Info
Warning
Danger

Study Resources (Accounting)

75) Starfire Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Starfire Company Income Statement Year Ended December 31, 2015 Sales Revenue$275,000 Interest Revenue2,600 Loss on Sale of Plant Assets2,000 Total Revenues and (Losses)$279,600 Cost of Goods Sold135,000 Salary Expense66,500 Depreciation Expense32,000 Other Operating Expenses35,900 Interest Expense2,400 Income Tax Expense6,500 Total Expenses278,300 Net Income/(loss)$1,300 Additional information provided.
7 Views
View Answer
71) Allen Services purchased 20 delivery vehicles by issuing a 20-year installment Note Payable for $720,000. How would this transaction be shown on the statement of cash flows? A) in the investing activities section B) in the non-cash investing and financing activities section C) in the operating activities section D) in the financing activities.
8 Views
View Answer
18) Data for Atlantis Inc. is given below: Atlantis Inc. Comparative Balance Sheet December 31, 2015 and 2014 20152014 Assets Current Assets: Cash$12,000$10,200 Accounts Receivable, Net16,10016,800 Merchandise Inventory45,00031,000 Prepaid Expenses6,5003,900 Total Current Assets$79,600$61,900 Property, Plant, and Equipment, Net265,000233,000 Total Assets$344,600$294,900 Liabilities Total Current Liabilities$9,900$11,200 Long-term Liabilities60,00050,000 Total Liabilities69,90061,200 Stockholders' Equity Preferred Stock, 3%75,00075,000 Common Stockholders' Equity, no par$199,700$158,700 Total Liabilities and Stockholders' Equity$344,600$294,900 Prepare a horizontal analysis of the comparative balance sheet.
8 Views
View Answer
2) Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record Depreciation Expense for the year of 2014 of $12,000. Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance Sheet:Dec 31, 2013DebitCreditDec 31,.
9 Views
View Answer
Learning Objective 16-3 1) Free cash flow is calculated by adding cash payments planned for investments in long-term assets and cash dividends to the amount of net cash provided by operating activities. Answer:  FALSE Diff: 1 LO:  16-3 AACSB:  Concept AICPA Functional:  Measurement 2) If an investor wants to know how much cash a company can free.
5 Views
View Answer
77) Lewis Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Lewis Inc. Comparative Balance Sheet December 31, 2015 and 2014 20152014Increase/decrease Cash$42,000$36,000$6,000 Accounts Receivable62,00070,000(8,000) Inventory106,00050,00056,000 PP&E, net240,000180,00060,000 Total assets$450,000$336,000$114,000 Additional information provided by the company includes the following: Equipment costing $104,000 was purchased for cash. Equipment with a.
9 Views
View Answer
Learning Objective 1.5 Questions 1) Which of the following statements is false? A) If a sole proprietorship fails, the creditors can obtain repayment from the personal assets of the single owner. B) If a partnership fails, the creditors can obtain repayment from the personal assets of the partners. C) If a corporation fails, the.
8 Views
View Answer
Learning Objective 16-4 1) Martinez Company uses the direct method to prepare its statement of cash flows. It has reported Sales Revenues of $200,000 on its income statement for the year 2015. If the balance in Accounts Receivable has gone up by $10,000 during the year, then $10,000 will have to.
6 Views
View Answer
11) The following is summary of information presented on the financial statements of a company on December 31, 2015. Account 2015 2014 Current Assets $82,000 $70,000 Accounts Receivable 60,000 68,000 Merchandise Inventory 62,000 53,000 Current Liabilities 52,000 46,000 Long-term Liabilities 39,000 45,000 Common Stock 70,000 50,000 Retained Earnings 65,000 40,000 What would a horizontal analysis report show with respect to long-term liabilities? A) long-term liabilities decreased by $30,000 B) long-term liabilities decreased by 40% C) long-term liabilities decreased.
9 Views
View Answer
Learning Objective 17-4 1) Working capital measures the ability to meet long-term obligations with current assets. 2) The current ratio is calculated as the total current assets divided by the total current liabilities. 3) A high current ratio indicates that current liabilities are more than current assets. 4) The cash ratio helps to determine.
7 Views
View Answer
Learning Objective 16-5 1) Genius Inc. uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record Net Income for the year ended December 31, 2014 of $49,000. Genius Inc. Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance.
9 Views
View Answer
11) Financial accounting serves external decision makers, such as suppliers, banks, government agencies, and stockholders. 12) Management accounting serves internal decision makers, such as top executives and department heads. 13) Managerial accounting serves external users while financial accounting serves internal users. 14) The annual report is a document prepared by the board of.
8 Views
View Answer
31) Which of the following accurately describes working capital? A) Current assets minus merchandise inventory B) Current assets minus current liabilities C) Total debt minus stockholders' equity D) Cost of goods sold divided by average merchandise inventory 32) Nobell Inc. provides the following data: 2015 2014 Cash $21,000 $18,000 Accounts Receivable, Net 31,000 35,000 Merchandise Inventory 53,000 25,000 Property, Plant, and Equipment, Net 120,000 90,000 Total assets $225,000 $168,000 Net credit sales $240,000 Cost of.
10 Views
View Answer
9) Baskins Corporation's accounting records include the following items, listed in no particular order, for the year ending December 31, 2015: Other Revenues and (Expenses)Gain on Discontinued Operations$75,000 Gain on sale of Equipment$12,000Extraordinary Loss15,000 Loss on disposal of Equipment5,000Cost of Goods Sold285,000 Net Sales650,000Operating Expenses120,000 The income tax rate for the company is 45%. The.
10 Views
View Answer
31) Analyze the following transactions in the balance sheet equation using the following worksheet. 1. Initial investment of $300,000 by the owner 2. Acquire equipment for $25,000 cash 3. Acquire inventory for $6,000 on credit 4. Obtain loan of $15,000 from the bank 5. Returned $600 of inventory to supplier 6. Payment to creditor for amount.
9 Views
View Answer
11) Liabilities are economic obligations of the organization to outsiders, or claims against its assets by outsiders. 12) Accountants use the terms notes payable or notes receivable to describe the existence of promissory notes. 13) Examples of assets include cash, inventory, and capital stock. 14) Inventory is goods held by a company for.
6 Views
View Answer
5) Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record the acquisition of plant assets for $52,000 cash. Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance Sheet:Dec 31, 2013DebitCreditDec 31, 2014 Cash$18,000$21,000 Accounts.
7 Views
View Answer
20) Data for Nobell Inc. follow: 20152014 Net Sales$850,000$798,000 Cost of Goods Sold635,000580,000 Selling and Administrative Expenses50,00035,000 Other Expenses20,00015,000 Income Tax40,00055,000 Prepare a horizontal analysis of the comparative income statement of Nobell Inc. Round percentage changes to one decimal place. Please use a multiple step income statement. 21) Atlantis Inc. provides the following historical data: 201620152014201320122011 Net sales$4,970$4,500$3,980$3,270$4,750$4,400 Prepare the trend.
9 Views
View Answer
Learning Objective 1.3 Questions 1) An entity A) is a separate economic unit. B) allows a section of an organization to be a separate economic unit. C) helps accountants relate events to a defined area of accounting. D) All of the above E) None of the above 2) If liabilities increase by $10,000 during a given period.
6 Views
View Answer
4) Shelly Wagner began a sole proprietorship named Wagner Company on June 1, 20X9. Following are the transactions, which occurred during the first 10 days of June, 20X9. June 1 Shelly invested $6,600 cash in Wagner Company June 2  Wagner Company acquired equipment costing $3,900. One-third of the balance was paid in.
10 Views
View Answer
8) Avatar Company uses the indirect method to prepare its statement of cash flows. Refer to the partially completed worksheet below. Complete the worksheet, including the data showing the net change in cash, plus all control totals. Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance Sheet:Dec.
11 Views
View Answer
Learning Objective 1.1 Questions 1) The primary purpose of financial accounting is to A) supply information for external users' decision making. B) provide data for internal users' decision making. C) produce data for income taxes. D) create an audit report. E) organize the data for management. 2) Footnotes are A) included in the audit report. B) an integral part.
20 Views
View Answer
7) Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record the following transactions: Purchased Treasury Stock for $3,000 Paid dividends of $10,000 Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance Sheet:Dec 31, 2013DebitCreditDec.
10 Views
View Answer
21) As per FASB guidelines, earnings per share should appear on the face of the income statement. 22) The price/earnings ratio shows the market price of $1 of earnings. 23) The dividend payout ratio indicates the amount of the dividend as a proportion of a share's market price. 24) The price/earnings ratio indicates.
17 Views
View Answer
11) Which of the following types of financial statement analysis would be used to see how a company's operating expenses as a percentage of net sales have changed from one year to the next? A) vertical analysis B) horizontal analysis C) ratio analysis D) analysis of internal control system 12) The vertical analysis statement of.
7 Views
View Answer
6) The accountant for Tibbo Industries is required to prepare monthly financial statements. Upon opening the file with the previous month's balance sheets, the accountant notices that they have been prepared incorrectly. Prepare a corrected November balance sheet based on the information below. Balance Sheet for Tibbo Industries Prepared on November 29, 2009 Assets  Liabilities.
8 Views
View Answer
Learning Objective 1.2 Questions 1) A liability that results from a purchase of goods or services on open account is referred to as a(n) A) accounts receivable. B) notes payable. C) accounts payable. D) notes receivable. E) capital stock. 2) Which of the following statements is true? A) Owners' equities are economic sacrifices after deducting liabilities. B) Assets are.
5 Views
View Answer
11) Interest Expense paid on a Note Payable would be included in the operating activities section of the statement of cash flows. Answer:  TRUE Diff: 2 LO:  16-4 AACSB:  Concept AICPA Functional:  Measurement 12) Avatar Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for the year.
6 Views
View Answer
49) The balance sheet of Atlantis Inc. is below: Atlantis Inc. Comparative Balance Sheet December 31, 2016 and 2015 20162015 Assets Total Current Assets$200,000$100,000 Property, Plant, and Equipment, Net550,000500,000 Other Assets50,00050,000 Total Assets$800,000$650,000 Liabilities Total Current Liabilities$150,000$100,000 Long-term Debt350,000250,000 Total Liabilities500,000350,000 Stockholders' Equity Total Stockholders' Equity300,000300,000 Total Liabilities and Stockholders' Equity$800,000$650,000 Calculate working capital for both years. 50) The balance sheet of Atlantis Inc. is below: Atlantis Inc. Comparative Balance.
8 Views
View Answer
31) The payment of interest on a loan would be considered a ________ on the statement of cash flows (direct method). A) cash outflow for operating activities B) cash outflow for investing activities C) cash outflow for financing activities D) non-cash activity Answer:  A Diff: 2 LO:  16-4 AACSB:  Concept AICPA Functional:  Measurement 32) On the statement of cash flows.
10 Views
View Answer
11) Payton Corporation, acquired some office equipment, including a desk costing $900. The owner of the business next door said that he had been searching for a desk just like that one, so Payton Corporation, sold the desk to its business neighbor at cost, receiving $400 in cash, with the.
7 Views
View Answer
21) Which of the following would appear on a statement of cash flows prepared using the direct method? A) adjustments to net income B) cash payments for salaries C) adjustments for gains and losses on sale of property D) increase/decrease in current assets Answer:  B Diff: 2 LO:  16-4 AACSB:  Application AICPA Functional:  Measurement 22) Which of the following items.
10 Views
View Answer
  Learning Objective 17-1 1) An annual report provides information about a company's financial condition. 2) A quarterly report filed with the Securities and Exchange Commission is called a Form 10-K. 3) Management's discussion and analysis section of the annual report is the company's attempt to explain its financial statements and to discuss its.
15 Views
View Answer
Learning Objective 17-2 1) The study of percentage changes in comparative financial statements is called horizontal analysis. 2) Horizontal analysis compares each item in the income statement to the net sales amount. 3) Trend analysis is a form of horizontal analysis. 4) If an analyst wants to see how gross profit of a company.
10 Views
View Answer
Learning Objective 17-5 1) A corporation's income statement includes some unique items that do not often apply to smaller businesses. 2) Income from continuing operations helps investors to make predictions about past performance of the company. 3) The disposal of a financial segment would be reported as discontinued operations. 4) Gains and losses on.
7 Views
View Answer
Learning Objective 1.4 Questions 1) Twinkle Toes Dance Company December 31, 20X9 Cash $10,000 Accounts payable $5,600 Accounts receivable 4,000 Notes payable 17,000 Inventory 8,000 Common stock 5,000 Equipment 14,800 Retained earnings 9,200 Total Assets $36,800 Total liabilities and shareholders equity $36,800 What is the name of the financial statement above? A) Income Statement B) Balance Sheet C) Statement of Cash Flows D) Statement of Changes in Shareholders Equity E) Statement of Retained Earnings 2) Following is.
9 Views
View Answer
6) Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record the following transactions: Issued Common Stock for $28,000 Issued new Long-Term Notes Payable for $34,000 Repaid Long-Term Notes Payable for $40,000 Avatar Company Spreadsheet for Statement of Cash Flows Year Ended.
10 Views
View Answer
61) Lopez Corp. uses the indirect method to prepare its statement of cash flows. Refer to the following information for the year 2014: 1) Long-Term Notes Payable, beginning balance, $80,000 2) Long-Term Notes Payable, ending balance, $76,000 3) Common Stock, beginning balance, $3,000 4) Common Stock, ending balance, $26,000 5) Retained Earnings, beginning balance, $75,000 6).
7 Views
View Answer
19) Prepare a comparative common-size income statement for Nobell Inc. using the 2015 and 2014 data. Round off the percentages to one decimal place. Nobell Inc. Comparative Income Statement Years Ended December 31, 2015 and 2014 20152014 Net Sales$ 6,355$ 4,920 Cost of Goods Sold3,3702,200 Gross Profit2,9852,720 Operating Expenses: Selling Expenses675580 Administrative expenses410425 Total Expenses1,0851,005 Operating Income1,9001,715 Other Revenues and (Expenses): Interest Revenue00 Interest Expense(400)(695) Total.
5 Views
View Answer
41) Partridge Inc. provides the following information for the year 2014: Net income $31,200 Market price per share of common stock $12.00/share Dividends paid $0.80/share Common stock outstanding at Jan 1, 2015 110,000 shares Common stock outstanding at Dec 31, 2016 150,000 shares The company has no preferred stock outstanding. Calculate the dividend yield for common stock. A) 6.67% B) 1.67% C) 3.67% D) 4.67% 42).
11 Views
View Answer
17) Prepare the vertical analysis report of the balance sheet data given below: Round off the percentages to two decimal places   Balance Sheet December 31, 2015 2015 Assets Current Assets: Cash and Cash Equivalents$10,000 Accounts Receivable, Net15,600 Merchandise Inventory38,000 Total Current Assets$63,600 Long-term Investments$15,000 Property, Plant, and Equipment, Net195,000 Total Assets$273,600 Liabilities Current Liabilities: Accounts Payable$8,500 Notes Payable1,400 Total Current Liabilities$9,900 Long-term Liabilities$54,000 Total Liabilities$63,900 Stockholders' Equity Common Stock$161,000 Retained Earnings48,700 Total Stockholders'.
7 Views
View Answer
Learning Objective 17-3 1) An analysis of a financial statement that reveals the relationship of each statement item to its base amount, which is the 100% figure, is known as vertical analysis. 2) In a vertical analysis of the income statement, each line item is shown as a percentage of net sales. 3).
7 Views
View Answer
36) The income statement and a partial balance sheet of Williams Company for the year ended December 31, 2014 is presented below. Prepare the operating activities section of the statement of cash flows using the direct method. Assume the Accrued Liabilities relate to Miscellaneous Operating Expenses. Income Statement Sales Revenues$1,500,000 Cost of Goods.
9 Views
View Answer
80) Samuel Corp. has provided the following information for the year ended December 31, 2015. Samuel Corp Comparative Balance Sheet December 31, 2015 and 2014 20152014Increase / (Decrease) Assets Current Assets: Cash$33,000$13,000$20,000 Accounts Receivable29,00036,000(7,000) Inventory56,00029,00027,000 Plants Assets, net126,00092,00034,000 Total Assets$244,000$170,000$74,000 Accounts Payable$9,000$13,000$(4,000) Accrued Liabilities7,0003,0004,000 Long-term Notes Payable70,00079,000(9,000) Total Liabilities$86,000$95,000$(9,000) Common Stock$55,000$3,000$52,000 Retained Earnings115,00078,00037,000 Treasury Stock(12,000)(6,000)(6,000) Total Stockholders' Equity$158,000$75,000$83,000 Total Liabilities and Stockholders' Equity$244,000$170,000$74,000 Samuel Corp Income Statement Year ended December 31, 2015 Sales Revenue$291,300 Interest Revenue1,000 Gain.
8 Views
View Answer
21) An owner's investment into a business will increase assets and decrease liabilities. 22) An account is a summary record of the changes in a particular asset, liability, or owners' equity. 23) A transaction affects the financial position of an entity and can be reliably recorded in terms of money. 24) A transaction.
7 Views
View Answer
4) Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record the increases and decreases in current assets (other than cash) and current liabilities. Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance.
6 Views
View Answer