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91.Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis? A.ratio of fixed assets to long-term liabilities B.ratio of net sales to assets C.number.
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111.If accounts payable have increased during a period A.revenues on an accrual basis are less than revenues on a cash basis. B.expenses on an accrual basis are less than expenses on a cash basis. C.expenses on an accrual basis are the same as expenses on a cash basis. D.expenses on an accrual basis are.
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91.Equipment with an original cost of $60,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would A.increase by $33,000 B.decrease by $7,000 C.increase by $40,000 D.decrease by $27,000 92.On the statement of cash flows, the cash flows from financing activities section would include.
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31.The ratio of fixed assets to long-term liabilities provides a measure of a firm’s ability to pay dividends. 32.A decrease in the ratio of liabilities stockholders' equity indicates an improvement in the margin of safety for creditors. 33.In computing the ratio of net sales to assets, long-term investments are excluded from average.
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11.Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable. 12.There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method. 13.The direct method of preparing.
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154.The Dickinson Company reported net income of $155,000 for the current year. Depreciation recorded on buildings and equipment amounted to $65,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $20,000 $15,000 Accounts receivable 19,000 32,000 Inventories 50,000 65,000 Accounts payable 12,000 18,000 Instructions Prepare.
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157.Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: End Beginning Cash $62,000 $73,000 Accounts receivable (net) 75,000 60,000 Inventories 54,000 47,000 Accounts payable (merchandise creditors) 43,000 37,000 Salaries payable 2,800 3,800 Sales (on account) 210,000 Cost of merchandise sold 70,000 Operating expenses other than depreciation 67,000 Use the direct method to prepare the cash flows from operating activities section of a statement.
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138.Following is data for the available-for-sale securities held by AdBrand Company as of December 31, 2012. Name Number of Shares Cost per Share Fair Value per Share Total Cost Total Fair Value Capstone, Inc. 1,200 $15.00 $15.40 Dayton Corp. 800 8.00 8.25 Huddle Company 700 14.10 13.00 Stanton Company 600 12.35 10.77 Total Required: (1) Complete the table above to find the total cost and fair value for the company’s trading securities portfolio. (2) Calculate.
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111.Which one of the following is not a characteristic generally evaluated in ratio analysis? A.liquidity B.profitability C.solvency D.marketability 112.Short-term creditors are typically most interested in assessing A.marketability. B.profitability. C.operating results. D.solvency. 113.A common measure of liquidity is A.ratio of net sales to assets. B.dividends per share of common stock. C.receivable turnover. D.profit margin. 114.In 2012 Robert Corporation had net income of $250,000 and paid dividends.
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61.The relationship of $275,000 to $125,000, expressed as a ratio, is A.2.0 to 1 B.2.2 to 1 C.2.5 to 1 D.0.45 to 1 62.The percentage analysis of increases and decreases in individual items in comparative financial statements is called A.vertical analysis B.solvency analysis C.profitability analysis D.horizontal analysis 63.Which of the following below generally is the most useful in.
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135.Discuss the appropriate financial treatment when an investor has a greater than 50% ownership in another company. 136.Discuss the similarities and differences in reporting trading securities, available-for-sale securities and held-to-maturity securities. 137.The cost and fair value of the trading securities held by AdBrand Company as of December 31, 2012 are as follows: Name Number.
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136.Identify which section the statement of cash flows (using the indirect method) would present information regarding the following activities: (Use O for operating, I for investing, or F for financing): a. Issued common stock b. Redeemed bonds c. Issued preferred stock d. Purchased patents e. Net income f. Paid cash dividends g. Purchased treasury stock h. Sold long-term.
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143.Master Designs Company has cash flows for operating activities of $300,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this investment was used to replace existing capacity. What is the free cash flow for Master Designs? 144.Indicate the section (operating activities, investing activities, financing.
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141.The Cash and Accounts Receivable for a company are provided below: 2012 2011 Cash $75,000 $50,000 Accounts receivable (net) $76,800 $80,000 Based on this information, what is the amount and percentage of increase or decrease that would be shown in a balance sheet with horizontal analysis? 142.The Cash and Accounts Receivable for a company are provided below: 2012 2011 Cash $62,400 $60,000 Accounts receivable (net) $44,000 $50,000 Based on.
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149.The board of directors declared cash dividends totaling $242,000 during the current year. The comparative balance sheet indicates dividends payable of $48,000 at the beginning of the year and $63,000 at the end of the year. What was the amount of cash payments to stockholders during the year? 150.An analysis of.
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132.Sales reported on the income statement were $340,000. The accounts receivable balance declined $17,000 over the year. Determine the amount of cash received from customers. 133.Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $5,000, and the inventory balance increased by $11,000 over the.
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21.A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000 and $222,500 of inventories. Current liabilities are $225,000. The current ratio is 2.5 to 1. 22.If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease. 23.If.
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51.A clean audit opinion is the same as a qualified audit opinion. 52.Unusual items affecting the current period’s income statement consist of changes in accounting principles and discontinued operations. 53.When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separate item after income.
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146.Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: (a) Increase in prepaid expenses (b) Amortization of patents (c) Increase in salaries payable (d) Gain on sale of fixed assets (e) Decrease in accounts receivable (f) Increase in notes receivable due in 60.
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128.Durrand Corporation’s accumulated depreciation increased by $12,000, while patents decreased by $2,200 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $2,500 from sale of land. Reconcile a net income of.
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153.The comparative balance sheet of Barry Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form: Year Year 2011 2010 Cash $72,000 $42,500 Accounts receivable (net) 61,000 70,200 Inventories 121,000 105,000 Investments ..... 100,000 Equipment 515,000 425,000 Accumulated depreciation-equipment (153,000) (175,000) $616,000 $567,700 Accounts payable $59,750 $47,250 Bonds payable, due 2011 ..... 75,000 Common stock, $20 par 375,000 325,000 Premium on common stock 50,000 25,000 Retained earnings 131,250 95,450 $616,000 $567,700 Additional data for the current year are as follows: (a) Net income, $75,800. (b) Depreciation reported on income.
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161.Based on the following, what is free cash flow? Cash from Operations $155,000 Cash from Investing $(30,000) Cash from Financing $30,000 Operations includes $2,000 for depreciation. Investing includes the purchase of a replacement asset for $100,000 and the sale of the one used in production, which is now obsolete, for $70,000. Financing is made up of $70,000.
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71.The order of presentation of activities on the statement of cash flows is A.operating, investing, and financing. B.operating, financing, and investing. C.financing, operating, and investing. D.financing, investing, and operating. 72.Financing activities include A.lending money. B.acquiring investments. C.issuing debt. D.acquiring long-lived assets. 73.Investing activities include A.collecting cash on loans made. B.obtaining cash from creditors. C.obtaining capital from owners. D.repaying money previously borrowed. 74.Cash receipts from interest.
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130.Journalize the entries to record the following selected transactions of Oliver Co.: (a) Purchased $100,000 of Kruse Co. 8% bonds at par value plus accrued interest of $2,000. (b) Received first semiannual interest payment. (c) Sold the bonds at 97 plus accrued interest of $1,500. 131.Albright Company purchased as a long-term investment $500,000 of Benton Corporation 10-year,.
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138.Selected data taken from the accounting records of Laser Inc. for the current year ended December 31, are as follows: Balance, December 31 Balance, January 1 Accrued operating expenses $5,590 $6,110 Accounts payable (merchandise creditors) 41,730 46,020 Inventories 77,350 84,110 Prepaid expenses 3,250 3,900 During the current year, the cost of merchandise sold was $448,500, and the operating expenses other than depreciation were $78,000..
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41.Cash inflows and outflows are not netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information. 42.There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method. 43.Under.
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51.Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends. 52.Which of the following is not one of the four basic financial statements? A.balance sheet B.statement of cash flows C.statement of changes in financial position D.income statement 53.Which of.
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152.The comparative balance sheet of Posner Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form: Year Year 2011 2010 Cash $53,000 $50,000 Accounts receivable (net) 37,000 48,000 Inventories 108,500 100,000 Investments ..... 70,000 Equipment 573,200 450,000 Accumulated depreciation-equipment (142,000) (176,000) $629,700 $542,000 Accounts payable $62,500 $43,800 Bonds payable, due 2011 ..... 100,000 Common stock, $10 par 325,000 285,000 Paid-in capital in excess of par-- common stock 80,000 55,000 Retained earnings 162,200 58,200 $629,700 $542,000 The income statement for the current year is as.
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81. Accounts payable $30,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 20,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 Based on the above data, what is the quick ratio, rounded to one decimal point? A.2.4 B.3.4 C.2.1 D.1.5 82.A company with working capital of $500,000 and a current ratio of 2.5 pays a $85,000 short-term liability. The amount of working capital.
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61.A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under A.investing activities B.financing activities C.noncash investing and financing activities D.operating activities 62.Cash paid for preferred stock dividends should be shown on the statement of cash flows under A.investing activities B.financing activities C.noncash investing and.
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140.Newville Corporation reported net income of $50,000 in 2012. They have 10,000 shares of $100 par, 6% preferred stock and 50,000 shares of $2 common stock outstanding. During 2012 Newville paid the preferred stockholder’s a $6 per share dividend and also paid $20,000 to common shareholders. The market value of.
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71.In a common size balance sheet, the 100% figure is: A.total property, plant and equipment. B.total current assets. C.total liabilities. D.total assets. 72.In a common size income statement, the 100% figure is: A.net cost of goods sold. B.net income. C.gross profit. D.net sales. 73.Horizontal analysis is a technique for evaluating financial statement data A.for one period of time. B.over a period.
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124.For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method. a. Receipt of dividends b. Payment of dividends c. Purchase of equipment d. Net income e. Issuance of the company’s common stock f. Amortization expense 125.For each of the following, identify whether.
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1.Comparable financial statements are designed to compare the financial statements of two or more corporations. 2.In horizontal analysis, the current year is the base year. 3.On a common-sized income statement, all items are stated as a percent of total assets or equities at year-end. 4.The percentage analysis of increases and decreases in corresponding.
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101.The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is sometimes referred to as A.leverage B.solvency C.yield D.quick assets 102.The balance sheets at the end of each of the first two years of operations indicate the following: 2012 2011 Total current assets $600,000 $560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total.
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133.Prepare the journal entries for the following transactions for Morgan Co. (a) Morgan Co. purchased 23,000 shares of the total of 100,000 outstanding shares of Gordon Corp. stock for $10 per share plus a $400 commission. (b) Gordon Corp.'s total earnings for the period are $80,000. (c) Gordon Corp. paid a total of $45,000 in cash.
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121.The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $ 40,000 Accounts receivable (net) 25,000 Inventory 20,000 Property, plant and equipment 210,000 Total assets $295,000 Liabilities and Stockholders’ Equity Current liabilities 60,000 Long-term liabilities 85,000 Stockholders’ equity-common 150,000 Total liabilities.
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41.The dividend yield rate is equal to the dividends per share divided by the par value per share of common stock. 42.Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining its earnings for use in operations. 43.When you are interpreting financial ratios, it is.
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101.Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? A.depreciation expense B.an increase in inventory C.a gain on the sale of equipment D.dividends declared and paid 102.The net income reported on the income statement for the current year was $250,000. Depreciation recorded.
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140.The income statement disclosed the following items for 2011: Depreciation expense $36,000 Gain on disposal of equipment 21,000 Net income 317,500 Balances of the current assets and current liabilities accounts changed between December 31, 2010 and December 31, 2011, as follows: Increase in accounts receivable $5,600 Decrease in inventory 3,200 Decrease in prepaid insurance 1,200 Decrease in account payable 3,800 Increase in income taxes payable 1,200 Increase in.
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159.The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: (a) If sales for the current year were $475,000 and accounts receivable increased by $39,000 during the year, what was the amount of cash received from customers? (b) If income tax for.
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