BLUECREST LIBERIA
SCHOOL OF GRADUATE STUDIES
SESSION - FALL 2024
Name of the Subject: Management
Name of the Program: BBA
Accounting
Subject Code: BBA 224 Semester: IV
Date of the Exam: October 24th, 2024 Exam-type: Mid-term (Regular)
Student Name: Student Signature:
Duration of the Exam: 1 Hour 30 Minutes Total Marks: 25
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STANDING INSTRUCTIONS
Students writing exams shall be seated in the specified exam hall at least 15 minutes prior to the commencement
of the examination
Question paper number / Subject name / Subject code / Specified Semester / Student Roll number etc. shall be
specifically written by students in the answer booklet as per the space provided or as per the answer sheet
requirements
There will be different sections in a question paper and students have to carefully read and write the answers
accordingly
If any Clarifications are there for a student, it shall be communicated only with the invigilator in the hall and with
no one else
No mobile phone, radio programmable calculator or any other communication equipment or media are to be
taken into the examination room. Failure or comply may lead to confiscation of the gadget.
Students shall write their respective answers as advised under each sub section of the Question paper
There will be no discussions or talks by any student during the course of examination and if the found is doing,
the same will be confirmed as malpractice and necessary formal actions will be initiated against the student
Calculators or other Mathematical / Statistical tables as appropriate will be allowed for necessary / specified
exams – Students will be communicated regarding this by the concerned official before the exam
There will be no writings or scribblings by a student on any Question paper. Invigilator has complete formal
authority to take any action against student, if found
Decision by the invigilator and the Controller of Examinations will be final and formal, for all aspects concerning
examinations
There shall be no communication whatever between candidates during the examination. A candidate may attract
the attention of the invigilator by raising a hand.
A breach of any of the foregoing regulation made for the conduct of university examinations may attract one or
more of the following sanctions:
- A reprimand
- Loss of marks
- Cancellation
- Withholding of results for a period
In addition to Grade Z shall be awarded whenever it is established that a candidate to gain an unfair advantage
in an examination. Further sanction may include:
- Being barred from university examinations
- Suspension from university
- Expulsion from university
Section A [Multiple Choice]
Answer all questions from section A. Each question carries 1-mark. 10x1 = 10 Marks
1. A master budget consists of
a) Individual budgets made for short-term goals
b) Emphasis is put on cash resources for capital planning
c) Interrelated budgets for an action plan for a specific time period
d) Focuses on review of progress towards long-term goals
2. L Company produces hand tools. For March, budgeted sales are 12,000 units,
beginning finished goods inventory will be 1,200 units, and ending finished goods
inventory will be 1,400 units. March production will be?
a) 10,900
b) 11,800
c) 12,200
d) 14,600
3. J Company produces hand tools. Budgeted sales will be March 12,000 units, April
14,000, May 16,000 and June 19,000. Ending finished goods inventory policy is 10%
of the following month's sales. March 1 inventory is projected to be 1,500 units.
How many units will be produced in March?
a) 11,900
b) 12,200
c) 13,000
d) 14,800
4. A Company produces leather handbags. The production budget for the next four
months is: July 6,000 units, August 8,000, September 7,500, October 8,000. Each
Handbags require 0.5 square meters of leather. A Company’s leather inventory policy
is 30% of next month's production needs. On July 1 leather inventory was expected
to be 2,000 square meters. Leather is expected to cost $6.00 per square meter in
July. What is the expected cost of leather purchases in July?
a) $13,100
b) $13,200
c) $16,200
d) $16,300
5. Y Company produces chairs. The production budget for the next four months is: July
6,000 units, August 7,000, September 7,500. Each chair requires 2.2 hours of skilled
labor (paid $15 per hour). How much will be paid to skilled labor during Quarter 3
(July-September)?
a) $292,500
b) $676,500
c) $677,500
d) $742,500
6. Two basic measures of liquidity are.
A) Current ratio and Quick ratio.
B) Gross Profit ratio and Operating ratio.
C) Current ratio and Average collection period.
D) Inventory turnover and Current ratio.
7. Debt to equity ratio establishes the relationship between.
A) Long-term debt (external equities) and current assets (internal equities).
B) Long-term debt (external equities) and equity (internal equities), and long-term debt
(external equities) and current assets (internal equities).
c) Long-term debt (external equities) and equity (internal equities).
D) None of the options are correct.
8. In managing cash and marketable securities, what should the manager's primary concern?
A) maximization of profit
B) maximization of liquid assets
C) acceptable return on investment
D) liquidity and safety
9. One of the first considerations in cash management is
A) to have as much cash as possible on hand.
B) synchronization of cash inflows and cash outflows.
C) profitability.
D) to put any excess cash into accounts receivable.
10. Which of the following would NOT improve the current ratio?
A) Borrow short term to finance additional fixed assets.
B) Issue long-term debt to buy inventory.
C) Sell common stock to reduce current liabilities.
D) Sell fixed assets to reduce accounts payable.
Section B [Fill in the blanks]
Answer all questions from section B. Each question carries 1-mark. 5x1 = 10 Marks
1. Palo Alto Industries has a debt-to-equity ratio of 1.6 compared with the industry average of
1.4. This means that the company has a greater than average _______________ risk when
compared to other firms in its industry.
At December 31 XYZ company’s records show the following information:
2. The company's working capital is ________.
3. The company's current ratio is _________.
4. The company's quick ratio is __________.
5. For its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods
Sold of $525,000. At the beginning of the year its Accounts Receivable were $80,000 and its
Inventory was $100,000. At the end of the year its Accounts Receivable were $86,000 and its
Inventory was $110,000.
The inventory turnover ratio for the year was __________.
Section C [Long Answers]
Answer any 2 questions from section C. Each question carries 5-marks. 2x5 = 10 Marks
1. Peak sales for J & J Products, a wholesale distributor of leaf rakes, occur in August. Sales
the
company’s planning budget for the third quarter are shown below:
July August September Total
Budgeted Sales on account $600,000 $900,000 $500,000 $2,000,000
From past experience, the company has learned that 20% of a month’s sales are collected in
the month of sale, another 70% are collected in the month following sale and the remaining
10% is collected in the second month following sale. Bad debts are negligible and can be
ignored. May sales totaled $430,000 and June sales totaled $540,000.
Required:
a) Prepare a schedule of expected cash collections from sales, by month
and in total, for the third quarter.
b) Compute the accounts receivable as September 30.
2. Micro Corporation has budgeted sales of its microchips for the next four month as follows:
Units Sold
April 20,000
May 25,000
June 35,000
July 40,000
The company is preparing a production budget for the third quarter. Ending inventory level
must equal 20% of the next month’s sales.
Required:
a) Calculate the ending inventory as of March 31.
b) Prepare a production budget for the third quarter by month and in total.
Use the information below to answer questions 3-5:
A company’s net income after tax was $400,000 for its most recent year. The company’s
income statement included Income Tax Expense of $140,000 and Interest Expense of $60,000.
At the beginning of the year the company’s stockholders’ equity was $1,900,000 and at the
end of the year it was $2,100,000.
Required
3. Compute time-interest-earned for the company.
4. Compute debt-to-equity ratio.
5. Compute Return on Stockholder’s equity.
