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Final Examination Booklet

Math for Business

and Finance

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Math for Business and Finance

EXAMINATION NUMBER:

06044

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00

Complete the following exam by answering the questions and

compiling your answers into a word-processing document. When

you’re ready to submit your answers, refer to the instructions at

the end of your exam booklet. Be certain to indicate the proper

question number before each of your answers. Remember to

show your work if an answer requires a mathematical solution.

Answer each of the following questions. Each answer is worth 4

points.

1. On November 1, 2009, Broom Company received a bank state-

ment that showed a $2,950 balance. Broom showed a $4,010

checking account balance. The bank didn’t return check No.

124 for $1,080 and check No. 138 for $720. A $3,200 deposit

made on October 30 was in transit. The bank charged Broom

$12 for check printing and $18 for an NSF check. Broom forgot

to record a $30 withdrawal at the ATM. The bank also collected

a $400 note for Broom. Prepare a bank reconciliation.

2. Erasers cost $5 per carton and pencils cost $7 per carton.

If an order comes in for a total of 15 cartons for $85, how

many cartons of each were bought?

3. The price of a hamburger increased from $1.10 to $1.59.

What percent did the price increase?

4. Morgan Company received from Lee Company an invoice

dated September 27. Terms were 2/10 EOM. List price on

the invoice was $5,000 (freight not included). Morgan

receives a 9/7 chain discount. Freight charges are Morgan’s

responsibility but Lee agreed to prepay the $150 freight

charge. Morgan pays the invoice November 9. What does

Morgan pay Lee?

Math for Business and Finance

5. Sullivan’s Handbags marks up their bags at 45% of the

selling price. Pat Sullivan saw a bag at a trade show that

she would sell to her customers for $85. What is the most

she could pay for the bag and still retain the 45% markup

of the selling price?

6. Jeff Jones earns $1,200 per week. He is married and claims

four withholding allowances. The FICA rate is as follows:

Social Security rate is 6.2% on $97,500; Medicare rate is

1.45%. To date his cumulative wages are $6,000. Each

paycheck, his employer also deducts $42.50 for health

insurance. What is his net pay? (Calculate FIT by the

percentage method.)

7. Lisa Kane borrowed $8,000 on an 8%, 60-day note. After

15 days, Lisa paid $2,000 on the note. On day 45, Lisa paid

$1,000 on the note. What is the total interest and ending

balance due by the U.S. rule? Use ordinary interest.

8. On May 12, Bob Campbell accepted a $5,000 note in granting

a time extension of a bill of goods bought by Rick Ween.

Terms of the note were 8% for 120 days. On July 8, Bob

needed to raise cash and discounted the note at Rick’s bank

at a discount rate of 9%. Calculate Bob’s proceeds.

9. Jacob Fonda deposited $25,000 in a savings account at 10%

interest compounded semiannually. At the beginning of

Year 4, Jacob deposits an additional $40,000 at 10% interest

compounded semiannually. At the end of six years, what is

the balance in Jacob’s account?

10. Roger Fox made deposits of $900 semiannually to Reel Bank,

which pays 6% interest compounded semiannually. After

seven years, Roger made no more deposits. What would be

the balance in the account eight years later from the last

deposit?

11. Dick Hercher borrowed $7,000 to travel to London. His loan

is to be paid in 48 monthly installments of $190. At the end

of 14 months, Dick decides to pay off his loan. What is the

final payoff Dick will make?

2

Examination 3

12. A condo is advertised in The Wall Street Journal for

$350,000. It states in the ad that a 20% down payment

is required. The rate of interest is 11% on a 25-year

mortgage. What would be (A) the monthly payment along

with (B) the total cost of interest?

13. Use this information to calculate the following:

A. Net sales

B. Gross profit

C. Total operating expenses

D. Net Income

14. A truck costing $25,000 with a residual value of $5,000 was

purchased by Rim Corporation. The truck’s estimated life

is 10 years. At the end of Year 2, what is the book value

using declining-balance method? Assume a depreciation

rate of twice the straight-line method.

15. A toy store has a beginning inventory of eight sets of paints

at a cost of $1.25 each. During the year, the toy store

purchased three at $1.50, five at $2, six at $2.50, and ten

at $3. By the end of the year, 21 sets were sold. Calculate

the following:

A. The number of paint sets in stock

B. The cost of ending inventory under LIFO

C. The cost of ending inventory under FIFO

D. The cost of ending inventory under Weighted Average

Sales returns $ 700

Rent expense 1,288

Sales discounts 950

Depreciation expense 600

Cost of merchandise sold 7,600

Gross sales 20,900

Advertising expense 1,650

Salary expense 2,900

Heat expense 900

Math for Business and Finance4

16. Pete’s Warehouse has a market value of $5,000,000. The

property in Pete’s area is assessed at 40% of the market

value. The tax rate is $105.10 per $1,000 of assessed value.

What is Pete’s property tax?

17. Jim Smith, who lives in Territory 5, carries 10/20/5

compulsory liability insurance along with optional collision

that has a $200 deductible. Jim was at fault in an accident

that caused $1,800 damage to the other auto and $600

damage to his own. Also, the courts awarded $13,000 and

$8,000 respectively, to the two passengers in the other

car for personal injuries. How much does the insurance

company pay, and what is Jim’s share of responsibility?

18. Jeff Sellers bought 200 shares of Radio Shack stock at

$22.35. Eight months later, he sold the stock at $31.76.

Assuming a 2% commission charge, what is the bottom

line for Jeff?

19. Sales at Sullivan Realty totaled 10 homes for the month.

They were as follows:

$182,900

$189,000

$160,000

$210,000

$175,000

$158,000

$ 99,000

$126,000

$185,000

$109,000

Calculate the mean and median.

20. The property of Al’s garage is worth $300,000. Al has a

fire insurance policy of $180,000 that contains an 80%

coinsurance clause. What will the insurance company pay

on a fire that causes $210,000 damage? If Al met the

coinsurance requirement, how much would the insurance

company have to pay?

Examination 5

21. Earl Miller plans to buy a boat for $19,500 with an interest

charge of $2,500. Earl figures he can afford a monthly

payment of $650. If Earl has to pay 36 equal monthly

payments, by how much can he afford the boat per month?

22. Peter Mabel sold a total of 400 Oatmeal ($1.50) and Wheat

($2) breads during the Labor Day weekend. How many of

each did Pete sell if total sales were $700?

23. Mel’s Furniture received an invoice dated September 27

for five bedroom sets at $3,000 each. The invoice indicated

a trade discount of 5/8/3. The seller of the furniture

prepaid the freight of $200. Terms were 2/10 EOM.

Assuming Mel pays on November 2, what amount would

be paid? (Be sure to include the freight cost.)

24. Mobilee Oil Company accepted a $10,000, 120-day note,

dated March 3, at 8.5% to settle a past due accounts

receivable. Mobilee Oil discounted the note to raise cash

on May 10 at a discounted rate of 9%. What proceeds did

Mobilee Oil receive?

25. Ray Long wants to retire in Arizona when he is 70 years

of age. Ray is now 50. He believes he will need $130,000

to retire comfortably. To date, Ray has set aside no

retirement money. Assume Ray gets 14% interest

compounded semiannually. How much must Ray invest

today to meet his $130,000 goal?

Math for Business and Finance6

SUBMITTING YOUR ASSIGNMENT

You can submit your final exam online:

1. On your computer, save a revised and corrected version

of your project. Be sure to include your student number

and exam number on your saved documents.

2. Go to http:www.takeexamsonline.com and log in.

3. Go to My Courses.

4. Click on Take Exam next to the lesson you’re working on.

5. Enter your e-mail address in the box provided. (Note:

This information is required for online submission.)

6. Attach your file or files as follows:

a. Click on the Browse box.

b. Locate the file you wish to attach.

c. Double-click on the file.

d. Click on Upload File.

e. If you have more than one file to attach, repeat

steps a–d.

7. Click on Submit Files.

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