Deck 9: Long-Lived Tangible and Intangible Assets

Question 1

Which of the following method of ordering is normally used to present current liabilities on the statement of ?nancial position?

A) In order of their magnitude
B) In order of their liquidity (due date)
C) In alphabetical order
D) In order of reverse liquidity

Answer 1

In order of their liquidity (due date)

Question 2

The following information is available for Lowell Company: $$\begin{array} { | l | r | } \hline \text { Current Assets } & \\\hline \text { Cash } & \$ 4,000 \\\hline \text { Marketable securities } & 75,000 \\\hline \text { Accounts receivable } & 61,000 \\\hline \text { Inventories } & 110,000 \\\hline \text { Prepaid expenses } & \underline { 30,000 } \\\hline \text { Total current assets } & \$ 280,000 \\\hline\end{array}$$ Total current liabilities are $80,000. The quick ratio for Lowell is

A) 1.75
B) 2.13
C) 3.25
D) 1.3

Answer 2

1.75

Question 3

Which of the following most likely would be classi?ed as a current liability?

A) Dividends payable
B) Bonds payable
C) Three-year notes payable
D) Mortgage payable

Answer 3

Dividends payable

Question 4

GST (goods and services tax) collected by a retailer is recorded by

A) crediting GST Revenue.
B) debiting GST Expense.
C) crediting GST Payable.
D) debiting GST Payable.

Question 5

Which of the following most likely would be classi?ed as a current liability?

A) Bonds payable
B) Three-year notes payable
C) Mortgage payable
D) Dividends payable

Question 6

Gothic Architects Inc. received its annual property tax bill for $7,800 in January. It is due on February 28th. What is the journal entry that should be made in January?

A) Please see the following information: $$\begin{array} { | l | r | r | } \hline \text { Property Tax Expense } & 650 & \\\hline \text { Prepaid Property Tax } & 7,150 & \\\hline \text { Property Tax Payable } & & 7,800 \\\hline\end{array}$$
B) Please see the following information: $$\begin{array} { | c | r | r | } \hline \text { Property Tax Expense } & 7,800 & \\\hline \text { Property Tax Payable } & & 7,800 \\\hline\end{array}$$
C) Please see the following information: $$\begin{array} { | l | r | r | } \hline \text { Prepaid Property Tax } & 7,800 & \\\hline \text { Property Tax Payable } & & 7,800 \\\hline\end{array}$$
D) Please see the following information: $$\begin{array} { | l | r | r | } \hline \text { Property Tax Expense } & 650 & \\\hline \text { Property Tax Payable } & & 650 \\\hline\end{array}$$

Question 7

Accounts payable are recorded on the books at their:

A) net realizable value
B) gross amount
C) net present value
D) net amount

Question 8

A company receives $111, of which $11 is for PST (provincial sales tax). The journal entry to record the sale would include a

A) debit to PST Expense for $11.
B) credit to PST Payable for $11.
C) debit to Sales for $111.
D) debit to Cash for $90.

Question 9

The relationship between current assets and current liabilities is

A) useful in evaluating a company's liquidity.
B) called the matching principle.
C) useful in determining the amount of a company's long-term debt.
D) useful in determining pro?t.

Question 10

Liquidity ratios measure a company's

A) operating cycle.
B) revenue-producing ability.
C) short-term debt paying ability.
D) long-range solvency.

Question 11

A company's quick ratio:

A) can never be larger than its current ratio at the same date.
B) indicates the length of time the company takes to pay its short-term creditors.
C) indicates how quickly the company converts its current assets to cash.
D) is computed by dividing current assets by current liabilities, excluding accounts payable for inventory purchases.

Question 12

On January 1, 20X3, Osler Limited, a calendar-year company, issued $160,000 of notes payable, of which $40,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 20X3, is

A) Current Liabilities, $160,000.
B) Long-term Debt, $160,000.
C) Current Liabilities, $40,000; Long-term Debt, $120,000.
D) Current Liabilities, $120,000; Long-term Debt, $40,000.

Question 13

Haletone Corp provides the following information for 20X6 and 20X7 $$\begin{array} { | l | r | r | } \hline & \underline { \mathbf { 2 0 X6 } } & \underline { \mathbf { 2 0 X 7 } } \\\hline \text { Current assets } & \$ 23,000 & \$ 27,000 \\\hline \text { Accounts payable } & 9,000 & 10,000 \\\hline \text { Other current liabilities } & 5,000 & 4,000 \\\hline \text { Non-current liabilities } & 50,000 & 62,000 \\\hline \text { Sales } & 125,000 & 135,000 \\\hline \text { Cost of sales } & 75,000 & 79,600 \\\hline\end{array}$$ Haletone's days payable outstanding for 20X7 is closest to

A) 47.2 days
B) 43.6 days
C) 48 days
D) 46.2

Question 14

Most companies pay current liabilities

A) out of current assets.
B) by issuing interest-bearing notes payable.
C) by issuing shares.
D) by creating long-term liabilities.

Question 15

Which of the following is not a typical current liability?

A) Sales taxes payable
B) Bonds payable
C) Deferred revenue
D) Income tax payable

Question 16

Failure to record a liability will probably

A) have no effect on net earnings.
B) result in overstated total liabilities and shareholders' equity.
C) result in overstated total assets.
D) result in overstated net earnings.

Question 17

The following is a partial list of account balances from the books of Ellsworth Enterprise at the end of 20X1: $$\begin{array} { | l | r | } \hline \text { Trade Payables } & \$ 1,200 \\\hline \text { Trade Receivables } & 1,000 \\\hline \text { Accrued Vacation Liability } & 900 \\\hline \text { Cash } & 3,000 \\\hline \text { Deferred Revenue } & 500 \\\hline \text { Income Taxes Payable } & 2,200 \\\hline \text { Notes Payable (due in 2 years) } & 600 \\\hline\end{array}$$ Based solely upon these balances, what amount of current liabilities should appear on Ellsworth's 20X1 year-end statement of financial position?

A) $3,900
B) $4,300
C) $4,800
D) $5,400

Question 18

Purchase of inventory for cash will:

A) increase the current ratio.
B) decrease the current ratio.
C) increase the quick ratio.
D) decrease the quick ratio.

Question 19

A current liability is a debt that can reasonably be expected to be paid

A) within one year.
B) between 6 months and 18 months.
C) out of currently recognized revenues.
D) out of cash currently on hand.

Question 20

A customer paid a total of $84,000 for a purchase, including 5% PST (provincial sales tax). What was the PST amount?

A) $80,000
B) $84,000
C) $4,200
D) $4,000

Question 21

Emerald Jewelers is a retail store operating in Ontario, where the GST is 5% and the PST is 8%. For the month of June, Emerald sold $45,000 worth of jewelry to customers, 60% of which were cash sales and the balance paid by credit cards. Credit card fees are 2.5%. Based on this information, what is the total debit to Accounts Receivable for the month of June?

A) $50,850
B) $50,342
C) $44,550
D) $45,000

Question 22

Site Company had the following account balances related to payroll at the end of the period: $$\begin{array} { | l | r | } \hline \text { CPP payable - employees' share } & 7,000 \\\hline \text { Liability for income taxes withheld } & 20,000 \\\hline \text { Salary and wage expense } & 95,000 \\\hline\end{array}$$ Without considering any employer payroll taxes, Site would record Salaries Payable for the pay period amounting to which of the following?

A) $61,000
B) $68,000
C) $75,000
D) $95,000

Question 23

GST (goods and services tax) collected by a retailer are expenses

A) of the retailer.
B) of the customers.
C) of the government.
D) that are not recognized by the retailer until they are submitted to the government.

Question 24

Bison Corp. issues a 5 year 8%, $60,000 note payable on March 1. The terms of the note include monthly blended principal and interest payments of $1,217. The entry to record the second instalment payment will show a:

A) debit to Notes Payable of $822.
B) debit to Cash for $1,217.
C) debit to Interest Expense for $400.
D) credit to Interest Expense for $395.

Question 25

Deferred revenue is another term for which of the following?

A) Prepaid expenses
B) Sales revenue
C) Trade payables
D) Deferred revenue

Question 26

The federal government requires which of the following?

A) Only the employer to pay CPP contributions.
B) Only the employee to pay CPP contributions.
C) Neither the employer nor the employee to pay CPP contributions.
D) Both the employer and the employee to pay CPP contributions.

Question 27

The journal entry required on the company's books to record the note payable on July 1, 20X0 would include which of the following?

A) A credit to notes payable for $12,000.
B) A credit to notes payable for $12,960.
C) A debit to cash for $11,040.
D) A debit to interest expense for $960.

Question 28

An employee receives a bi-weekly gross salary of $2,000. Income tax is $218, CPP is $99, EI is $36, and union dues are $50. What is the amount of the employee's take home pay (net pay) on a bi- weekly basis?

A) $1,597
B) $1,732
C) $1,782
D) $2,000

Question 29

Agracon Foods distributes coupons to consumers which may be presented, on or before a stated expiry date, to grocery stores for discounts on certain Agracon products. The stores are reimbursed when they send the coupons to Agracon. In Agracon's experience, only about 50% of these coupons are redeemed. During 2011, Argracon issued two separate series of coupons as follows: $$\begin{array} { | l | r | l | r | } \hline&&& \text { Amounts Reimbursed as of }\\ \text { Issued On } & \text { Total Value } & \text { Coupon Expiry Date } &\operatorname{Dec} 3120X1\\\ \\ \hline \text { Jan 120X1 } & \$ 250,000 & \text { Jun 30 20X1 } & \$ 118,000 \\\hline \text { Oct 120X1 } & \$ 360,000 & \text { Mar 3120X2 } &\$150,000\\\hline\end{array}$$ Agracon's only journal entries for 20X1 recorded debits to coupon expense, and credits to cash of $268,000. Their December 31, 20X1 balance sheet should include a provision for unredeemed coupons of:

A) $180,000
B) $62,000
C) $30,000
D) $0

Question 30

On the company's 20X0 year-end statement of ?nancial position, the liability related to this note should be reported as which of the following?

A) A $12,480 long-term liability.
B) A $12,480 current liability.
C) A $12,000 long-term liability.
D) A $12,000 current liability.

Question 31

The interest charged on a $200,000 note payable, at the rate of 6%, on a 3-month note would be

A) $12,000
B) $3,000
C) $4,000
D) $1,000

Question 32

How should the amount of federal income tax that is withheld from employees' paychecks by the employer be recorded?

A) On the employer's books as a current liability.
B) On the employer's books as an asset.
C) On the employer's books as revenue.
D) It should not be recorded on the employer's books.

Question 33

The amount of sales tax collected by a retail store when making sales is

A) miscellaneous revenue for the store.
B) a current liability.
C) not recorded because it is a tax paid by the customer.
D) recorded as an operating expense.

Question 34

A Co, a biotechnology company, reported cost of sales of $345.2 million and trade payables of $121.6 million for 20X3. In 20X2, cost of sales was $300.8 million and trade payable was $103.9 million. What was A Co's trade payables turnover ratio in 20X3?

A) 2.84
B) 2.86
C) 2.90
D) 3.06

Question 35

The current portion of long-term debt should be

A) paid immediately.
B) classified as a current liability on the statement of financial position.
C) classified as a long-term liability on the statement of financial position.
D) removed from the long-term portion of debt with a journal entry.

Question 36

Carly Design Inc. received its annual property tax bill for $8,400 in January. It was paid when due on March 31. Carly Design's year end is Dec 31. The Dec 31 account balances should be

A) $2,100 for Prepaid Property Tax, $6,300 for Property Tax Expense
B) $2,100 for Prepaid Property Tax, $2,100 for Property Tax Payable
C) $0 for Prepaid Property Tax, $0 for Property Tax Payable
D) $700 for Prepaid Property Tax, $7,700 for Property Tax Expense

Question 37

In 20X3, Toys 4 U had a trade payables turnover ratio of 6.08; in 20X2, 5.87; and 5.45 in 20X1. Which statement is true about what the ratios indicate?

A) Toys 4 U is taking longer to pay its vendors in 20X3 versus 20X2.
B) Toys 4 U is taking less time to pay vendors in 20X3 than it took in both 20X2 and 20X1.
C) Toys 4 U has been increasing its average payables at a faster rate than its cost of goods sold has increased.
D) Toys 4 U is taking less time to collect from its customers.

Question 38

Interest rates on notes are usually stated as a(n)

A) monthly rate.
B) daily rate.
C) annual rate.
D) semi-annual rate.

Question 39

G Co and A Co are both in the biotechnology industry. In 20X3, G Co reported a trade payables turnover of 7.71 and A Co reported a ratio of 3.06. Which of the following is an incorrect reason for the difference in ratios?

A) A Co has a higher average trade payables in comparison to G co.
B) A Co has a lower average trade payables in comparison to G co.
C) A Co is taking longer to pay vendors.
D) G Co has a better payment record in terms of timely payment to vendors.

Question 40

In 20X3, P Co reported a trade payables turnover ratio of 2.49 and C Co reported a turnover ratio of 1.74 for that same year. Which of the following statements is true?

A) C Co pays their vendors in a timelier manner than P Co pays their vendors.
B) On a comparative basis to cost sales, P Co carries more in average payables than does C Co.
C) It is unclear if P Co pays their vendors in a timelier manner than C Co.
D) P Co took approximately 147 days while C Co took about 210 days to pay vendors.

Question 41

Under IFRS, a provision is

A) a liability of uncertain timing or amount.
B) a special fund set aside to pay long-term debt.
C) deferred revenue.
D) an allowance for future dividends to be paid.

Question 42

Which of the following is correct with respect to a contingent liability that is "reasonably possible" but "cannot reasonably be estimated"?

A) It must be recorded and reported as a liability.
B) It does not need to be recorded or reported as a liability.
C) It must only be disclosed as a note to the ?nancial statements.
D) It must be reported as a liability, but not recorded.

Question 43

Cress Company is involved in a lawsuit. Note disclosure of the contingent liability which could arise does NOT have to be presented if the probability of Cress owing money as a result of the lawsuit is which of the following?

A) Reasonably possible and the amount cannot be reasonably estimated.
B) Probable and the amount cannot be reasonably estimated.
C) Remote and the amount cannot be reasonably estimated.
D) Reasonably possible and the amount can be reasonably estimated.

Question 44

Freeman Inc. reported a profit of $40,000 for 20X0. The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 20X1. Assuming a 30% income tax rate, this situation would cause a 20X0 future tax amount of which of the following?

A) $3,000 (debit)
B) $3,000 (credit)
C) $900 (debit)
D) $900 (credit)

Question 45

Big Top Electronics Inc. offers a two-year warranty on its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 20X0 and 20X1 were: $2,500,000 and $2,800,000, respectively. They incurred no warranty costs in 20X0 but in 20X1 they spent $175,000 on repairs related to the warranties from 20X0 and 20X1.

-Big Top's warranty liability as at the end of the 20X1 year is

A) $380,000
B) $355,000
C) $75,000
D) $280,000

Question 46

A contingent liability is recorded in the accounting records

A) if a reasonable estimate of the expected loss can be determined and if it is probable.
B) if the contingency has not already been disclosed in the notes to the ?nancial statements.
C) if it will possibly become an actual liability, and the exact amount is unknown.
D) under no circumstances.

Question 47

Armadillo Appliances sells new and reconditioned kitchen and laundry appliances. Armadillo sold a reconditioned refrigerator for $1,100 on Oct 25, 20X4, with a one-year warranty covering parts and labour. Warranty expense is estimated at 5% of the selling price, and the appropriate adjusting entry is recorded at Dec 31, 20X4. On January 6, 20X5, the refrigerator is returned for warranty repairs. This cost Armadillo $25 in parts and $20 in labour. When recording the January 6, 20X5 transaction, Armadillo would debit warranty expense with

A) $45
B) $0
C) $55
D) $25

Question 48

Big Top Electronics Inc. offers a two-year warranty on its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 20X0 and 20X1 were: $2,500,000 and $2,800,000, respectively. They incurred no warranty costs in 20X0 but in 20X1 they spent $175,000 on repairs related to the warranties from 20X0 and 20X1.

-Big Top's warranty liability at the year-end 20X0 is

A) $0
B) $150,000
C) $100,000
D) $250,000

Question 49

Big Top Electronics Inc. offers a two-year warranty on its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 20X0 and 20X1 were: $2,500,000 and $2,800,000, respectively. They incurred no warranty costs in 20X0 but in 20X1 they spent $175,000 on repairs related to the warranties from 20X0 and 20X1.

-Big Top's warranty expense for 20X0 is

A) $250,000
B) $100,000
C) $80,000
D) $150,000

Question 50

Future income tax obligations should be reported on which of the following?

A) A corporation's income tax return.
B) A corporation's statement of ?nancial position.
C) A corporation's income statement.
D) Statement of changes in equity.

Question 51

Alamo Autoworks, Inc. is involved in a lawsuit. Their lawyers state that it is probable that the jury will ?nd in favour of the plaintiff and Alamo will owe two million dollars. Even though the lawsuit is not yet settled, Alamo should record a liability in the statement of ?nancial position as which of the following?

A) A prepaid expense
B) A loss
C) Deferred revenue
D) A contra-asset

Question 52

When a company increases trade payables from one year to the next, what is the effect on cash ?ows?

A) A decrease in cash caused by paying down our debt to vendors.
B) An increase in cash because we have not paid cash for all the inventory and services purchased on credit during the period.
C) A decrease to cash because we will have to pay these liabilities in the future.
D) An increase to cash because we have received cash from vendors.

Question 53

Situations which require that future income tax be reported involve a difference that is called which of the following?

A) A permanent difference.
B) A reversing tax inverse difference.
C) A temporary difference.
D) A contingent liability.

Question 54

In 20X3, Toys 4 U reported inventory of $1,902 million and trade payables of $1,415 million. In 20X2, the company reported inventory of $2,464 million and trade payables of $1,280 million. What was the effect on the 20X3 cash flow from operating activities?

A) A decrease in cash of $697 million.
B) An increase in cash of $697 million.
C) A decrease in cash of $427 million.
D) An increase in cash of $427 million.

Question 55

Income tax expense reported on the income statement is $45,000 for 20X0, and the tax return for 20X0 (the ?rst year) shows an income tax liability of $42,000 because of a deduction that cannot be taken until 20X1. The future income tax amount on the statement of ?nancial position at the end of 20X0 will be which of the following?

A) debit of $3,000
B) credit of $3,000
C) credit of $42,000
D) credit of $45,000

Question 56

On December 31, 20X5, Gold Charter Airlines has $2,000,000 in short-term notes payable due on February 10, 20X6. On January 10, 20X6, Gold arranged a line of credit with Fargo Wells Bank, which allows Gold to borrow up to $1,500,000 at 1% above the prime rate for three years. On February 2, 20X6, Gold borrowed $1,200,000 from Fargo Wells Bank and used $500,000 additional cash to liquidate $1,700,000 of the short-term notes payable. What is the amount of the short-term notes payable that should be reported as current liabilities on Gold's December 31, 20X5 statement of ?nancial position (to be issued on Feb 28, 20X5) is

A) $0
B) $300,000
C) $2,000,000
D) $1,200,000

Question 57

In 20X3, C Co reported a trade payables turnover ratio of 1.85 and a current ratio of 0.66. Their statement of ?nancial position shows $2.1 billion in marketable securities not included in their current assets and cash ?ow from operations. Which of the following interpretations is most likely?

A) Since the two ratios are fairly high, it indicates C Co has little di?culty paying its bills in a timely manner.
B) Since both these ratios are low, it might indicate poor liquidity and inability to pay vendors in a timely manner.
C) C Co practices aggressive cash management policies including investing excess cash and using vendors to ?nance operations by making slow payment to them.
D) C Co must be carrying a low amount of current liabilities in comparison to its total liabilities.

Question 58

In 20X3, P Co reported an increase in trade receivables of $303 million, and an increase in inventory of $284 million. They also experienced an increase in short-term borrowings of $3,921 million and an increase in trade payables of $253 million. Calculate the net cash effect of these changes.

A) $3,587 million decrease
B) $4,761 million increase
C) $3,587 million increase
D) $4,761 million decrease

Question 59

Jake Company is involved in a lawsuit. The liability which could arise as a result of this lawsuit should be recorded on the books if the probability of Jake owing money as a result of the lawsuit is which of the following?

A) Remote and the amount can be reasonably estimated.
B) Probable and the amount cannot be reasonably estimated.
C) Reasonably possible and the amount can be reasonably estimated.
D) Probable and the amount can be reasonably estimated.

Question 60

When the occurrence of a liability is dependent on the outcome of some future event, the liability is referred to as a(n)

A) commitment.
B) accrued liability
C) contingent liability.
D) accounts payable.

Question 61

A company whose current liabilities exceed its current assets may have a liquidity problem.

Question 62

Calculation of the amount of the equal periodic payments that would be required at the end of each year to accumulate a $20,000 fund at the end of the tenth year is most readily determined by reference to a table that shows which of the following?

A) Future value of $1.
B) Present value of $1.
C) Future value of annuity of $1.
D) Present value of a single sum.

Question 63

You have been asked to compute the amount that will be available at the end of three years as a result of a single sum of $1,000 that is deposited. What is the interest concept that best describes this application?

A) Present value of a single amount.
B) Present value of an annuity.
C) Future value of a single amount.

Question 64

If a company's fiscal year is the same as the year used for property tax purposes, there should be no prepaid property tax on its year-end financial statements but there may be a property tax liability.

Question 65

A future tax asset indicates that the company

A) had some expenses that were deductible for taxes but are prepaid for accounting purposes.
B) expects to pay higher taxes in the future
C) paid their taxes for the current year in advance.
D) expects a benefit in the form of lower taxes in the future.

Question 66

A current liability must be paid out of current earnings.

Question 67

How much would Kristen have to deposit in the bank at the end of each of the next five years if she wishes to have $5,000 in the bank at the end of that time, assuming she will be earning 6% annual rate of return? (Round to the nearest dollar.)

A) $887
B) $943
C) $1,000
D) $1,187

Question 68

Current liabilities are expected to be paid within one year.

Question 69

Property tax payable is classified as a long-term liability because it is related to property, a noncurrent asset.

Question 70

Kristen's grandmother promises to give her $1,000 at the end of each of the next five years. How much is the money worth today, assuming Kristen could invest the money and earn a 6% annual rate of return? (Round to the nearest dollar).

A) $747
B) $1,338
C) $4,212
D) $5,637

Question 71

Kristen deposits $5,000 in the bank today. She will be earning 6% interest annually on her deposit. How much money will she have in the bank at the end of 5 years? (Round to the nearest dollar.)

A) $3,736
B) $6,691
C) $21,062
D) $28,186

Question 72

All the following transactions lead to temporary timing differences except:

A) the use of estimated warranty costs for calculating warranty expense
B) the use of straight-line amortization for accounting purposes
C) the recognition of dividend income for dividends received from another Canadian company
D) The use of provisions for gift card sales

Question 73

Future Income taxes are caused by which of the following?

A) A company's inability to pay income tax due in a particular tax year.
B) Accounting errors.
C) The fact that the value of one country's currency relative to that of another can change over time.
D) Differences in IFRS and ITA rules pertaining to when revenue and expenses should be recognized.

Question 74

If the market rate of interest is 10%, a rational person would just as soon receive $1,100 three years from now as what amount today (round to the nearest dollar)?

A) $783
B) $826
C) $1,000
D) $1,100

Question 75

Present value can be defined as which of the following?

A) Future amount of a sum of money held now.
B) Value today of future cash inflow(s).
C) Maturity value of a debt.
D) Sum of cash in?ows over a future period of time.

Question 76

There is a reciprocal relationship between which of the following?

A) Present value of the annuity of $1 and the present value of $1.
B) Future value of $1 and the future value of an annuity of $1.
C) Present value of $1 and the future value of $1.
D) Present value of the annuity of $1 and the future value of annuity of $1.

Question 77

An amount is to be deposited in a savings account at the end of each year in order to provide funds for a trip to Europe, at the end of the fourth year. You have been asked to determine the amount of the annual deposit. What is the interest concept that best describes this application?

A) Present value of a single amount.
B) Present value of an annuity.
C) Future value of a single amount.
D) Future value of an annuity.

Question 78

If any portion of a long-term debt is to be paid in the next year, the entire debt should be classified as a current liability.

Question 79

Kristen's grandmother promises to give her $1,000 at the end of five years. How much is the money worth today, assuming Kristen could invest the money and earn a 6% annual rate of return? (Round to the nearest dollar).

A) $747
B) $1,338
C) $4,212
D) $5,637

Question 80

How much would Kristen have to deposit in the bank today if she will be earning a 6% annual rate of return and wants to have $5,000 in the bank at the end of five years? (Round to the nearest dollar).

A) $3,736
B) $4,212
C) $4,737
D) $5,637