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11) Interest Expense paid on a Note Payable would be included in the operating activities section of the statement of cash flows. 12) Avatar Auto Parts Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for the year 2015: 1) Sales Revenue, $515,000 2).
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11) A business's cash receipts and cash payments for a specific period are reported on a(n) ________. A) income statement B) balance sheet C) cash flow statement D) cash reconciliation statement 12) Which of the following is one of the purposes of the statement of cash flows? A) to predict future net income B) to evaluate management.
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Learning Objective 14-3 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. 2) If an investor wants to know how much cash a company can free up for new opportunities, such as.
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11) Partisan Services purchased ten delivery vehicles by issuing a 10-year installment note payable for $320,000. This transaction would be shown in the investing activities section of the statement of cash flows. 12) While preparing the statement of cash flows using the indirect method, Depreciation Expense is subtracted from Net Income.
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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 Transaction Analysis Transaction Analysis Balance Panel A—Balance.
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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).
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Learning Objective 15-1 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 discuss its performance. 4).
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11) Which of the following corporate characteristics is a disadvantage of a corporation? A) Stockholders of a corporation have limited liability. B) A corporation has a continuous life. C) There is no mutual agency among the stockholders and the corporation. D) Earnings of a corporation are taxed twice. 12) Outstanding stock refers to the ________. A).
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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 Panel A—Balance Sheet Dec 31, 2013 Debit Credit Dec 31, 2014 Cash $18,000 $21,000 Accounts Receivable 35,000 4,000 31,000 Inventory 25,000 28,000 53,000 Plant.
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Learning Objective 13-5 1) Companies can report a negative amount in retained earnings. 2) Companies usually report their retained earnings restrictions on the balance sheet. 3) The statement of retained earnings reports how the company's retained earnings balance changed from the beginning of the period to the end of the period. 4) A deficit.
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36) The income statement and a partial balance sheet of Williams Alloy 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.
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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 $10,000 Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 Transaction Analysis Transaction Analysis Balance Panel A—Balance Sheet Dec 31,.
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21) Which of the following would appear on a statement of cash flows prepared using the direct method? A) adjustments to net income B) cash payments for salaries C) adjustments for gains and losses on sale of property D) increase/decrease in current assets 22) Which of the following items would be included as an operating.
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41) Which of the following will happen to a stockholder's percentage ownership in the stock of a corporation when the corporation declares a stock dividend? A) The stockholder's percentage ownership decreases. B) The stockholder's percentage ownership can increase or decrease. C) The stockholder's percentage ownership increases. D) The stockholder's percentage ownership remains unchanged. 42) Which.
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Learning Objective 12-7 1) The fact that invested cash earns income over time is called the time value of money. 2) Simple interest means that interest is calculated on the principal and on all previously earned interest. 3) Compound interest means that interest is calculated only on the principal amount. 4) A stream of.
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79) Karaoke Records Company uses the indirect method to prepare its statement of cash flows. Refer to the following sections of the comparative balance sheet: Karaoke Company Comparative Balance Sheet December 31, 2014 and 2013 20142013Increase/decrease Accounts Payable$ 6,000$ 9,000$(3,000) Accrued Liabilities3,0001,5001,500 Long-Term Notes Payable126,000135,000(9,000) Total liabilities$ 135,000$ 145,500$(10,500) Common Stock45,0003,00042,000 Retained Earnings169,500111,00058,500 Treasury Stock(12,000)(7,500)(4,500) Total equity202,500106,50096,000 Total liabilities and equity337,500252,00085,500 Additional information: ?No stock.
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Learning Objective 13-6 1) Earnings per share is calculated as net income plus preferred dividends divided by the weighted average number of common shares outstanding. 2) A higher price/earnings ratio signifies a higher return on investment. 3) The rate of return on common stockholders' equity shows the relationship between net income available to.
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Learning Objective 14-1 1) The statement of cash flows explains why net income as reported on the income statement does not equal the change in the cash balance. 2) Investors and management use the statement of cash flows to evaluate a firm's profitability. 3) Operating activities on a statement of cash flows include.
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76) Avatar Auto Parts Company uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Avatar Company 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.
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Learning Objective 13-2 1) When a corporation sells 10,000 shares of $10 par value common stock for $120,000, the Common Stock account is credited for $100,000. 2) Stock sold for amounts in excess of par value results in a gain reported on the income statement. 3) The price that the corporation receives from.
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Learning Objective 15-2 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.
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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.
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Learning Objective 13-1 1) A corporation is a separate legal entity and is organized independently of its owners. 2) Stockholders of a corporation are not personally liable for the corporation's debt. 3) All classes and types of a corporation's stock carry the same degrees of risk for the stockholder. 4) Preferred stockholders receive a.
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71) Allen Services purchased twenty delivery vehicles by issuing a 20-year installment Note Payable for $720,000. On the statement of cash flows, this transaction would be shown in the ________. A) investing activities section B) non-cash investing and financing activities section C) operating activities section D) financing activities section 72) Which of the following will.
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71) Which of the following actions could increase the balance in the Paid-In Capital in Excess of Par—Common Account? A) cash dividend declared B) stock split C) 10% stock dividend declared D) purchase of treasury stock 72) Which of the following actions will decrease the balance in Retained Earnings? A) repayment of bond principal B) stock split C).
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21) Nelson Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Nelson Corp. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/decrease Accounts Payable $8,000 $9,000 $(1,000) Accrued Liabilities 3,000 1,500 1,500 Long-Term Notes Payable 56,000 60,000 (4,000) Total liabilities $67,000 $70,500 $(3,500) The change in Accounts Payable will be shown as a negative cash flow in the.
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Learning Objective 13-3 1) The declaration and payment of cash dividends cause a decrease in both assets (Cash) and stockholders' equity (Retained Earnings) for the corporation. 2) The declaration of a cash dividend does not create an obligation (liability) for the corporation. 3) Declaring and paying dividends causes an increase in both assets.
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Learning Objective 14-5 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 Transaction Analysis Transaction Analysis Balance Panel.
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35) Avatar Auto Parts Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ending December 31, 2015: Avatar Company Comparative Balance Sheet December 31, 2015 and 2014 2015 2014 Increase / (Decrease) Cash $33,000 $13,000 $20,000 Accounts Receivable 29,000 36,000 (7,000) Inventory 56,000 29,000 27,000 Plant and Equipment, net 126,000 92,000 34,000 Total Assets $244,000 $170,000 $74,000 Accounts Payable $9,000 $13,000 $(4,000) Accrued Liabilities 7,000 3,000 4,000 Long-term Notes Payable 70,000 79,000 (9,000) Total Liabilities $86,000 $95,000 $(9,000) Common Stock $55,000 $3,000 $52,000 Retained.
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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.
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11) The following information is from the balance sheet of Tudor Corporation as of December 31, 2015. Preferred Stock, $100 par $300,000 Paid-In Capital in Excess of Par—Preferred 21,000 Common Stock, $1 par 102,000 Paid-In Capital in Excess of Par—Common 306,000 Retained Earnings 78,900 Total Stockholders' Equity $807,900 What was the total paid-in capital as of December 31, 2015? A) $606,000 B) $807,900 C) $729,000 D) $708,000 12).
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21) Which of the following occurs when a cash dividend is declared? A) liabilities remain unchanged B) stockholders' equity decreases C) liabilities decrease D) assets increase 22) Dividends in arrears are ________. A) a liability on the balance sheet B) passed dividends on noncumulative preferred stock C) passed dividends on cumulative preferred stock D) passed dividends on common stock 23).
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Learning Objective 14-2 1) Issuing preferred stock to stockholders in exchange for cash would be shown under the financing activities section of the statement of cash flows. 2) Buying property, plant, and equipment for cash would be considered a cash outflow for the financing activities section of the statement of cash flows. 3).
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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 Panel A—Balance Sheet Dec.
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Learning Objective 12-5 1) The United Way Payable account would normally be shown on the balance sheet under current liabilities. 2) FICA—OASDI Tax Payable would normally be shown on the balance sheet under long-term liabilities. 3) Federal Unemployment Taxes Payable is typically shown on the balance sheet under the long-term liabilities section. 4) The.
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31) Which of the following sections of the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity? A) the financing section B) the operating section C) the investing section D) the non-cash investing and financing section 32) Which of the following sections of the statement of cash flows includes.
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Learning Objective 13-4 1) Treasury stock is a contra equity account. 2) The journal entry for the purchase of treasury stock includes a credit to the Cash account. 3) Treasury stock is recorded at cost without reference to par value. 4) The purchase of treasury stock ________. A) decreases both assets and stockholders' equity B) increases.
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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 Transaction Analysis Transaction Analysis Balance Panel A—Balance Sheet Dec 31, 2013 Debit Credit Dec.
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Learning Objective 14-4 1) Martinez Installations 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.
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37) Sentrino Brewery Company uses the direct method for its statement of cash flow. Assume Accrued Liabilities relate to Operating Expenses. It reports the following information regarding the year ending December 31, 2014: Income Statement Sales Revenue$312,000 Cost of Goods Sold247,000 Operating expenses:32,500 Net Income$32,500 Partial Balance Sheet 20132014 Accounts Receivable (net)$15,600$19,500 Inventories28,60023,400 Accrued Liabilities3,9001,560 Accounts Payable (inventory)9,10015,600 Assume that there were.
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41) Walker Corp. uses indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Walker Corp. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/decrease Cash $45,000 $27,000 $18,000 Accounts Receivable 48,000 45,000 3,000 Inventory 180,000 132,000 48,000 Total assets $273,000 $204,000 $69,000 How will the change in inventory be shown on the statement of cash flows? A) positive cash flow under the.
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Learning Objective 12-8 1) On January 1, 2015, Finch Company issued $72,000 of 5-year bonds with a stated rate of 8%. The market rate at time of issue was 12%, so the bonds were discounted and sold for $61,401. Finch uses the effective-interest method of amortization for bond discount. Semiannual interest.
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34) Avatar Auto Parts Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ending December 31, 2015: Avatar Company Comparative Balance Sheet December 31, 2015 and 2014 2015 2014 Increase / (Decrease) Cash $33,000 $13,000 $20,000 Accounts Receivable 29,000 36,000 (7,000) Inventory 56,000 29,000 27,000 Plant and Equipment, net 126,000 92,000 34,000 Total Assets $244,000 $170,000 $74,000 Accounts Payable $9,000 $13,000 $(4,000) Accrued Liabilities 7,000 3,000 4,000 Long-term Notes Payable 70,000 79,000 (9,000) Total Liabilities $86,000 $95,000 $(9,000) Common Stock $55,000 $3,000 $52,000 Retained.
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