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Study Resources (Accounting)

68) Indicate the effect that each of the following transactions has on the cash balance. Use + for increase, - for decrease, and 0 for no change. ________  a) Payment of salaries ________  b) Payment of interest ________  c) Payment of dividends ________  d) Sale of common shares ________  e) Payment of accounts payable ________  f).
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  A) Operating activities - Increase in cash B) Operating Activities - Increase in cash C) Does not appear on the cash flow statement D) Non-cash investing financing activity in the notes E) Financing activities - Decrease in cash F) Investing activities - Increase in cash G) Operating activities - Decrease in cash H) Investing activities - Decrease.
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5) Referring to Table 16-3, the investment in common shares account will appear on Harper Corporation's December 31, 2014, balance sheet at: A) $864,000 B) $836,000 C) $890,000 D) $746,000 36) Referring to Table 16-3, assume on December 31, 2014, Harper Corporation sells 50% of its investment in Martin Corporation for $525,000. Harper Corporation will.
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49) Sky Corporation engaged in several transactions involving a long-term investment. The equity method is used to account for this investment because Sky exercises significant influence over Lift. a) On Jan 1, 2014, Sky Corporation purchased 2,000 common shares of Lift Corporation for $12 per               share. This represents 20% ownership.
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1) The primary reason for conducting financial analysis is to uncover fraud. 2) It is generally considered more useful to know the percentage change in financial statement amounts from year to year than to know the absolute dollar amount of their change. 3) When preparing a horizontal analysis of financial statements, subtract.
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25) Investors analyze the cash flow statement to determine: A) total interest earned during the period B) which companies are reporting unearned revenue C) the debt-to-equity ratio D) which businesses are expanding and which are cutting back on investments 26) The cash flow statement is divided into three major categories including: A) financing, capital, and investing.
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  Table 17-6 The income statement and partial balance sheet for the Jefferson Company is presented below. Jefferson Company Income Statement For the Year Ended December 31, 2014 Revenues :      Sales revenue $500,000 Expenses:      Cost of goods sold $ 390,000      Salary expense 70,000      Amortization expense 20,000      Other operating expenses     10,000 Total expenses   490,000 Net income $  10,000 Jefferson Company Partial Balance Sheet December 31, 2014 2014 2013 Cash $ 80,000 $.
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21) Comparing operating expenses in 2014 with operating expenses in 2013 is an example of: A) horizontal analysis B) vertical analysis C) ratio analysis D) economic-value-added analysis 22) Assuming the inventory balance at the end of 2014 is $20,000, and it has increased by 10% since the end of 2013, the balance at the end.
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35) Cash received from the sale of a long-term investment would appear in the: A) investing activities section B) financing activities section C) operating activities section D) would not appear on the cash flow statement 36) Cash received from dividends on shares owned as a  long-term investment would appear in the: A) investing activities section B) financing.
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33) Complete a vertical analysis on the La Paz Company balance sheet data shown in the format below: (Dollar amounts in thousands) 2014     Amount % of total Assets Current assets: Cash $  10,000 Accounts receivable, net 15,600 Inventory    38,000    Total current assets    63,600 Property, plant and equipment, net 195,000 Other long-term assets    15,000 Total assets $273,600 Liabilities Current liabilities: Accounts payable $   8,500.
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19) Refer to Table 17-1. The payments to suppliers for inventory during the period were: A) $343,800 B) $353,000 C) $368,000 D) $425,500 20) Mark Corporation's inventory account increased $26,800 and its accounts payable account (which relates to the purchase of merchandise only) decreased $18,240 during the year. Mark also reported sales of $789,500 and.
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55) Free cash flow is: A) cash available from operations B) cash available from investing activities C)  cash available from operations after paying for planned investments in long-term assets D) cash available from operations after paying dividends to common shareholders 56) Which of the following describes the operating activities as shown in the cash flow.
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70) For each event below, determine if it should be classified as an operating activity, investing activity, or financing activity. Then determine the increase or decrease to the cash account. Transaction Type of Activity Effect on Cash 1. Sold 1,000 common shares for cash at $20 per share. 2. Purchased equipment for $500,000 cash. 3..
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11) Bass Electronics Corporation sold merchandise on account to a British company for 80,000 British pounds. Each pound was worth $2.35. The entry to record this sale is: A) Accounts Receivable 188,000         Sales Revenue 188,000 B) Accounts Receivable 80,000 Foreign-Currency Transaction Loss 108,000         Sales Revenue 188,000 C) Accounts Receivable 188,000        Sales Revenue 108,000        Foreign-Currency Trans. Gain 80,000 D) No entry is recorded until.
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9) Dodge Corporation reported cash collections on account of $90,700 and an increase of $13,500 in accounts receivable for the same period. Sales on account for the period were: A) $104,200 B) $90,700 C) $77,200 D) $97,450 10) Pinto Corporation reported sales of $895,000 and its accounts receivable balance increased $13,500 during the same period..
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1) Foreign-currency transaction gains or losses are reported as part of net sales on the income statement. 2) The measure of one currency against another currency is called the foreign-currency exchange rate. 3) A foreign currency transaction gain or loss occurs when the exchange rate changes between the date an order is.
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4) Under the indirect method, a gain resulting from the sale of equipment would: A) be subtracted from net income in the operating activities section B) be added to net income in the operating activities section C) appear in the financing activities section D) appear in the schedule of noncash investing and financing activities 5).
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1) Cash collections from customers, cash receipts of interest, and cash receipts of dividends would all be shown as financing activities on the cash flow statement. 2) Amortization expense is not listed on a direct-method cash flow statement since this item has no effect on cash. 3) Gains and losses on the.
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27) The following selected data for Ryder Corporation for the year ended December 31, 2014, are available to you for preparing the cash flow statement: Cost of goods sold$56,500Sales revenue$97,300 Amortization expense14,100Interest revenue4,100 Income tax expense2,300Dividend revenue3,600 Other operating expenses17,700Salary expense24,000 Loss on sale of investments1,400Interest expense5,900 Gain on sale of property,       plant, and equipment7,200 The.
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21) Refer to Table 17-5.  On the cash flow statement, what amount will be shown for payments to suppliers for operating expenses? A) $26,800 B) $23,200 C) $30,000 D) $18,600 22) Refer to Table 17-5.  On the cash flow statement, what amount will be shown for cash flow from operating activities? A) $26,800 B) $29,200 C) $23,000 D) $18,600 A).
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1) Under International Financial Reporting Standards (IFRS), the Cash Flow Statement is  called the Statement of Cash Flows. 2) Under Accounting Standards for Private Enterprises (ASPE), dividends received and paid are reported as investing and financing activities respectively. 3) Under Accounting Standards for Private Enterprises (ASPE), receipts of interest and dividends are .
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6) Long-term investments in bonds are accounted for at fair value. 7) Long-term bond investments are reported on the balance sheet at: A) their original cost B) their amortized cost C) the lower of their original cost or year-end market value D) at market value 8) If a bond investment is classified as a Long-Term.
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  Table 17-3 Cando Company uses the indirect method to prepare its statement of cash flows. Refer to the following information: 2014 2013 Increase/decrease Cash $  17,000 $  12,000 $  5,000 Accounts receivable 26,000 29,000 (3,000) Inventory 49,000 35,000 14,000 Property, Plant & Equipment (net) 110,000 80,000 30,000     Total assets $202,000 $156,000 $  46,000 Accounts payable 7,000 $  10,000 $  (3,000) Accrued.
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45) You are reviewing the financial statements of three companies in the same industry. Specifically, you are interested in the transactions surrounding property, plant, and equipment (PPE) during the past year. The following information is available for the three companies. Compute the unknowns. AB Co. DC Co. PG Co. Beginning PPE, net of amortization $850,000 .
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82) Dividend received from an investment in shares. 83) Cash collected for interest on a note receivable. 84) Cash collected for principal on a note receivable. 85) Cash collected for interest on a bond investment. 86) Cash paid for principal on a note payable. 87) Cash paid for income taxes of the business. 88) Equipment is.
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29) Cash payments to employees equals salary expense plus the: A) increase in salary payable B) decrease in salary payable C) beginning balance in salary payable D) ending balance in salary payable 30) Salary payable at January 1, 2014, was $45,690 and at December 31, 2014, was $53,420. If the income statement reported salary expense.
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45) The distribution of a stock dividend would appear in the: A) operating activities section B) financing activities section C) investing activities section D) It would not appear on the cash flow statement. 46) The payment of a  cash dividend would appear in the: A) operating activities section B) financing activities section C) investing activities section D) It would.
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11) Which of the following statements accurately describes the cash flow statement? A) It shows the relative proportion of debt and assets. B) It shows the link between accrual based income and the cash reported on the balance sheet. C) It indicates when long-term debt will mature. D) It shows the link between book.
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  Table 16-6 The following are transactions in the purchase and sale of Epstein Ltd. shares by Monty Inc. January 15, 2013Purchase 1, 000 shares of Epstein at $25.00 February 10, 2013Received $1.00 dividend from Epstein December 31, 2013Epstein reported net income of $10,000. December 31, 2013Market value of Epstein shares $24.50. June 30, 2014Sold all.
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41) The following table shows selected data for Wong Corporation for the past five years ended December 31, 2014: 20142013201220112010 Net sales$19,500$17,400$18,200$16,500$14,900 Cost of goods sold9,50010,3009,5008,9008,000 Inventory13,00012,2008,7009,5009,300 Net accounts receivable7,5006,8007,2007,0006,500 a) Prepare an analysis showing the trend percentages for the four years 2011-2014, using 2011 as the base year. b) What was the inventory turnover for 2013? c).
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69) State whether each event below should be classified as an operating activity, investing activity, financing activity, shown in a separate schedule or note of noncash investing and financing activities, or not disclosed on the cash flow statement. _______________  a) Paid for merchandise purchased on account _______________   b) Received stock dividends _______________   c).
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31) Refer to Table 18-4. What would horizontal analysis report with respect to long-term liabilities? A) That long-term liabilities decreased by $30,000 B) That long-term liabilities decreased by 40% C) That long-term liabilities decreased by 60% D) That long-term liabilities decreased by 67% 32) La Paz Company reported the following data: (Dollar amounts in millions) 2014 2013 Amount of.
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21) The operating activities section from the cash flow statement of Folly Corporation is listed below. Folly Corporation Cash Flow Statement For the Year Ended December 31, 2014 Cash flows from operating activities: Net income$39,000 Add (subtract) items that affect net income and cash flows differently:  Amortization$20,100 Loss on sale of investments1,400 Gain on sale of property, plant,.
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  Table 16-11 Parent Corporation paid $110,000 to acquire 60% of the common shares of Subsidiary Inc. on December 31, 2014. At that date, Parent Corporation also had an outstanding note payable to Subsidiary Inc. in the amount of $50,000. Assume that Parent Corporation and Subsidiary Inc. had the following account balances at.
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  Table 16-12 On June 30, 2014, Robin Corporation purchased five-year, 7% bonds of Saxton Limited as an investment at a price of 94 based on a market rate of interest of 8.5%. Robin Corporation plans on holding these bonds for the five-year term when their maturity value will be $20,000. Robin.
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11) Horizontal analysis involves the study of: A) the changes in individual financial statement amounts as a percentage of some related total B) percentage changes in various financial statement amounts from year to year C) the change in key financial statement ratios over a certain time frame or horizon D) the relationship of one.
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39) Following is a comparative income statement for Chui Corporation: Chui Corporation Comparative Income Statement For the Years Ended December 31, 2014 and 2013 20142013 Net sales$122,000 $120,000 Expenses: Cost of goods sold62,00057,000 Selling and general expenses 20,00012,000 Interest expense12,00014,000 Income tax expense      6,000     7,000 Total expenses 100,000                 90,000 Net income $ 22,000$ 30,000 a) Prepare a horizontal analysis.
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23) On December 31, 2014, Parent Corporation paid $800,000 to acquire 100% of the voting common shares of Child Corporation. At that date Child Corporation had common shares of $500,000 and retained earnings of $250,000. Assume any amount paid in excess of shareholders' equity is attributable to goodwill. a) Prepare the.
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27) Refer to Table 18-5. On a vertical analysis, what percentage would be shown for net income? A) 12.1% B) 8.8% C) 9.8% D) 27.3% 28) Oglethorpe Company reports the following information from the vertical analysis of its income statement: Net income: 4.2 % in 2014 3.9% in 2013 Which of the following statements could be logically concluded from.
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18) The Farmer Corporation engaged in the following transactions during 2014.  Farmer uses a perpetual inventory system: Mar. 31Purchased merchandise from an Dutch supplier at a cost of 100,000 Euros. The exchange                             rate on this date was $1.30 per Euro. Apr . 19Paid for the merchandise. The exchange rate on.
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