issions Skills Assessment 3b6y5g

Professional issions Skills Assessment : College and Professional Program issions : Undergraduate Programs : The Eller College of Managem...

Professional issions Skills Assessment Sample Questions The following nine problems will help as you prepare for the Professional ission Skills Assessment. The Skills Assessment will consist of approximately 50% Financial ing questions and 50% Business Math questions. Questions 1-5 below test your Financial ing skills and refer to the balance sheet below. Answers and explanations are provided for questions 1-5. Questions 6-9 test your Business Math skills. Please review your Business Math notes and text book to discover solutions and explanations to questions 6-9. Bob Jones started a business, Sweeties, 2 years ago running an ice cream truck for June through August on Cape Cod, Massachusetts. At the end of each year the only assets left are cash, the truck and the balance in the equity s. On January 1, 2003, the beginning balances are: Debit Cash Truck Accumulated Depreciation Common Stock Retained Earnings (beginning)

Credit

3,500 30,000 -

12,000 20,000

-

1,500

During 2003, Sweeties had cash sales of $33,000. The cash cost of goods sold was $12,000. Other operating expenses paid in cash totaled $14,000. The depreciation on the truck is $6,000 per year. Dividends paid in cash to the stockholder were $2,000. 1. What is the ending cash balance at 12/31/03? a. $8,500 b. $2,500 c. $5,000 d. can not be determined from information provided 2. What is the amount of net income for the year ended 12/31/03? a. $7,000 b. $5,000 c. $1,000 d. Net Loss of $1,000 3. What is the ending retained earnings balance at 12/31/03 (the amount found on the balance sheet)? a. $6,600 b. $6,000 c. ($1,000) d. $500 4. What is the ending stockholder's equity found on the balance sheet at 12/31/03? a. $26,500 b. $26,000 c. $18,500) d. $20,500 5. What is the book value of the truck on the balance sheet at 12/31/03? a. $30,000 b. $18,000 c. $12,000 d. can not determine from information provided

Professional issions Skills Assessment : College and Professional Program issions : Undergraduate Programs : The Eller College of Managem...

6. What is the future value of $250,000 invested at a continuously compounded annual rate of 5%, after 3 years? Round your answer to whole dollars? a. $273,182 b. $250,000 c. $228,786 d. None of the above 7. A total of $12,000 is invested in two funds paying 9% and 11% simple interest. If the interest for the first year is $1,180, how much of the $12,000 is invested at 9%? a. $1,180 b. $5,000 c. $7,000 d. $10,820 8. Which investment has the lowest effective annual yield? a. 8% Compounded daily b. 8% Compounded continuously c. 8% Compounded quarterly d. 4% Compounded continuously 9. If X= YZ + C(9 – A) and X= 10, C= 3, Y= .5, and A= 3 then what is the value of Z? a. 8 b. -8 c. 16 d. -16

Answers EXPLANATION TO QUESTION #1 Cash Balance: Beginning Cash 3,500 Cash Sales + 33,000 Cash Expenses - (12,000) (14,000) Cash Dividends - ( 2,000) Ending Cash Balance 8,500 EXPLANATION TO QUESTION #2 Net income Calculation:Revenues 33,000 Cost of Goods sold 14,000 Operating expenses 12,000 Depreciation expense 6,000 Net income 1,000 EXPLANATION TO QUESTION #3 Retained Earnings:Beginning Retained Earnings 1,500 + Net Income 1,000 - Dividends (2,000) Ending Retained Earnings 500 EXPLANATION TO QUESTION #4 Stockholder's Equity Ending Retained Earnings 500 Common Stock 20,000 20,500 EXPLANATION TO QUESTION #5 Book Value of truck at end of year:Cost 30,000 Accumulated Depreciation 18,000 Book value 12,000 Beginning A/D 12,000 +current accum depr. 6,000 ending A/D 18,000