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11.2   Account for other items on the income statement 1) Taxable income is found on the: A) income statement B) balance sheet C) tax return D) retained earnings statement 2) When a company sells a segment of its business, the gain or loss on the disposal of the segment is shown as: A) other gains or losses.
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13.1   Perform horizontal analysis 1) Horizontal analysis involves the study of: A) percentage changes in comparative financial statements B) percentage and/or dollar amount 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 changes in individual financial statement.
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11) Activities which lead to an increase or decrease in long-term debt of a corporation are referred to as: A) operating activities B) investing activities C) financing activities D) future debt activities 12) Only the operating activities section of a statement of cash flows is prepared differently when using the indirect method. 13) Only the investing.
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11) Prevage Corporation has 10,000 shares of $10 cumulative preferred shares outstanding and 50,000 common shares outstanding. As of the beginning of this fiscal year, there were 2 years' dividends in arrears on the preferred shares. The board of directors wants to give the common shareholders a $1.50 dividend per.
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52) Given the following information calculate JetNew's free cash flow for 2014. Net Income$965,000 Depreciation Expense330,500 Increase in Accounts Receivables85,700 Planned investment in property860,000 Planned investment in equipment350,000 Increase in Accounts Payable9,200 Decrease in inventory260,000 Increase in Accrued liabilities75,000 Increase in Prepaid Expenses32,000 Decrease in Long-Term Investments140,000 Increase in Common Shares65,000 Gain on sale of Land43,000 53) Given the following information calculate.
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21) Following is the shareholders' equity section of the balance sheet of the Everslim Corporation: Share capital: Common shares, 100,000 shares authorized, 65,000 shares issued $650,000 Total share capital$650,000 Retained earnings 349,000 Total shareholders' equity$999,000 The common shares are currently selling for $15.50 per share. The balance in the Common Shares account after the distribution of a $0.75.
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58) Omemee Company had the following transactions during the year: Net Loss                                  ($36,000) depreciation                                 $28,000 Increase in accounts receivable                   $35,000 Decrease in inventories                         $14,500 Increase in accounts payable                     $34,000 Decrease in income taxes payable                  $6,700 Decrease in wages payable                       $1,800 Proceeds on Sale of Equipment                  $380,000 Repayment of bonds                          $250,000 Issuance of Common shares                    $100,000 Proceeds on sale of land                       $150,000 Gain on sale of land                           $20,000 Payment of dividends                          $10,000 Determine the cash from financing activities.
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11) Cassidy Lake Corporation sold some of its used equipment for $65,000. The indirect method statement of cash flows shows an addition to net income of $6,000. The accumulated depreciation on the equipment to date of sale was $63,000. The original cost of the equipment was: A) $69,000 B) $71,000 C) $134,000 D) $122,000 12).
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26) Based upon recent accounting scandals, identify potential red flags that may be discovered in financial analysis. 27) Barking Shark International Corporation Balance Sheet December 31, 2014 and 2013 20142013 Current assets Cash$ 10,000$ 5,000 Short-term investments7,00010,000 Accounts receivable, net30,00023,000 Inventory37,00035,000 Prepaid expenses4,0003,000 Total current assets$ 88,000$ 76,000 Property, plant, and equipment, net33,30035,000 Other assets27,00022,500 Total assets$148,300$133,500 Current liabilities Short-term borrowings$ 28,400$ 13,900 Accounts payable20,00022,500 Total current liabilities$48,400$36,400 Non-current.
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11.5   Differentiate between management's and the auditor's responsibilities in financial reporting 1) Companies issuing publicly-traded stock are required to have their financial statements audited by an external auditor. This requirement is placed on corporations by the: A) Canada Revenue Agency B) Provincial Securities Commissions C) Various federal and provincial incorporating acts D) the Prime Minister.
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19) Prepare a horizontal analysis of the following comparative income statement for Westwind Corporation. Round percentage changes to the nearest one-tenth percent. Westwind Corporation Comparative Income Statement For the Years Ended December 31, 2014 and 2013 20142013 Total revenue$1,400,000$1,250,000 Expenses: Cost of goods sold$925,000$830,000 Operating expenses313,000280,000 Interest expense14,00012,000 Income tax expense48,30038,000 Total expenses$1,300,300$1,160,000 Net income$99,700$90,000 20) Data for the most recent four fiscal.
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10.7   Report equity transactions and events in the financial statements 1) Proceeds from the issuance of shares appear in which, if any, section of the cash flow statement? A) operating activities section B) investing activities section C) financing activities section D) Proceeds from the issuance of shares do not appear in the cash flow statement. 2).
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32) Selected data from three companies appear below: Ashpot Co. Potassium Co. Phosphate Co. Sales $425,000 $325,000 $300,000 Cost of goods sold 280,000 230,000 200,000 Increase (decrease) in inventory (40,000) 25,000 42,000 Increase (decrease) in accounts receivable 63,000 (20,000) 22,000 Increase (decrease) in accounts payable 37,000 30,000 (16,000) Determine the cash paid to suppliers for inventory during the year for each company. The Accounts payable account relates solely to the purchase of inventory. 33).
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16) Name some common financial ratios used by investors to compare different companies. 17) How is it possible for investors to compare two companies of different sizes or companies that operate in different industries? 18) For each of the following items, explain its significance and show how the ratio mentioned is calculated: a..
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30) As the accountant at Soil Test Corporation, you are responsible for preparing the cash flow statement. You have decided to prepare the statement using the direct method and have gathered together the following data from the accounting records: Payments of non-current debt$220,000 Collections on accounts receivable215,600 Acquisition of equipment by issuing non-current note.
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11.3   Compute earnings per share 1) Earnings per share (EPS) is calculated by: A) dividing the average number of common shares outstanding throughout the year by net income B) dividing net income by the average number of common shares outstanding throughout the year C) dividing net income by the number of common shares outstanding.
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21) The debt ratio is an indicator of a company's: A) relationship between current liabilities and current assets B) relationship between debt and interest expense C) relationship between interest expense and income D) percentage of assets financed with debt 22) All of the following ratios directly relate to the analysis of a given stock as.
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11) Hamilton Corporation reports the following data: Net sales$ 370,000 Cost of goods sold250,000 Gross margin$ 120,000 If net sales increases by 15%, and cost of goods sold increases by 20%, gross margin would: A) increase by 4.6% B) decrease by 4.6% C) decrease by 4.4% D) increase by 4.4% 12) Given the following data: Net sales$100,000 Cost of goods sold60,000 Gross.
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13.3   Prepare common-size financial statements 1) Of the items listed below, the one most helpful in the comparison of different size companies is: A) horizontal analysis B) comparison of their net incomes C) preparation of common-size financial statements D) comparison of their working capital balances 2) Common-size financial statements represent a form of: A) ratio analysis B) vertical.
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17) Prepare a vertical analysis for Young's Point Corporation's balance sheet to determine the component percentages of its assets, liabilities, and shareholders' equity. Round percentages to the nearest one-tenth percent. Young's Point Corporation Balance Sheet December 31, 2013 Assets Total current assets$ 320,000 Long-term investments100,000 Property, plant, and equipment, net855,000 Total assets$1,275,000 Liabilities Total current liabilities$210,000 Non-current debt480,000 Total liabilities$690,000 Shareholders' equity Total shareholders'.
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11) Following is a comparative balance sheet for Wildfire Corporation: Wildfire Corporation Comparative Balance Sheet December 31, 2014 and 2013 20142013 Current assets: Cash$ 140,000$ 90,000 Short-term investments90,00080,000 Accounts receivable, net350,000220,000 Inventory500,000430,000 Prepaid expenses30,00030,000 Total current assets$1,110,000$ 850,000 Property, plant, and equipment, net750,000500,000 Other assets280,000300,000 Total assets$2,140,000$1,650,000 Current liabilities: Short-term notes payable$650,000$670,000 Accounts payable200,000225,000 Total current liabilities$850,000$895,000 Non-current debt380,000220,000 Total liabilities$1,230,000$1,115,000 Shareholders' equity: Common shares$500,000$500,000 Retained earnings410,00035,000 Total shareholders' equity$ 910,000$535,000 Total liabilities and shareholders'.
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11) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2014 and 2013: 2014 2013 Cash $ 10,000 $ 15,000 Net accounts receivable 30,000 25,000 Inventory 43,000 40,000 Prepaid expenses 5,000 7,000 Total current assets 88,000 87,000 Total non-current assets 112,000 114,000 Total current liabilities 70,000 60,000 Total non-current liabilities 40,000 45,000 Common shares 60,000 60,000 Retained earnings 30,000 36,000 Net credit sales 370,000 333,000 Cost of goods sold 150,000 160,000 Gross margin 220,000 173,000 Income from.
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10.5   Distinguish between fair value and book value per share 1) For a company that has only common shares outstanding, dividing total shareholders' equity by the number of shares outstanding determines the: A) liquidation value per share B) earnings per share C) market value per share D) book value per share 2) When a company has.
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50) Given the following information for Cat Castle Incorporated prepare their statement of cash flows for December 31, 2014 under ASPE. December 31, 2014. 2014*2013* Cash375250 Accounts receivable8575 Interest receivable56 Inventory8095 Prepaid Expenses4810 Non-current - Note receivable90125 Property, plant and Equipment325330 (net of depreciation) Accounts payable3320 Accrued liabilities4556 Common Shares825755 Retained Earnings10560 Net income50 Depreciation expense2 Gain on sale of property1.5 * in 000s 51) Given the following information for Rat.
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13.2   Perform vertical analysis 1) When performing vertical analysis of an income statement, which of the following is usually used as the base? A) gross sales B) net sales C) net income D) gross margin 2) Expressing gross margin for 2013 as a percentage of net sales in 2013 is an example of: A) vertical analysis B) horizontal.
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11) On January 1, 2013, Assembly System Corporation's Retained Earnings account had a balance of $675,000. During 2013, cash dividends of $25,000 and stock dividends with a market value of $55,000 were declared and distributed. Assembly System Corporation had a net loss of $5,000 in 2013. What is the balance.
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11.1   Evaluate the quality of earnings 1) Which of the following is not an indicator of a high earnings quality? A) Gain on the disposition of a discontinued operation B) Proper revenue and expense recognition C) Improving earnings from operations as a percentage of sales D) Low operating expenses as a percentage of sales 2) Under.
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54) Identify three statement of cash flows user groups and identify what they would be using this statement for. 55) You are reviewing the financial statements of three companies in the same industry. Specifically, you are interested in the transactions surrounding capital assets during the past year. The following information is.
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56) Omemee Company had the following transactions during the year: Net Loss                                  ($36,000) depreciation                                 $28,000 Increase in accounts receivable                   $35,000 Decrease in inventories                         $14,500 Increase in accounts payable                     $34,000 Decrease in income taxes payable                  $6,700 Decrease in wages payable                       $1,800 Proceeds on Sale of Equipment                  $380,000 Repayment of bonds                          $250,000 Issuance of Common shares.                    $100,000 Proceeds on sale of land                       $150,000 Gain on sale of land                           $20,000 Payment of dividends.                         $10,000 Determine the cash flows from operations.
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12.4   Prepare a statement of cash flows by the direct method 1) Which of the following would appear on a direct method statement of cash flows? A) Depreciation Expense B) loss on sale of assets C) increase in Accounts Receivable D) cash payments for inventory 2) Fertilizer Incorporated reports an increase in Accounts Payable of $9,200.
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13.5   Use ratios to make business decisions 1) The acid-test ratio reflects the company's percentage of assets financed with debt. 2) Inventory turnover measures the number of times a company sells its average inventory level during a year. 3) A high current ratio means that a company's current assets represent a relatively large.
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12) Use the following data to prepare a common-size comparative income statement for Old Mill Corporation on December 31, 2014. Round percentages to one-tenth percent. Old Mill Corporation Comparative Income Statement For the Years Ended December 31, 2014 and 2013 20142013 Net sales$1,400,000$1,200,000 Expenses: Cost of goods sold$900,000$780,000 Selling and general expenses250,000220,000 Interest expense55,00052,000 Income tax expense64,00048,000 Total expenses$1,269,000$1,100,000 Net income$131,000$100,000 13) Horizontal.
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12.3   Prepare a statement of cash flows using the indirect method of determining cash flows from operating activities 1) On an indirect method statement of cash flows, the purchase of machinery in exchange for common shares is: A) ignored B) shown in the schedule of noncash investing and financing activities which accompanies the.
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48) The following selected data for the Food Factory Corporation were gathered by the accountants for the year ended December 31, 2013, who are responsible for preparing the financial statements: Cost of goods sold$47,300 depreciation expense14,100 Other operating expenses15,700 Loss on sale of investments1,900 Gain on sale of capital assets6,200 Sales revenue99,700 Interest revenue7,100 Dividend revenue3,200 Salary expense24,700 Interest expense5,200 Income.
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34) Discuss any strengths and/or weaknesses disclosed by the following cash flow statement: Apsley Corporation Cash Flow Statement For the Year Ended December 31, 2014 Operating activities: Income from operations$ 27,500 Add (subtract) non-cash items: Amortization$ 13,400 Net reduction in current assets other than cash5,300 Net reduction in current liabilities(4,900)13,800 Net cash inflow from operating activities$ 41,300 Investing activities: Purchase of equipment$(85,000) Net cash outflow.
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46) The Corn Crop Corporation gathered the following data from its accounting records for the year ended September 30, 2014: Decrease in inventory$ 17,000 Acquisition of building218,500 Issuance of bonds payable525,000 Increase in accounts receivable47,600 Cash sales102,900 Net income195,000 Payment of income taxes27,200 Loss on sale of capital assets7,300 Declaration of stock dividend50,500 Decrease in prepaid expenses8,500 Collection of dividend revenue18,600 Increase.
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21) Land Reclamation Industries began the year with $46,700 in Accounts Receivable and ended the year with $31,900 in Accounts Receivable. If sales for the year were $687,000, the cash collected from customers during the year amounted to: A) $655,100 B) $672,200 C) $701,800 D) $733,700 22) If the cash collections from customers amounted to.
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21) Briefly state the information provided by the following ratios and briefly discuss how they are used in financial analysis: a. price/earnings ratio b. dividend yield 22) What is the basic assertion of the efficient capital market theory? What are the implications of an "efficient market" for: a. managers of companies who want to.
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1) Analyzing the cash flow statement may help analysts determine the financial health of a company. Which of the following signs below is not an indicator of a financially healthy company? A) The company's operations are a major source (not a use) of cash. B)  The company's operations are a major use.
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10.6   Evaluate a company's return on equity using DuPont analysis 1) Which of the following is the best measure as to whether a company is successful in using its assets to earn income for the individuals who finance the business? A) current ratio B) acid-test ratio C) return on equity D) return on assets 2) Return.
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12.2   Explain and classify cash flows from operating, investing, and financing activities 1) The most important section of a statement of cash flows is the: A) operating activities B) investing activities C) financing activities D) all of the sections are equally important 2) Which of the following activities increase and decrease the non-current assets available to.
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11.4   Analyze the statement of comprehensive income and the statement of changes in shareholders' equity 1) A statement of shareholders' equity would not include which type of transaction? A) repurchased shares reacquired by the corporation B) land exchanged for machinery and equipment C) cumulative translation adjustment D) cash dividends declared by the board of directors 2).
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