Illinois MBA 501 First Hourly Examination 代写

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  • Illinois MBA 501 First Hourly Examination 代写

    I hereby affirm that I have neither received help from, nor given help to, any other
    person during this examination. Should I be found guilty of violating the Academic
    Honesty Policy of this university, I understand that I may (a) receive a failing grade on
    this examination; (b) receive a failing grade in this course; or (c) be expelled from the
    university.
    YOUR SIGNATURE ___________________________________
    Illinois Institute of Technology
    MBA 501
    First Hourly Examination
    John R. Twombly
    Wednesday, February 15, 2017
    Time Allowed: 2 Hours, 30 Minutes
    (6:00 PM - 8:30 PM)
    This examination is open-book, open-notes. Place your solutions to all questions on
    the blank pages provided on the examination, as I will not consider anything written
    on other paper. Make sure that your solutions are neat and well-organized! You
    may not receive any assistance from any other person. I will answer no questions
    during the examination period. If something seems unclear, make an assumption,
    write it out, and proceed to answer the question based upon your assumption.
    YOUR NAME _________________________________
    (Print)
    Stuart School of Business
    Page 1
    Sam Carrothers and his brother, Arthur, were avid outdoors men and were also quite entrepreneurial.
    Thus, they agreed to go into business together selling fishing and recreational boats on a small lake near
    Glacier Park in Montana. Since the nearest competition was across the border in Lethbridge, Alberta,
    Canada, they were confident that their business, Glacier Lakes Boating Company (GLBC), would be
    successful.
    The soon located a site for their business -- a parcel of waterfront land containing a dock and an old,
    dilapidated building. At this point, they decided to form a corporation and hired an attorney to draft the
    articles of incorporation for GLBC. The brother’s split the attorney’s $1,800 bill evenly.
    On June 1, 2016, Sam purchased 1,800 shares for $72,000 and Arthur paid $24,000 for 600 shares.
    Because they each took credit for their half of the attorney’s invoice, GLBC only received $94,200. The
    brothers agreed that any future purchase, or sale, of shares would be done at the book value at the time
    of the purchase, or sale. They also agreed that they would earn a salary of $2,500 per month (paid
    monthly) for each month that they were fully engaged in conducting GLBC’s business. They knew that
    this was a lot less than they could earn in their former jobs, but were happy to pay the price as they
    started their own business.
    On July 1, 2016, Sam purchased the site that they had previously identified with the help of a $20,000
    bank loan and $40,000 of the company’s money. That same day, Sam resigned from his full-time job so
    that he could devote his full attention to GLBC (and earn his $2,500 monthly salary).
    The first thing that Sam did was arrange to have the old, dilapidated building torn down as there was no
    value to it. ABC Wrecking Company tore down the building in July for $17,000 and agreed to defer
    payment until April 30, 2017.
    Meanwhile, Sam contacted RFB, Inc., a large manufacturer of recreational and fishing boats. In exchange
    for GLBC’s promise to sell only its boats, RFB agreed to provide all of the financing for GLBC’s new
    building on the site. The loan carried an annual interest rate of 12% (simple interest) with the first
    installment due on July 31, 2017. Interest was charged from the date of each advance by RFB.
    On August 1, 2016, RFB provided GLBC with a $40,000 check to get construction of the new building
    started. The balance of the loan would be provided upon completion of the building.
    Construction of the building began immediately under the supervision of a consulting architect, and the
    contractor promised completion by December 31, 2016 at a price of $140,000. As construction
    progressed, GLBC made payments to the contractor of $40,000 on August 1, $60,000 on October 31, and
    $40,000 at completion on December 31, 2016. RFB provided the financing for the October 31 and
    December 31 payments, as well as the initial $40,000 loan on August 1.
    During the construction period, Sam tried to obtain some orders for boats which would be delivered to
    the customers directly from RFB’s warehouse in Spokane, Washington. Between October 1 and
    December 31, 2016, Sam sold seventeen boats at an average cost to GLBC of $9,000 per boat. All of this
    was paid to RFB by December 31, 2016.
    These seventeen sales resulted in $187,000 of revenue, of which $18,000 was still outstanding as of
    December 31, 2016. Previously, the brothers agreed that Sam would receive a $40 commission per boat
    for his efforts in selling the boats, and GLBC paid Sam his commissions in December.
    Glacier Lakes Boating Company, Inc.
    MBA 501 First Exam, February 15, 2017.
    Page 2
    The building was completed at the end of December. There were extra costs of $3,000 (for changes that
    GLBC had authorized) and the consulting architect’s $5,000 bill arrived. These amounts were due in thirty
    days. The $20,000 bank loan, plus interest of $1,800 was repaid on December 31.
    Where appropriate, fixed assets, if any, should be depreciated over a twenty-five year period (using the
    double-declining balance method to zero salvage value) and intangible assets, if any, should be amortized
    over a five-year period (straight-line to zero residual value).
    Arthur quit his job on December 31 and joined GLBC on a full-time basis. At this time Arthur requested a
    set of financial statements so that the brother’s could see where they stood at the end of December .
    Required:
    a. Using either T-accounts or a hand-drawn spreadsheet, prepare a transactions analysis for GLBC
    from its date of incorporation until December 31, 2016.
    b. Prepare a balance sheet, income statement and statement of cash flows (direct method) for the
    period ending December 31, 2016.
    c. Prepare a reconciliation of the cash provided by operations from the statement of cash flows to
    GLBC’s net income for the period.
    d. Based on your financial statements, what is the value of each brother’s equity in GLBC as of
    December 31, 2016?
    Glacier Lakes Boating Company, Inc.
    MBA 501 First Exam, February 15, 2017.
    Page 3
    Glacier Lakes Boating Company, Inc.
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    MBA 501 First Exam, February 15, 2017.
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    Illinois MBA 501 First Hourly Examination 代写