题目内容

Which of the following statements about depreciation is TRUE？

A. The initial tax savings created by using accelerated depreciation rather than straight-line depreciation is a deferral because a greater tax payment will be required at the end of the asset’s life.
B. Straight line depreciation yields a decreasing rate of return over the life of the asset.
C. The total depreciation expense calculated with the sum of the years digits method is greater than that given by using the straight-line method.
D. All of these are correct.

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Quad Associates, Inc.抯 net income for 2001 was $892,000 with 400,000 shares outstanding.

A. $2.23.
B. $2.41.
C. $2.11.
D. $2.01.

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Selected information from Hometown, Inc.抯 financial statements for the year ended
December 31, 2001 included the following (in $):
Cash 370,000 Accounts Payable 915,000
Accounts Receivable 820,000 L.T. Deferred Tax Liability 640,000
Inventory 1,050,000 Long-term Debt 2,220,000
Property, Plant & Eq. (net) 3,200,000 Common Stock 1,000,000
Total Assets 5,440,000 Retained Earnings 665,000
Total Liabilities and Equity 5,440,000
LIFO Reserve at January 1 325,000
LIFO Reserve at December 31 500,000
Income Tax Rate (percent) 40
Hometown used the last in, first out (LIFO) inventory cost flow assumption. If Hometown
changed from LIFO to first in, first out (FIFO) in 2001, Hometown 抯 current ratio would:

A. increase from 2.45 to 2.63.
B. be unchanged.
C. increase from 2.45 to 2.99.
D. increase from 2.45 to 2.80.

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Kendall Company 抯 Net Income for 2001 was $830,000 with 200,000 shares outstanding. In 2000, Kendall issued 1,000 six percent $1,000 convertible (into 20 common shares each) bonds that were outstanding since 2000. Kendall 抯 tax rate was 40 percent. What was Kendall Company 抯 diluted earnings per share (Diluted EPS) for 2001？

A. $4.15.
B. $3.77.
C. $4.04.
D. $3.93.

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When local laws governing performance calculation presentation conflict with GIPS, firms that claim compliance with GIPS:

A. should follow the stricter standard between local laws and GIPS.
B. should calculate and present two groups of investment performance data separately complying with local laws and GIPS.
C. should comply with local laws and disclose the conflicts.

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