TEST BANK FOR Financial & Managerial Accounting for MBAs, 6th Edition by Easton, Halsey, McAnally, Hartgraves & Morse graded A+

TEST BANK FOR Financial & Managerial Accounting
for MBAs, 6th Edition by Easton, Halsey, McAnally,
Hartgraves & Morse




CambridgeBBusinessBPublishers,B©201
PracticeBQuizBSolutions,BModuleB 8
1 1-1

, PracticeBQuizBSolutions


ModuleB1B–BFinancialBAccountingBforBMBAs

1. WhichBofBtheBfollowingBorganizationsBdoesBnotBcontributeBtoBtheBformationBofBGAAP?

a. FASBB(FinancialBAccountingBStandardsBBoard)
b. IRSB(InternalBRevenueBService)
c. AICPAB(AmericanBInstituteBofBCertifiedBPublicBAccountants)
d. SECB(SecuritiesBandBExchangeBCommission

)BAnswer:Bb


2. RockyBBeachBreportsBtheBfollowingBdollarBbalancesBinBitsBretainedBearningsBaccount.

($Bmillions) 2017 2016
RetainedBearnings…………. 8,968.1 8,223.9

DuringB2017,BRockyBBeachBreportedBnetBincomeBofB$1,351.4Bmillion.B WhatBamountBofBdividends,BifBa
ny,BdidBRockyBBeachBpayBtoBitsBshareholdersBinB2017?

a. $607.2Bmillion
b. NoBdividendsBpaid
c. $301.2Bmillion
d. $744.2Bmillion

BAnswer:Ba

ComputationBofBdividends
BeginningBretainedBearnings,B2017B............................................................................ $8,223.9
+ NetBincomeB................................................................................................................. 1,351.4
– CashBdividends........................................................................................................... (?)
= EndingBretainedBearnings,B2017B................................................................................. $8,968.1

Thus,BdividendsBwereB$607.2BmillionBforB2017.




CambridgeBBusinessBPublishers,B©201
8B1-2 FinancialB&BManagerialBAccountingBforBMBAs,B5thBEditi
on

,3. AtBtheBbeginningBofBaBrecentByear,BTheBWaltBDisneyBCompany’sBliabilitiesBequaledB$26,197Bmillio
n.BDuringBtheByear,BassetsBincreasedBbyB$400BmillionBandByear-
endBassetsBequaledB$50,388Bmillion.BLiabilitiesBdecreasedB$100BmillionBduringBtheByear.

WhatBwereBbeginningBandBendingBamountsBforBWaltBDisney’sBequity?

a. $26,197BmillionBbeginningBequityBandB$24,291BmillionBendingBequity
b. $23,791BmillionBbeginningBequityBandB$27,042BmillionBendingBequity
c. $23,791BmillionBbeginningBequityBandB$24,291BmillionBendingBequity
d. $27,042BmillionBbeginningBequityBandB$25,183BmillionBendingBequit

yBAnswer:Bc

UsingBtheBaccountingBequationBatBtheBbeginningBofBtheByear:

Assets($50,388B-B$400) =BLiabilities($26,197)B+BEquity(?)
Thus:BBeginningBEquity =B$23,791

UsingBtheBaccountingBequationBatBtheBendBofBtheByear:
Assets($50,388) =BLiabilities($26,197B-B$100)B+BEquity(?)
Thus:BEndingBEquity =B$24,291


4. AssumeBthatBStarbucksBreportedBnetBincomeBforBaBrecentByearBofB$564Bmillion.B ItsBstockholder
s’BequityBisB$2,229BmillionBandB$2,090Bmillion,Brespectively.

ComputeBitsBreturnBonBequity.

a. 13.0%
b. 22.8%
c. 26.1%
d. 32.7%

Answer:Bc

ROEB B =BNetBincomeB/BAverageBstockholders’Bequity
=B$564BmillionB/B[($2,229BmillionB+B$2,090Bmillion)B/B2]B=B26.1%


5. NokiaBmanufactures,Bmarkets,BandBsellsBphonesBandBotherBelectronics.BAssumeBthatBNokiaBreporte
dBnetBincomeBofB€3,582BonBsalesBofB€34,191BandBtotalBstockholders’BequityBofB€14,576BandB€14,871,Br
espectively.

WhatBisBNokia’sBreturnBonBequity?

a. 24.3%
b. 42.3%
c. 17.7%
d. 10.5%

Answer:Ba

ReturnBonBequityBisBnetBincomeBdividedBbyBtheBaverageBtotalBstockholders’Bequity.BNoki
a’sBROE:B €3,582B/B[(€14,576B+B€14,871)B/B2]B=B24.3%.




CambridgeBBusinessBPublishers,B©201
PracticeBQuizBSolutions,BModuleB 8
1 1-3

, 6. TheBtotalBassetsBofBDell,BInc.BequalB$15,470BmillionBandBitsBequityBisB$4,873Bmillion.B WhatBisBt
heBamountBofBitsBliabilities,BandBwhatBpercentageBofBfinancingBisBprovidedBbyBDell’sBowners?

a. $20,343Bmillion,B24.0%
b. $10,597Bmillion,B31.50%
c. $10,597Bmillion,B68.5%
d. $20,343Bmillion,B76.0%

Answer:BbB

($Bmillions)
Assets = Liabilities + Equity
$15,470 $10,597 $4,873

DellBreceivesBmoreBofBitsBfinancingBfromBnonownersB($10,597Bmillion)BversusBownersB($4,873Bmillion
).BItsBownerBfinancingBcomprisesB31.5%BofBitsBtotalBfinancingB($4,873Bmillion/B$15,470Bmillion).


7. TheBtotalBassetsBofBFordBMotorBCompanyBequalB$315,920BmillionBandBitsBliabilitiesBequalB$304,2
69Bmillion.B WhatBisBtheBamountBofBFord’sBequityBandBwhatBpercentageBofBfinancingBisBprovidedBby
BitsBowners?



a. $B 11,651Bmillion,B 3.9%
b. $620,189Bmillion,B49.1%
c. $620,189Bmillion,B50.9%
d. $B 11,651Bmillion,B 3.7%


Answer:BdB

($Bmillions)
Assets = Liabilities + Equity
$315,920 $304,269 $11,651

FordBreceivesBmoreBofBitsBfinancingBfromBnonownersB($304,269Bmillion)BversusBownersB($11,651Bmill
ion).BItsBownerBfinancingBcomprisesB3.7%BofBitsBtotalBfinancingB($11,651Bmillion/B$315,920Bmillion).BT
heBrelativelyBlowBlevelBofBequityBcapitalBisBprimarilyBtheBresultBofBtheBfactBthatBFordBisBactuallyBaBblend
BofBtwoBcompanies:BtheBautomotiveBmanufacturingBcompanyBandBtheBfinancialBsubsidiary.BTheBfinanci

alBsubsidiaryBhasBaBbalanceBsheetBsimilarBtoBthatBofBaBbank,BthatBis,BrelativelyBlittleBequityBcapital.BTh
eBblendBofBtheseBtwoBoperatingBentitiesBresultsBinBaBbalanceBsheetBthatBisBmoreBdependentBonBborro
wedBfundsBthanBwouldBbeBtheBcaseBifBFordBconsistedBsolelyBofBtheBmanufacturingBcompany.




CambridgeBBusinessBPublishers,B©201
8B1-4 FinancialB&BManagerialBAccountingBforBMBAs,B5thBEditi
on