded. C) a 0.6 percent increase in price leads to a 1 percent decrease in quantity demanded. D) a 1 percent increase in price leads to a 6 percent decrease in quantity demanded.
Q:
Q:
The level of pollution at which the marginal benefits equal the marginal cost of cleaning up is alwaysA) the zero pollution level. B) the optimal quantity of pollution. C) the pollution maximum. D) the pollution minimum.
Q:
Which one of the following is a true statement regarding corporate bonds?
A. A corporate callable bond gives its holder the right to exchange it for a specified number of the company's common shares.
B. A corporate debenture is a secured bond.
C. A corporate convertible bond gives its holder the right to exchange it for a specified number of the company's common shares.
D. Holders of corporate bonds have voting rights in the company.
Q:
Q:
A T-bill quote sheet has 90-day T-bill quotes with a 4.92 bid and a 4.86 ask. If the bill has a $10,000 face value, an investor could buy this bill for
_____.
A. $10,000
B. $9,878.50
C. $9,877
D. $9,880.16
Q:
Which of the following is NOT a program designed to attack poverty?A) Supplementary Security Income B) food stampsC) Social Security D) federal corporate income tax
Q:
Q:
Quantity of LaborHourly Wage RateTotal Marginal Wage Bill Factor Cost0-- -1$10 212 314 416 518 620 In the above table, if the marginal revenue product is $18, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?A) 5; $18 B) 3; $14 C) 3; $18 D) 4; $16
Q:
A __________ gives its holder the right to sell an asset for a specified exercise price on or before a specified expiration date.
A. call option
B. futures contract
C. put option
D. interest rate swap
Q:
Q:
A bond that has no collateral is called a _________.
A. callable bond
B. debenture
C. junk bond
D. mortgage
Q:
A labor union is likely to seek all of the following EXCEPT A) economic improvements for their members.B) safer working conditions.C) increased competitiveness in the labor market.D) increased job security for its members.
Q:
Parkview Holdings owns 70% of Skyline Corporation. On January 1, 2011, Skyline acquires half of the $2,000,000 of bonds originally issued by Parkview on January 1, 2006. The bonds were issued at a stated rate of 5% for 10 years, for $1,920,000. Skyline purchased them for $950,000. Assume that both Parkview and Skyline will use the straight-line method for any bond-related amortization. Annual interest is paid on December 31.Required: Prepare the entries required for the consolidating worksheet for the years ended December 31, 2006 through December 31, 2016.
Q:
Which of the following are true statements about T-bills?
I. T-bills typically sell in denominations of $10,000.
II. Income earned on T-bills is exempt from all federal taxes.
III. Income earned on T-bills is exempt from state and local taxes.
A. I only
B. I and II only
C. I and III only
D. I, II, and III
Q:
ʺA firm should continue to hire more workers as long as wages are low.ʺ Do you agree or disagree? Why?
Q:
Q:
Treasury bills are financial instruments issued by __________ to raise funds.
A. commercial banks
B. the federal government
C. large corporations
D. state and city governments
Q:
The first major law created to control the growth of monopoly power was theA) Sherman Act. B) Clayton Act.C) FTC Act. D) Robinson-Patman Act.
Q:
Q:
Which one of the following is a true statement regarding the Dow Jones Industrial Average?
A. It is a value-weighted average of 30 large industrial stocks.
B. It is a price-weighted average of 30 large industrial stocks.
C. It is a price-weighted average of 100 large stocks traded on the New York Stock Exchange.
D. It is a value-weighted average of all stocks traded on the New York Stock Exchange.
Q:
According to the textbook, what is the reason for the success of Appleʹs strategy of opting for product incompatibility for its iPod but the failure of Sonyʹs same strategy for its Beta videocassettes?
Q:
Which of the following combinations would constitute a vertical merger?
A) General Motors and Bridgestone Tire Company
B) General Motors and Ford Motor Company
C) Philip Morris and RJ Reynolds
D) Philip Morris and Barnes & Nobles Booksellers
Q:
The maximum maturity on commercial paper is _____.
A. 270 days
B. 180 days
C. 90 days
D. 30 days
Q:
Pachelor Corporation owns 70% of the outstanding stock of Stabb Company. On January 1, 2010, Stabb issued $1,000,000 in 7% bonds that matured on January 1, 2015. At the time of issuance, the bonds were sold at a discount of $125,000. At January 2, 2012, Pachelor purchased the bonds for $1,400,000, and constructively retired the debt. Interest is paid annually on January 1. Straight-line amortization is used by both companies.Required:Calculate the gain or loss that the consolidated entity incurred to retire the debt.Prepare eliminating/adjusting entries for the consolidating work papers for the year ended December 31, 2012.
Q:
Commercial paper is a short-term security issued by __________ to raise funds.
A. the Federal Reserve
B. the New York Stock Exchange
C. large well-known companies
D. all of these options
Q:
Q:
Why do firms in a monopolistically competitive industry advertise?
Q:
Which of the following is not a nickname for an agency associated with the mortgage markets?
A. Fannie Mae
B. Freddie Mac
C. Sallie Mae
D. Ginnie Mae
Q:
Q:
A monopolist finds the output (Q*) rate that maximizes profit. It finds the price byA) taking the height of the marginal revenue curve at output rate Q*. B) taking the height of the marginal cost curve at output rate Q*.C) taking the height of the demand curve at output rate Q*.D) setting price equal to marginal cost.
Q:
An individual who goes short in a futures position _____.
A. commits to delivering the underlying commodity at contract maturity
B. commits to purchasing the underlying commodity at contract maturity
C. has the right to deliver the underlying commodity at contract maturity
D. has the right to purchase the underlying commodity at contract maturity
Q:
Popcorn Corporation owns 90% of the outstanding voting common stock of Salty Corporation. On January 1, 2005, Salty issued $1,000,000 face amount of 12%, $1,000 bonds payable at 119.20. The bonds pay interest on January 1 and July 1 of each year and mature on January 1, 2013. On July 2, 2010, Popcorn purchased all of the outstanding bonds at a price of 107.50. Both companies use straight-line amortization.Required:Prepare the journal entries for July 1, 2010 through December 31, 2010 for Popcorn Corporation.Prepare the journal entries for July 1, 2010 through December 31, 2010 for Salty Corporation.Prepare the elimination entries necessary on the consolidating working papers for the year ended December 31, 2010.
Q:
What determines whether the industry long-run supply curve is upward sloping or horizontal?
Q:
Q:
When price is greater than both marginal cost and average variable cost, the perfectly competitive firmA) is maximizing economic profit. B) should increase its level of output. C) should reduce its level of output. D) should stop production.
Q:
Q:
Using the above table, the AFC, the AVC, and the ATC when output is 1 unit areA) $10, $10, and $20, respectively. B) $5, $10, and $15, respectively.C) $0, $10, and $10, respectively. D) $5, $10, and $5, respectively.
Q:
Which of the following is not a characteristic of a money market instrument?
A. liquidity
B. marketability
C. low risk
D. maturity greater than 1 year
Q:
Q:
If the random walk theory is correct, then is there any way to ʺbeat the marketʺ?
Q:
Which of the following is not a true statement regarding municipal bonds?
A. A municipal bond is a debt obligation issued by state or local governments.
B. A municipal bond is a debt obligation issued by the federal government.
C. The interest income from a municipal bond is exempt from federal income taxation.
D. The interest income from a municipal bond is exempt from state and local taxation in the issuing state.
Q:
Q:
Which of the following is not an advantage of a partnership?
A) The taxation of profits
B) The issue of liability
C) The legal paperwork needed to form a partnership
D) Separation of partnerʹs duties
Q:
Deposits of commercial banks at the Federal Reserve are called _____.
A. bankers' acceptances
B. federal funds
C. repurchase agreements
D. time deposits
Q:
Q:
Refer to the above figure. Which point represents the highest level of utility?A) Point A B) Point B C) Point C D) Point D
Q:
The German stock market is measured by which market index?
A. FTSE
B. Dow Jones 30
C. DAX
D. Nikkei
Q:
Q:
QuantityPer WeekTotal UtilityAmyRobertDavidMichelle0000015.01006006029.91901200130314.72701800220419.43402400310524.04003000425628.54503600575732.94904200900837.252048001275941.451054001770Refer to the above table. Amyʹs utility schedule showsA) diminishing marginal utility throughout the entire schedule.B) initially increasing marginal utility and then decreasing marginal utility.C) initially decreasing marginal utility and then increasing marginal utility. D) increasing marginal utility throughout the entire schedule.
Q:
The bid price of a Treasury bill is _________.
A. the price at which the dealer in Treasury bills is willing to sell the bill
B. the price at which the dealer in Treasury bills is willing to buy the bill
C. greater than the ask price of the Treasury bill expressed in dollar terms
D. the price at which the investor can buy the Treasury bill
Q:
Q:
When the price of a video rental was $2.00, ticket sales at the local movie theatre averaged 180 admissions per night. Then the video store reduced the price of a video rental to $1, and the theatre manager reported that ticket sales had fallen to 126 per night. What is the approximate value of the cross price elasticity of demand between video rentals and theatre tickets?A) -0.53 B) +0.30 C) +0.53 D) +1.67
Q:
Which one of the following is a true statement?
A. Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors.
B. Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock.
C. Preferred stockholders have voting power.
D. Investors can sue managers for nonpayment of preferred dividends.
Q:
A 2 percent increase in the price of neckties leads to a 5 percent decrease in the quantity demanded of neckties. The absolute price elasticity of demand isA) 2.5. B) 1. C) 0.4. D) 0.2.
Q:
Q:
_____ is considered to be an emerging market country.
A. France
B. Norway
C. Brazil
D. Canada
Q:
Q:
Generally, as levels of pollution are reduced,
A) marginal benefits from the reduction increase.
B) marginal costs from the reduction increase.
C) marginal costs from the reduction stay the same.
D) marginal costs from the reduction decrease.
Q:
______ would not be included in the EAFE index.
A. Australia
B. Canada
C. France
D. Japan
Q:
The poverty income threshold in the United States was originally calculated byA) multiplying a nutritionally adequate food plan for emergency use by 4. B) multiplying a nutritionally adequate food plan for emergency use by 2. C) multiplying a nutritionally adequate food plan for emergency use by 3. D) multiplying a nutritionally adequate food plan for emergency use by 5.
Q:
An investor in a T-bill earns interest by _________.
A. receiving interest payments every 90 days
B. receiving dividend payments every 30 days
C. converting the T-bill at maturity into a higher-valued T-note
D. buying the bill at a discount from the face value to be received at maturity
Q:
Q:
Quantity of LaborHourly Wage RateTotal Marginal Wage Bill Factor Cost0-- -1$10 212 314 416 518 620 In the above table, if the marginal revenue product is $14, how many workers will the profit maximizing monopsonist hire?A) 2 B) 3 C) 4 D) 5
Q:
The minimum tick size, or spread between prices in the Treasury bond market, is
A. 1/8 of a point.
B. 1/16 of a point.
C. 1/32 of a point.
D. 1/128 of a point.
Q:
There are several theories for allocating constructive gains or losses between purchasing and issuing affiliates. The Agency TheoryA) does so based on the par value of the bonds purchased.B) assigns the entire constructive gain or loss to the parent based on their control of the decision to purchase the bonds.C) assigns the entire constructive gain or loss to the subsidiary based on the need to have the noncontrolling interest share in the retirement of the debt.D) assigns the entire constructive gain or loss to whichever company issued the bonds.
Q:
The most marketable money market security is _____.
A. Treasury bills
B. bankers' acceptances
C. certificates of deposit
D. common stock
Q:
A primary objective of labor unions is toA) secure equal pay for its members.B) have equal power with their employer.C) seek better pay and improved work conditions.D) all of the aboveE) none of the above