Question

QUESTION 32

1. Cash increase due to the proceeds from the bond issuance would be found in which section of the statement of cash flows?

   		The accrual activities section
   		The operating activities section
   		The investing activities section
   		The financing activities section

QUESTION 33

1. Which of the following would most likely be classified as a profit center?

   		The automotive division of a large, decentralized corporation
   		The Mt Pleasant branch of the Kohl's department store chain
   		The Parks and Resorts business segment of the Walt Disney Company
   		The accounting department of manufacturing company

QUESTION 35

1. In which section of the balanced scorecard would you track the number of returned products?

   		The financial perspective
   		The internal business process perspective
   		The customer perspective
   		The learning and growth perspective

QUESTION 39

1. The Rubber Division of Morgan Company manufactures rubber moldings and sells them externally for $50. At the current level of production, its  variable cost is $20 per unit, and its fixed cost per unit is $7. Morgan's president wants the Rubber Division to transfer 5,000 units to another company division. Assuming the Rubber Division has available capacity for 5,000 additional units, the economic rule would set transfer price as:

   		$27.
   		$50.
   		$7.
   		$20.

Answer 1

Answer 32

The proceeds from Issue of the bonds is Financing Activity, as it is raised as Long Term Debts. It is classified under “The financing activities section”.

Option The financing activities section is the correct option and others are incorrect.

Answer 33

A profit center is a separate branch or a division where the branch or division is treated as a separate or standalone business, which generates revenues and is responsible to generate that profits / Earnings.

In this case, Option “The Parks and Resorts business segment of the Walt Disney Company” is the profit center and the correct option as it is a separate business segment that is responsible to generate earnings.

The other options are incorrect as they are not responsible for generating profits.

Answer 35

The number of returned products can be tracked in the balance scorecard in “The customer perpective”, as the focus of the customer perspective is the customer satisfaction.

Option The customer perspective is the correct option and other options are incorrect as number of returned products are only shown in “The customer perpective”.

Answer 39

The transfer Price will be the Variable cost of Rubber molding as the Rubber Division has spare capacity of 5,000 additional units.

The transfer Price will be set at $20 per unit.

Option $20 is the correct option.

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