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52.Which of the following is notone 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 the following can be found on the statement of cash flows? a.cash flows from operating activities b.total assets c.total changes in stockholders' equity d.changes in retained earnings 54.On the statement of cash.
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Identify the section of the statement of cash flows (a-d) where each of the following items would bereported.                     Operating activities                     Financing activities                     Investing activities                     Schedule of noncash financing and investing 181.        Increase in income taxes payable 182.        Dividends received on investment 183.        Sale of machinery held for use by the company 184.        Issuance of.
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31.The declaration and issuance of a stock dividend would be reported on the statement of cash flows. a.True b.False 32.If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows fromfinancing activities section of the statement of cash flows. a.True b.False 33.If $475,000 of bonds payable.
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72.Financing activities include a.lending money b.acquiring investments c.issuing debt d.acquiring long-lived assets 73.Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirectmethod in a.the cash flows from financing activities section b.the cash flows from investing activities section c.a separate schedule d.the cash flows from operating activities section 74.Which of the following should be.
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11.Cash flows from investing activities, as part of the statement of cash flows, would include any receipts from theissuance of bonds payable. a.True b.False 12.There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) thedirect method and (2) the indirect method. a.True b.False 13.The direct method of preparing.
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109.The particular analytical measures chosen to analyze a company may be influenced by all of the following except a.industry type b.capital structure c.diversity of business operations d.product quality or service effectiveness 110.Which of the following is nota characteristic evaluated in ratio analysis? a.liquidity b.profitability c.solvency d.marketability 111.Short-term creditors are typically most interested in analyzing a company's a.marketability b.profitability c.operating results d.solvency 112.A common measure of.
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129.  Indicate whether each of the following would be added to or deducted from net income in determining net cashflow 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.
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102.Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of theyear, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect ofother adjustments, the net cash flows from operating activities to be reported on the statement of.
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1.Comparable financial statements are designed to compare the financial statements of two or more corporations. a.True b.False 2.In horizontal analysis, the current year is the base year. a.True b.False 3.On a common-sized income statement, all items are stated as a percent of total assets or equities at year-end. a.True b.False 4.The analysis of increases and decreases in the amount.
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51.A clean audit opinion is the same as a qualified audit opinion. a.True b.False 52.Unusual items affecting the current period’s income statement consist of changes in accounting principles anddiscontinued operations. a.True b.False 53.When a corporation discontinues a segment of its operations at a loss, the loss should be reported as a separateitem after income from continuing.
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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. a.True b.False 42.Comparing dividends per share to earnings per share indicates the extent to which the corporation is retaining itsearnings for use in operations. a.True b.False 43.When you are interpreting financial ratios, it is useful.
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139.  The comparative balance sheet of Barry Company for Years 1 and 2 ended December 31 appears below incondensed form: Year 2 Year 1 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 — 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,.
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62.The last item on the statement of cash flows prior to the schedule of noncash investing and financing activitiesreports a.the increase or decrease in cash b.cash at the end of the year c.net cash flow from investing activities d.net cash flow from financing activities 63.Which of the following is a noncash investing and financing activity? a.payment.
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139.  The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31appears below in condensed form: Cash Year 2 $  45,000 Year 1 $ 53,500 Accounts receivable (net) 51,300 58,000 Inventories 147,200 135,000 Investments 0 60,000 Equipment 493,000 375,000 Accumulated depreciation—equipment (113,700) (128,000) $622,800 $553,500 Accounts payable $61,500 $42,600 Bonds payable, due Year 4 0 100,000 Common stock, $10 par 250,000 200,000 50,000 160,900 $553,500 $623,000 348,500 $274,500 100,000 $174,500 Paid­in capital in excess of par—common stock 75,000 Retained earnings 236,300 $622,800 The income statement for.
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139.  Selected data for the current year ended December 31 are as follows: Balance Balance December 31 January 1 Accrued expenses (operating expenses) $29,500 $ 22,000 Accounts payable (merchandise creditors) 90,000 135,000 Inventories 42,500 68,000 Prepaid expenses 23,000 20,000 During the current year, the cost of merchandise sold was $620,000 and the operating expenses other thandepreciation were $142,000.  The direct method is used for presenting the cash.
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139.  On the basis of the following data for Garrett Co. for Years 1 and 2 ended December 31, prepare a statement ofcash flows using the indirect method of reporting cash flows from operating activities.  Assume that equipmentcosting $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation.
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41.Cash inflows and outflows are notnetted in the investing or financing sections of the statement of cash flows butare separately disclosed to give the reader full information. a.True b.False 42.There is no difference in the investing and financing sections of the statement of cash flows using the indirect anddirect method. a.True b.False 43.Under the direct method.
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1.The statement of cash flows is notone of the basic financial statements. a.True b.False 2.Cash, as the term is used for the statement of cash flows, could indicate either cash or cash equivalents. a.True b.False 3.The statement of cash flows is an optional financial statement. a.True b.False 4.The statement of cash flows shows the effects on cash of a.
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129.  The net income reported on the income statement for the current year was $210,000.  Depreciation recorded onequipment and a building amount to $62,500 for the year.  Balances of the current asset and current liabilitiesaccounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $.
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Indicate the section (operating activities, investing activities, financing activities, or none) in which each of thefollowing would be reported on the statement of cash flows prepared by the indirect method: (a)          gain on sale of fixed assets (b)         net income (c)          retirement of long-term debt (d)         sale of capital stock (e)          distribution of stock dividends (f)         .
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122.Income tax was $175,000 for the year.  Income tax payable was $30,000 and $40,000 at the beginning and end ofthe year, respectively.  Cash payments for income tax reported on the statement of cash flows using the directmethod is a. $175,000 b. $165,000 c. $205,000 d. $215,000 123.Free cash flow is a.all cash in the bank b.cash from.
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21.In preparing the statement of cash flows, the correct order of reporting cash activities is financing, operating, andinvesting. a.True b.False 22.A cash flow per share amount should be reported on the statement of cash flows. a.True b.False 23.When using the spreadsheet (work sheet) method to analyzing noncash accounts, no order of analysis is required,but it is.
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112.Net income for the year was $45,500. Accounts receivable increased $5,500, and account payable increased by$11,200. Under the indirect method, the cash flow from operations is a. $51,200 b. $45,500 c. $62,200 d. $28,800 113.Rogers Company reported net income of $35,000 for the year.  During the year, accounts receivable increased by$7,000, accounts payable decreased by.
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Chapter 15:  Investments and Fair Value Accounting Match each of the definitions that follow with the appropriate investment term (a–j). equity method parent company subsidiary company consolidated financial statements fair value unrealized gain or loss on investments. valuation allowance for investments dividend yield amortized cost cost method 114.  a corporation owning all or the majority of the voting stock of another corporation 115. .
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139.  Kennedy, Inc. reported the following data: Net income $118,000 Depreciation expense 15,000 Loss on disposal of equipment (10,000) Gain on sale of building 20,000 Increase in accounts receivable 7,000 Decrease in accounts payable (2,000) Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. 140.  Lamar Corporation purchased land for $150,000.  Later in the year,.
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139.  The Dickinson Company reported net income of $155,000 for the current year. Depreciation recorded on buildingsand equipment amounted to $65,000 for the year.  In addition, a building with an original cost of $250,000 andaccumulated depreciation of $190,000 on the date of the sale, was sold for $75,000.  Balances of.
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For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method.  Choices may be selected as theanswer for more than one question. a.                        increase cash from operating activities b.                       decrease cash from operating activities c.                       .
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139.  Sales reported on the income statement were $690,000.  The accounts receivable balance declined $39,000 overthe year.  Determine the amount of cash received from customers. 140.  Selected data taken from the accounting records of Laser Inc. for the current year ended December 31 are asfollows: Balance,December 31 Balance,January 1 Accrued operating expenses $ 5,590 $ 6,110 Accounts.
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139.  On the basis of the details of the common stock account presented below, calculate the total amount to be recordedin financing section of the statement of cash flows. Assume any stock issues were at par. Indicate whether the amount results in an increase or decrease in cash. Common Stock, $10 Par Balance Date Item Debit Credit Debit Credit Jan..
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82.The following information is available from the current period financial statements: Net income$175,000 Depreciation expense28,000 Increase in accounts receivable16,000 Decrease in accounts payable21,000 The net cash flow from operating activities using the indirect method is a. $166,000 b. $184,000 c. $110,000 d. $240,000 83.On the statement of cash flows, the cash flows from investing activities section would include a.receipts from the.
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59.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 60.Which of the following is the most useful in analyzing companies of different sizes? a.comparative statements b.common-sized financial statements c.price-level accounting d.audit report 61.The percent of fixed assets to total assets is an example of a.vertical analysis b.solvency.
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129.  Identify which section the statement of cash flows (using the indirect method) would present information regardingthe following activities. (Use O for operating, I for investing, or F for financing). Issued common stock Redeemed bonds Issued preferred stock Purchased patents Net income Paid cash dividends Purchased treasury stock Sold long-term investment Sold equipment Purchased buildings Issued bonds 130.  For each of the.
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139.        Samuel Company’s accumulated depreciation—equipment increased by $6,000, while patents decreased by $2,200between balance sheet dates.  There were no purchases or sales of depreciable or intangible assets during theyear.  In addition, the income statement showed a loss of $3,200 from the sale of investments. Assume no changesin noncash current assets.
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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. a.True b.False 32.A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety forcreditors. a.True b.False 33.In computing the ratio of sales to assets, long-term investments are excluded from average total.
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139.  Complete each of the columns on the table below, indicating in which section each item would be reported on thestatement of cash flows (operating, investing, or financing), the amount that would be reported, and whether theitem would create an increase or decrease in cash. For item that affect more.
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92.Cash dividends of $45,000 were declared during the year.  Cash dividends payable were $10,000 at the beginning ofthe year and $15,000 at the end of the year.  The amount of cash for the payment of dividends during the year is a. $50,000 b. $40,000 c. $55,000 d. $35,000 93.On the statement of cash flows, a.
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21.A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000; and inventories,$222,500. Current liabilities are $225,000.  The current ratio is 2.5. a.True b.False 22.If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratioto decrease. a.True b.False 23.If a firm has a quick.
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99.Based on the above data, what is the quick ratio, rounded to one decimal point? a. 1.7 b. 2.9 c. 1.1 d. 1.0 100.The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on totalassets is a.leverage b.solvency c.yield d.quick assets The balance sheets at the end of each of the first two years.
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129.  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.     ____received dividends    ____paid of dividends     ____purchased of equipment    ____net income     ____issued company’s common stock     ____amortization expense 130.  Each of the.
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11.Using vertical analysis of the income statement, a company's net income as a percentage of sales is 15%;therefore, the cost of goods sold as a percentage of sales must be 85%. a.True b.False 12.In the vertical analysis of an income statement, each item is generally stated as a percentage of total assets. a.True b.False 13.Factors that.
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139.  Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: End Beginning Cash $ 67,000 $73,000 Accounts receivable (net) 73,000 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.
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129.  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. _____purchased buildings _____sold patents _____net income _____issued common stock _____paid cash dividends _____depreciation expense 130.  State the section(s) of the.
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79.Based on the above data, what is the amount of working capital? a. $238,000 b. $128,000 c. $168,000 d. $203,000 80.Based on the above data, what is the quick ratio, rounded to one decimal point? a. 2.7 b. 2.6 c. 1.7 d. 0.9 81.A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term.
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139.  The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below incondensed form: Cash Year 2 $ 53,000 Year 1 $ 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 Year 2 — 100,000 Common stock, $10 par 325,000 285,000 Paid­in 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.
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89.Based on the following data for the current year, what is the number of days' sales in inventory? Sales on account during year$1,204,500 Cost of merchandise sold during year657,000 Accounts receivable, beginning of year75,000 Accounts receivable, end of year85,000 Inventory, beginning of year85,600 Inventory, end of year a. 51.298,600 b. 44.4 c. 6.5 d. 7.5 90.Which of the following ratios provides.
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69.Horizontal analysis is a technique for evaluating financial statement data a.for one period of time b.over a period of time c.on a certain date d.as it may appear in the future 70.Horizontal analysis of comparative financial statements includes a.development of common-sized statements b.calculation of liquidity ratios c.calculation of dollar amount changes and percentage changes from the previous to.
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139.  The board of directors of Kendall Co. declared cash dividends totaling $390,000 during the current year.  Thecomparative balance sheet indicates dividends payable of $58,000 at the beginning of the year and $73,000 at theend of the year.  What was the amount of cash payments Kendall Co. made to stockholders.
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