Given below is a list of items that may be reported on a statement of cash flows.
Identify each as one of the following using the indirect method :
a. Operating
b. Investing
c. Financing
d. Not separately reported on a statement of cash flows
Proceeds from the sale of a building
Use the following information that was obtained from the 2016 and 2015 financial
statements of Lake Company, River Corporation, and Ocean Company to answer the
questions that follow.
REQUIRED:
Compare the three companies and answer the following: A) Compute the number of
days’ sales in inventory for each company for 2016. B) Which company appears to have
the best liquidity position based solely on the inventory analysis? Explain. C) What
information is provided to users with your calculations in part A?
How are purchase discounts and purchase returns recorded by a company using the
periodic inventory system?
a. As a direct reduction to the Purchases account
b. In contra accounts to the Purchases account
c. As operating expenses
d. As miscellaneous expenses
Which of the following ratios is the best measure in analyzing a company’s ability to
pay interest on long-term debt and to repay the long-term debt over several years?
a. Debt-to-equity ratio
b. Times interest earned ratio
c. Debt service coverage ratio
d. Acid-test ratio
Which of the following is not an operating activity?
a. Cash collections from credit customers.
b. Cash payments for operating expenses.
c. Cash receipts for interest earned.
d. Cash payments for dividends to stockholders.
Cuero Co. reported a net loss of $30,000 for 2015, yet its cash balance increased during
the year. Which financial statement should Cuero’s management refer to for an
explanation of this situation?
a. Balance sheet
b. Income statement
c. Statement of Retained Earnings
d. Statement of Cash Flows
Identify where each of the following accounts would be reported on CocaÂCola’s
financial statements.
a. Balance Sheet-Property, Plant, and Equipment
b. Balance Sheet-Intangible Assets
c. Balance Sheet-Current Assets
d. Balance Sheet-Other Assets
e. Income Statement-Operating Section
f. Income Statement-Other Revenue and Expense Section
g. Statement of Cash Flows
Goodwill
A trial balance is a(an)
a. optional financial statement used only by accountants.
b. device used to prove the equality of debits and credits in the general ledger.
c. list of accounts and their balances taken from the chart of accounts.
d. financial statement which can be used in place of a balance sheet.
Roehr Corporation issues 20,000 shares of $0.50 par common stock for $6 per share;
the Additional Paid-in Capital-Common account will increase by
a. $ 10,000.
b. $110,000.
c. $120,000.
d. $130,000.
Which of the following accounts is increased by a credit entry?
a. Sales Revenue
b. Salary Expense
c. Accounts Receivable
d. Dividends
Distinguish between tangible and intangible operating assets.
Cooking Corner Cooking Corner reported inventory on its balance sheet at December
31, 2013 at $32,000. During 2014, Cooking Corner purchased goods totaling $634,000
on account with terms of 2/10, n/30, FOB shipping point. Total charges paid by
Cooking Corner directly to the freight company were $1,000. At the end of 2014,
inventory on hand totaled to $45,000. Net sales for 2014 totaled $1,300,000. Cooking
Corner employs a periodic inventory system.
Refer to the information about Cooking Corner. How much is cost of goods available
for sale for 2014 assuming Cooking Corner takes advantage of one-half of the cash
discounts?
On the statement of cash flows, thesection involves the acquisition and sale of
long-term assets.
On March 1, 2015, Farmer Co. issued at a price of 100 $20 million of 8%, 25-year
bonds payable. Interest is payable semiannually each March 1 and September 1.
REQUIRED: Present the adjusting entry necessary at December 31, 2015, regarding
this bond issue.
The following items are available from the records of Ramos Corporation at the end of
its fiscal year, June 30, 2014:
Required
(1) Prepare a balance sheet.
(2) For each non-balance-sheet item, indicate where it should appear.
The normal balance of revenue is a(n).
Prepare the journal entry to record each of the following independent transactions. (Use
the number of the transaction in place of a date for identification purposes.)
1> Services provided for cash of $7,050.
2> Purchase of equipment for cash of $2,240.
3> Services provided on account of $530.
4> Purchases of supplies on account for $365.
