University of Windsor

Master of Management Program

Fall 2020
Midterm Exam
October 29, 2020.

NAME Tamzida Aureen (Insert Your Name)

STUDENT I.D. NUMBER 110029482 (Insert Your Number)

Direction: Insert your solutions to the exam questions below. Use only this one excel sheet.
Scroll down the page to provide your solution to each question as noted below.

Question 1. ( Provide your balance sheet for Black and Decker here)
Black and Decker Ltd
Balance sheet
31-Dec-19
Assets: Amount Liabilities and Sh
Current assets: Current Liab
Current Liabilities
Cash 1,083,200
Account receivable 832,800 Long term liabilities:
Prepaid Expense 308,800 Bonds Payable
Inventory 777,100 Bank loan payable
Total Current Asset 3,001,900 Total long term liabilities
Non Current Assets:
Property Plant and Equipment 473,400 Shareholders' equity:
Common shares
Others: Retained earnings
Goodwill 2,019,900 Total Shareholders' equity
Total Assets 5495200 Total Liabilities & shareholders' equity

Question 2. Place your matching letter to each item below.

Insert letter for your

correct match below

1.Expenses B

2.Unearned revenue A

3.Prepaid expenses C
4.Revenue recognition E

5.Revenue D

Question 3. (need not show your detailed calculations)

1. The gross profit margin is 28.65%

2.The net profit margin is 5.18%

The ending inventory cost using FIFO is $ _______ 240

The cost of goods sold using FIFO is $ _______ 46

The ending inventory cost using weighted average cost is $ 37.92

The cost of goods sold using weighted average cost is $ _____ 72.68

Question 4 (need not show your detailed calculations):

1. The current ratio is: ______________________ 1.51

2.The working capital amount is : $ _____________ 2174574

3.The total debt to equity ratio is : _____________ 1

4.The total debt to asset ratio is : ______________ 0.5

Question 5( need not show your detailed calculations):

a. The allowance for uncollectible accounts should be: _____ 193

b.Accounts receivable will appear in the balance sheet as shown below:

_____________________________________________________ 6817

Question 6:Note how the basic accounting equation is affected for each transaction below.

Transaction Number A = L + Assets

E
I or (D)

1.Issued common shares to investors for $ 20,000 cash __ I

2.Paid $ 1,850 cash for rent to the landlord __ D

3.Sold inventory for $ 2,500 cash I ,D

4.Sold inventory for $ 7,000 on account D,I

5.Paid $ 1,750 cash for employee wages D

6.Received $6,000 cash from a customer for their account. I ,D

7.Declared and paid $ 550 in dividends D

8.Paid accounts payable $ 2000 in cash D

9.Purchased equipment for cash of $ 25,000 and a note

payable for $ 100,000 I ,D

10.Paid repairs expense for $ 3,500 in cash D

Question # 7.(Need not show detailed calculations)

a.The anount of annual depreciation should be : $ _______ 40500

 b.The carrying value of the building at Dec. 31, 2021 is: $ _______ 819000

c.The gain (loss) on the sale of the building would be : $ _______ loss 68250

Question #8.(Need not show detailed calculations):

a.Explain your reasoning below as to whether the bond will be issued at a premium or discount

As the market interest rate is $70,000 and the annual interest rate is $50,000. So the Market interest rateis higher than the annual in

b.(i) The method required by IFRS to amortize the discount is the : Effective interest method

b.(ii)Explain below whether interest expense in the financial statements will be more or less than
the amount of interest actually paid and why ?

The interest expense in the financial statements will be less than the amount of interest actually paid as the discount will be d

Question # 9. (need not show your detailed calculations)

a. The three important dates with respect to the payment of diviends are as follows:

1 Dividend issue date

2 Maturity date

3 Interest payment date

b.(i)
The journal entry to record the stock dividend is as follows:

Debit Credit
retained earning Dr 1000000
common share cr 1000000
b.(ii)
The journal entry to record the stock split is as follows:

Debit Credit
It does not need any journal entry fo stock split

b.(iii)
The earnings per share for DEF Corporation for 2018 is:

$3 per common share

 Liabilities and Shareholders equity:
Current Liabilities: Amount
1,195,900

1,285,200
1,715,000
3,000,200

149,900
1,149,200
1299100
areholders' equity 5495200
Liabillities Equity
I or (D) I or (D)

________ I

________ D

________ _______

________ _______

________ D

________ _______

________ D

D _______

I _______

________ D
rateis higher than the annual interest rate. In this case we should sale in discount.

y paid as the discount will be deducted from $10000000.