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Learning Objective 15-4 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.
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28) Amber Corporation has provided the following information of its operating activities for 2015: Merchandise Inventory, January 1, 2015 $150,000 Merchandise Inventory, December 31, 2015 75,000 Purchases 854,000 Selling and Administrative Expenses 65,000 Sales Revenue 1,000,000 Required: Prepare Amber's income statement for the year ended December 31, 2015. Use the format provided below: Sales Revenue Cost of Goods Sold     Beginning Inventory     Purchases     Cost.
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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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21) Partial income statements of Company A and Company B are provided below: Which of the following statements is true? A) Company A is a merchandising company. B) Company B is a manufacturing company. C) Company A is a manufacturing company. D) Company A is a service company. 22) Product costs are expensed ________. A) when.
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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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29) Excellent Inc. sells accounting textbooks. The following information summarizes Excellent's operating activities for 2015: Merchandise Inventory, January 1, 2015 $10,000 Merchandise Inventory, December 31, 2015 7,000 Purchases 95,000 Selling and Administrative Expenses 65,000 Sales Revenue 180,000 Required: Prepare Excellent Inc. income statement for the year ended December 31, 2015. 30) Simons Inc. sells plasticware. The following information summarizes Simons' operating activities.
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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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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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11) The income statement of a service company will most likely include ________. A) salary expense B) factory overhead C) cost of goods sold D) direct materials 12) Which of the following is true of service companies? A) All costs of service companies are product costs. B) Service companies modify and resell products they buy from manufacturers. C).
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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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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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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.
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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 16-1 1) Managerial accounting focuses on providing information for internal planning and control. 2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders. 3) The IMA standards of ethical practice require managerial accountants to maintain their professional competence. 4) The accountant for Myra Lido deliberately deferred.
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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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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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20) Data for Nobell Inc. is as follows: 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.) Use a multi-step income statement. .
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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 16-2 1) Product costs, such as direct materials, are expensed in the period they were paid. 2) Unlike merchandising companies, income statements of service companies include cost of goods sold as a line item. 3) Manufacturing businesses have inventory accounts, but merchandising businesses do not. 4) Manufacturing businesses produce their own products,.
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78) Fashion Fiesta Company uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Fashion Fiesta 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) Additional information provided by the company includes the following: During 2014, the company repaid.
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18) Atlantis Inc. has the following data: 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 Perform a vertical analysis of Atlantis's balance sheet for each year. (Round your percentage answers to one decimal.
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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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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 Increase / 20152014(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.
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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'.
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Learning Objective 15-5 1) A corporation's income statement includes some unique items that do not often apply to smaller businesses. 2) The income from continuing operations helps investors make predictions about the company's past performance. 3) The disposal of a financial segment would be reported as discontinued operations. 4) Gains and losses on the.
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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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21) Which of the following is the primary objective of managerial accounting? A) providing information that managers need to make operational decisions B) providing historical data to investors and creditors C) providing summarized results of operations D) providing information to comply with laws and regulations of government bodies 22) Which of the following is the.
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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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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 analysis report Use 2011 as the base year, and round answers to the nearest percent. 22) Donald Corp. reported the following on its comparative income statement: (In millions)201720162015 Revenue$728$675$500 Cost of goods sold312258220 Prepare a horizontal analysis of revenues and cost of goods sold,.
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74) Avatar Auto Parts Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Avatar Company Income Statement Year Ended December 31, 2015 Sales Revenue$360,000 Interest Revenue1,500 Gain on Sale of Plant Assets6,000 Total Revenues and Gains$367,500 Cost of Goods Sold165,000 Salary Expense67,500 Depreciation Expense18,000 Other Operating Expenses34,500 Interest Expense1,500 Income Tax Expense7,500 Total Expenses294,000 Net Income/(loss)$73,500 Additional.
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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 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) Which of the following is an objective of management accounting? A) to generate financial statements of a company for tax reporting B) to provide information to business managers to assist them in controlling their business C) to provide information to shareholders to assist them with their investment decisions D) to ensure that the.
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19) Data for Nobell Inc. is as follows: Nobell Inc. Comparative Balance Sheet December 31, 2015 and 2014 20152014 Assets Current Assets: Cash$121,000$100,000 Accounts Receivables, Net117,000125,000 Merchandise Inventory70,00085,000 Total Assets$308,000$310,000 Liabilities Total Current Liabilities63,50050,000 Long-term Liabilities100,000100,000 Total Liabilities163,500150,000 Stockholders' Equity Retained Earnings94,500110,000 Common Stockholders' Equity50,00050,000 Total Liabilities and Stockholders' Equity$308,000$310,000 Prepare a horizontal analysis of the comparative balance sheet of Nobell Inc. Round percentage changes to one decimal place. .
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17) Data for Atlantis Inc. follow: Atlantis Inc. Comparative Income Statement Years Ended Dec 31, 2015 and 2014 20152014 Net Sales Revenue$550,000$500,000 Expenses: Cost of Goods Sold245,000220,000 Selling and Administrative Expenses100,00096,000 Other Expenses(Interest Expense)12,0009,000 Income Tax Expense58,00047,000 Total Expenses$415,000$372,000 Net Income$135,000$128,000 Prepare a horizontal analysis of the comparative income statement of Atlantis Inc. (Round percentage changes to one decimal place.) Use a multi-step.
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75) Starfire Telescopes 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.
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31) Best Inc., a merchandiser, sells office supplies. The following information summarizes Best's operating activities during 2015: Utilities Expense $6,000 Rent for Store Expense 8,000 Sales Commissions Expense 4,500 Purchases of Merchandise 54,000 Inventory on January 1, 2015 30,000 Inventory on December 31, 2015 20,500 Sales Revenue 108,000 Required: Prepare an income statement for Best Inc. for the year ended December 31, 2015, using the.
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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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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).
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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.
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Learning Objective 15-3 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).
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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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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.
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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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8) Barkin 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$12,000Extraordinary Loss15,000 Loss on disposal of Equipment5,000Cost of Goods Sold285,000 Net Sales650,000Operating Expenses120,000 The income tax rate for the company is 45%. Prepare.
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19) Prepare a comparative common-size income statement for Nobell Inc. using the 2015 and 2014 data. (Round off the percentages to one decimal place.) Nobell Inc. Comparative Income Statement Years Ended December 31, 2015 and 2014 20152014 Net Sales$ 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.
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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.
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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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