1 An employee who exceeds his authority under his employment agreement may still bind his principle if the employee has the apparent authority to do so to the third party. True False 2 To avoid liability for patent infringement, a software developer who uses another’s software in creating new software need not obtain a license to do so. True False 3 To be legally enforceable a contract is formed by two or more parties who promise to perform or to refrain from performing some act now or in the future and is enforceable in a court of law. True False 4 A unilateral contract is formed when the one receiving the offer responds in the same manner as the offer to accept. True False 5 Under the doctrine of unjust enrichment, people can normally be forced to pay for benefits that are thrust upon them, but never used. True False 6 A sole proprietor may incorporate their business. True False 7 Any promise made with respect to a past event is enforceable because the event is certain and it has already occurred. True False 8 In general a court of law will not question the adequacy of consideration if the consideration is legally sufficient. True False 9 All contracts must be in writing. True False 10 A general contractor who knows that a subcontractor’s bid is a mistake can still enforce the bid. True False 11 An advertisement is a binding offer that may be accepted by a customer of a vendor. True False 12 If the subject matter of a contract turns out to be more valuable that one of the parties believed to would be, the party can rescind the contract. True False 13 If two parties decide to operate a business as a partnership, they must always share the profits and losses equally. True False 14 A corporate officer who has a financial interest in a competing company has not breached their fiduciary duties to their corporation. True False 15 The parol evidence rule permits the introduction at trial of evidence of the parties’ prior negotiation even if they differ from the terms of the party’s written agreement. True False 16 When the terms of a written agreement are clear, and there is fraud or deceit, the parol evidence rule bars oral evidence that contradicts those terms. True False 17 An assignee of a right to receive money acquires any rights to the money held by the assignor. True False 18 Banks may assign their loan contracts to other firms. True False 19 The rights under a contract for personal services, if the services are unique, normally can be assigned. True False 20 With some exceptions, a party may delegate freely his or her duties under a contract. True False 21 A condition that must occur before a party’s performance can be required is called a condition precedent. True False 22 In the event of a material breach of contract, the non-breaching party is excused from further per True False formance of his or her contractual duties and has a cause of action to sue 23 An agreement to agree on a contract is not binding. True False Puffery, or sales talk, is fraud. True False 25 A bilateral contract is the same as a quasi-contract. True False 26 A unilateral contract means that the offeree need not do anything in order to be bound by an offer. True False 27 An assault may be committed when a person acts in a way so as to create an apprehension of receiving offensive conduct. True False 28 The statute of frauds requires an agreement to be in writing when it involves a lease for property for a six month period. True False 29 Partners in a limited partnership have the same potential liability as partners in a general partnership. True False 30 Shareholders are charged with running the day to day business of a corporation. True False 31 In Florida a minor who obtains medical treatment is not legally obligated to pay for the said lodging. True False 32 If you are taking a business law course and want to copy material from your text book to sell to your classmate who lost their book right before the final exam, you do not need not obtain the author’s permission first. True False 33 When a party delegates their duties to a third party, they are thereafter released from liability. True False 34 Trade secrets include anything that makes an individual company unique and would have value to the competitor. True False 35 In a quasi contract it is not always necessary to specify the price or time of delivery if there are other means to determine the price and time of delivery. True False 36 The use of force or intimidation is necessary for an act of theft to be considered a theft. True False 37 The unauthorized use of computer data or services is robbery. True False 38 A person who accesses a computer online, without the permission of the owner to obtain protected data is subject to criminal prosecution. True False Question 1 Li Corp. had a very successful year in 2013, selling 4,500 units of its product. The product sells for $30.00 each. Units Cost per Unit inventory Per total cost unit Beginning Inventory 1,800 $19 34200 19 Purchases by quarter: Q1 1,000 $18 18000 18.64 Q2 1,500 $16 24000 17.72 Q3 750 $14 10500 17.17 Q4 1,000 $12 12000 16.314 Required: a) Calculate the cost of goods sold and ending inventory for 2013 using the following inventory costing methods: i) Weighted-average ii) First in first out Show all calculations. b) Which method results in higher net income for Li in 2013? Question 2 (12 marks) Fred’s Manufacturing purchased equipment in 2013 and incurred the following costs relating to the equipment during 2013: a) List price of equipment was $10,000 but Fred received a $500 discount b) Shipping costs of $250 to ship the equipment to Fred’s plant c) Taxes that are fully recoverable from the government of $1,200 d) An engineer’s costs to install the equipment of $700 e) Regular monthly maintenance and cleaning of the equipment of $80 Required: Calculate the capitalized cost of the equipment that would be included on the balance sheet of Fred Manufacturing. Show all calculations. Question 3 (15 marks) On March 1, 2013, ABC Co. sold a truck in his fleet for $2,500 cash. The truck has an original cost of $20,000 and accumulated depreciation of $15,000 at December 31, 2012. ABC completes adjusting entries annually. Annual depreciation for the truck is $3,600. Required: Record the journal entries required on March 1 for the disposal of the truck. Question 4 (30 marks) Smith Co. purchased a piece of equipment on January 1, 2013 with a cost of $40,000. The equipment will last four years with a residual value of $3,000. The equipment is expected to produce the following number of units for the company: 2013 500 units 2014 800 units 2015 900 units 2016 700 units Required: Calculation the depreciation expense for 2013, 2014, 2015, and 2016 for each of the following depreciation methods (show all calculations): a) Straight-line 2013: b) Units of production (units/total unit)*(cost-salvage): c) Double-diminishing balance Question 5 (13 marks) On January 1, 2013 XYZ Co. has machinery with a cost of $12,000 and accumulated depreciation of $7,000. On January 1, 2013 XYZ completes a major overhaul of the machinery for $5,500 which increases the life of the machine and its efficiency. The machine will now last 8 more years and then have a residual value of $500. The company uses the straight-line method of depreciating the machine. Required: Calculate the 2013 depreciation expense for the machine. Show all calculations. 1. 2. Use one of the sources available in the Almanacs and Yearbooks section to identify the approximate time of sunrise in Anchorage, Alaska, on December 25, 2015. (nt: Check the source’s Astronomy section.) A. 9:45 am B. 10:15 am C. 11:30 am D. 8:10 am 3. Access the Library of Congress library catalog at http://catalog.loc.gov and read the Basic Search Tips. Then, find the information to answer the question. Under the subject headings for Harry Potter and the Goblet of Fire, which is not listed as a subject? A. Wizards B. Magic C. Schools D. Dark Arts 1. Scholarly journal articles are written by A. professional writers. B. reporters. C. lower division college students. D. experts in a subject field. 2. In the keyword search on EDSeek’s Home Page, enter the following statement: NASA* AND Mars*. Based on the results from this search, choose the best answer to this question. Which of the following is listed under the related subjects list? A. Space exploration B. Milky Way C. Solar system D. Hubble telescope 3. Under the thesaurus on the Penn Foster Library, what is a synonym for the word impending? A. Later B. Never C. Distant D. Ominous
