Financial Accounting: A Bridge to Decision Making 6th Edition

333 Chapter 10--Analysis of Financing Activities True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 1 EASY 6 2 MOD 2 1 MOD 7 6 MOD 3 2 EASY 8 6 EASY 4 2 MOD 9 6 EASY 5 2 MOD 10 7

Analysis of Financing Activities 351 2. Selected financial information for Gutierrez Co. appears below: 2009 2008 2007 Total assets $1,750 $1,875 $1,925 Total liabilities 1,000 1,500 1,700 Net income 300 250 100 Dividends 120 50 10 Required:

369 Chapter 11--Investing Activities True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 1 EASY 6 3 MOD 2 1 EASY 7 5 DIFF 3 2 MOD 8 5 EASY 4 2 EASY 9 6 MOD 5 2 MOD 10 2 EASY

388 Chapter 11 Match each term with the correct definition. a. Deferred taxes b. Equity method c. Capital expenditures d. Operating expenditures e. Prepaid taxes f. Depletion g. Depreciation h. Straight-line method 23. Systematic allocation of the cost of natural resources to the periods that benefit

Analysis of Investing Activities 425 Required: a. Calculate expected net income for 2008. b. Calculate the percent change in net income. Comment on the company's use of operating leverage. ANS: a. Sales ($2,000 x 1.3) $2,600 COGS ($400 x .65 x 1.3 + $400 x .35) (478) Gross

407 Chapter 12--Analysis of Investing Activities True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 1 MOD 6 4 EASY 2 2 EASY 7 4 MOD 3 2 MOD 8 4 EASY 4 4 MOD 9 5 MOD 5 4 EASY 10 6

126 Chapter 3 16. Northeast Publishing recorded the following transactions in spreadsheet format: ASSETS = LIABILITIES + OWNERS' EQUITY Accounts Cash Other Assets Accounts Payable Contributed Capital Retained Earnings a. Cash 48,000 Contributed Capital

Measuring Revenues and Expenses 109 For each of the following items, select the letter of the best answer and write it in the space provided. a. Depreciation expense b. Interest expense c. Unearned revenue d. Accumulated depreciation e. Interest payable f. Retained earnings 11. Obligations arising

143 Chapter 4--Reporting Earnings and Financial Position True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 2 EASY 7 3 EASY 2 2 EASY 8 3 MOD 3 2 EASY 9 3 EASY 4 2 EASY 10 4 EASY 5 2 MOD 11

Reported Earnings and Financial Position 161 You have been asked to inspect the financial statements of the Chopper Builders Company. For each item below, indicate which financial statement you would inspect to determine the information noted. Use the following letters to indicate the individual financial statements. a. Income statement

Reporting Cash Flows 199 6. Answer the questions using the information provided in each of the following independent situations. a. Net cash flow from operations for a period was $15,000. Noncash Revenues for the period were $9,000. Noncash Expenses for the period were $11,000. What was net income for

179 Chapter 5--Reporting Cash Flows True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 1 MOD 6 2 MOD 2 1 MOD 7 2 MOD 3 1 MOD 8 3 EASY 4 1 EASY 9 3 MOD 5 2 EASY 10 3 MOD

219 Chapter 6--Full and Fair Reporting True/ False L.O.s Level of Diffi- culty True/ False L.O.s Level of Diffi- culty True/ False L.O.s Level of Diffi- culty 1 1 EASY 8 5 EASY 15 3 EASY 2 1 EASY 9 5 MOD 16 3 MOD 3 2 MOD 10 5

233 Chapter7--Computerized Accounting Systems True/ False L.O.s Level of Diffi- culty True/ False L.O.s Level of Diffi- culty True/ False L.O.s Level of Diffi- culty 1 1 EASY 20 2 MOD 39 3 DIFF 2 1 EASY 21 2 EASY 40 3 EASY 3 1 EASY 22 2 MOD 41

Computerized Accounting Systems 245 24. The software programs that make it difficult for unauthorized users to gain access to a companys network is called a. firewall software b. application software c. web-browser software d. payroll software ANS: A DIF: Moderate OBJ: 2 TOP: AICPA BB-Technology MSC: AACSB

257 Chapter 8--The Time Value of Money True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 1 MOD 6 2 MOD 2 1 EASY 7 3 MOD 3 1 MOD 8 3 DIFF 4 1 EASY 9 4 MOD 5 2 EASY 10

The Time Value of Money 273 7. ANS: B DIF: Moderate OBJ: 3 TOP: AICPA FN-Measurement MSC: AACSB Analytic 7. ANS: B DIF: Moderate OBJ: 3 TOP: AICPA FN-Measurement MSC: AACSB Analytic 7. ANS: B DIF: Moderate OBJ: 3 TOP: AICPA FN- Measurement MSC: AACSB Analytic

289 Chapter 9--Financing Activities True/ False L.O.s Level of Difficulty True/ False L.O.s Level of Difficulty 1 1 DIFF 6 3 EASY 2 1 MOD 7 3 EASY 3 2 MOD 8 4 MOD 4 2 MOD 9 4 EASY 5 3 EASY 10 5 EASY

Financing Activities 309 PROBLEM 1. Off-Shore Corporation reported the following items in its December 31, 2007, financial statements: Capital lease obligations (10% due in 2008 $ 40,000 Treasury stock 10,000 Preferred stock 150,000 Accounts payable 4,500 Bonds payable (due 2012) 450,000 Contingent liability (reasonably possible to require payment

Financing Activities 321 22. Williams and Tennessee, Inc. had 120,000, $10 par value common shares outstanding at June 30, 2007. On July 15, 2009, the Board of Directors declared and distributed a 4% stock dividend when the common stock was selling at $40 per share. Required: a. Assume