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1. Jones Transportation currently has 500,000 shares of stock outstanding. The firm wants to expand its operations and has decided to issue $3 million in new equity through a rights offering. The subscription price will be $15 per share and each shareholder will receive one right for each share of stock they currently own. What does a current shareholder need to acquire one new share of stock in this offering?

   	A.	$15
   	B.	2.5 rights plus $15
   	C.	1 right plus $15
   	D.	1 right plus $37.50

2. A sale and leaseback arrangement does which one of the following?

	A.	Allows the lessor to continue using the leased asset without any interruptions.
	B.	Allows the lessee to retain title of the asset
	C.	Allows the lessee to generate cash while continuing to have use of the asset.
	D.	Provides the lessee with an immediate cash inflow equivalent to the initial lease payment

3. The general purposes of FAS 13 are to:

	A.	outline the accounting and tax aspects of a leveraged lease arrangement
	B.	outline the accounting and tax aspects of a sale and leaseback arrangement
	C.	set forth both the tax and legal responsibilities of lessors.
	D.	set forth the criteria of a capital lease and require that capital leases be recorded on the balance sheet.

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