Fin621 Mid Term Current Paper (Dec 2010)
Monday, December 06, 2010 Posted In .Midterm Dec 2010 Edit This
fin621 Mid Term Current Paper (Dec 2010)
Aoa every1, I attempted my fin621 ppr today which was not easy.rest were new n tricky. I advise u ppl not to take fin621 easy as I did :(
Subjective Q are as follows:-
Q1. Why businesses record Land at its original cost, even though its of much more value then its cost. Give reasons. 3marks
Q2. Do inventory valuation methods affect profitability of the company? Give examples 3marks
Q3. Is it possible that income summary reports a net loss while the cash generated from operations is a positive figure? Give example 5marks.
Q4. Gul Ahmad company has Cash sales 270,000 credit sales 490,000 account receivable decreased by 320,000.
Calculate net sales reported in income statement. 2marks my ans= 270 + 490 = 760
Calculate cash received from customers on account of account receivable. 3marks my ans = 270 + 320 = 590 hope its correct :(
Subjective Q are as follows:-
Q1. Why businesses record Land at its original cost, even though its of much more value then its cost. Give reasons. 3marks
Q2. Do inventory valuation methods affect profitability of the company? Give examples 3marks
Q3. Is it possible that income summary reports a net loss while the cash generated from operations is a positive figure? Give example 5marks.
Q4. Gul Ahmad company has Cash sales 270,000 credit sales 490,000 account receivable decreased by 320,000.
Calculate net sales reported in income statement. 2marks my ans= 270 + 490 = 760
Calculate cash received from customers on account of account receivable. 3marks my ans = 270 + 320 = 590 hope its correct :(
Another Paper:
( Marks: 5 )
Olympic Inc., had the following cash flows during the current year:
Cash received from customers Rs. 240,000
Interest and dividend received 50,000
Proceeds from the sale of the plant assets 330,000
Cash paid to suppliers and employees 127,000
Cash paid for the purchase of investments 45,000
Cash paid for the purchase of treasury stock 36,000
( Marks: 5 )
Nestle Pakistan has two conflicting objectives. Management wants to report the highest possible earnings to stockholders in the near future yet also wants to minimize the taxable income. Indicate the depreciation method that the company will probably use in its financial statements and its federal income tax return. Explain your answer with the reasons.
Olympic Inc., had the following cash flows during the current year:
Cash received from customers Rs. 240,000
Interest and dividend received 50,000
Proceeds from the sale of the plant assets 330,000
Cash paid to suppliers and employees 127,000
Cash paid for the purchase of investments 45,000
Cash paid for the purchase of treasury stock 36,000
( Marks: 5 )
Nestle Pakistan has two conflicting objectives. Management wants to report the highest possible earnings to stockholders in the near future yet also wants to minimize the taxable income. Indicate the depreciation method that the company will probably use in its financial statements and its federal income tax return. Explain your answer with the reasons.
Another Paper:
1.Which one of the cash flow and income statement is best tool for measuring the profitability of a sound business? Marks 3
2.If the company issues stocks or bonds to pay debts, would u include it in the cash flow statement? Marks 3
3.Calculate the cash flow from operating activities from the given data..( data has forgotton) marks 5
4.Haris is trading In cranes. He has one crane which original cost is rs.60000, the accumulated depreciation is rs.48000, He purchase a new crane which cost is Rs. 75000 and he was given a trade allowance of rs.15000.
a) how much cash Haris will pay? Marks 2
b) what would be the gain or loss if the first crane is disposed off? Marks.3
2.If the company issues stocks or bonds to pay debts, would u include it in the cash flow statement? Marks 3
3.Calculate the cash flow from operating activities from the given data..( data has forgotton) marks 5
4.Haris is trading In cranes. He has one crane which original cost is rs.60000, the accumulated depreciation is rs.48000, He purchase a new crane which cost is Rs. 75000 and he was given a trade allowance of rs.15000.
a) how much cash Haris will pay? Marks 2
b) what would be the gain or loss if the first crane is disposed off? Marks.3
Another Paper:
total quiez=32
mcq =28
2 question =3 numbers
2 question = 5 number
Q suppose we have two stocks i.e. stock A and stock B.stock A has beta of 1.5 and stock B has a beta of 0.75.The expected rate of return on average stock is 13% and the risk free rate of return is 7%.By how much does the required rate on the riskier stock exceeds the required return on the less risky stock. (5)
Q Why weighted average cost of capital of a levered firm is lesser than that of an Un-levered firm? Explain briefly? (3)
mcq =28
2 question =3 numbers
2 question = 5 number
Q suppose we have two stocks i.e. stock A and stock B.stock A has beta of 1.5 and stock B has a beta of 0.75.The expected rate of return on average stock is 13% and the risk free rate of return is 7%.By how much does the required rate on the riskier stock exceeds the required return on the less risky stock. (5)
Q Why weighted average cost of capital of a levered firm is lesser than that of an Un-levered firm? Explain briefly? (3)
