Below are the transactions for the Louisville Company:
Based on these transactions, what is the net cash flow from financing activities?
a. $285,000 net cash provided by financing activities.
b. $275,000 net cash used for financing activities.
c. $0, because cash inflows equal cash outflows from financing activities.
d. $440,000 net cash provided by financing activities.
The amount in the Subscriptions Sold in Advance account should be carried over from
the adjusted trial balance of the 10-column work sheet to which of the following
columns?
a. Income statement as a debit
b. Income statement as a credit
c. Balance sheet as a debit
d. Balance sheet as a credit
Which of the following statements is false?
a. Cash equivalents are included in cash on the balance sheet and on the statement of
cash flows.
b. Investments in cash equivalents and investments in stock have the same economic
effect–assets increase and decrease by the same amount.
c. An investment is a cash equivalent if it is convertible into a known amount of cash
and has an original maturity of 3 months or less when purchased.
d. Investments in stock are reported as a financing activity on the statement of cash
flows.
Madden Company applies the consistency convention. What does this mean?
a. Madden Co. uses the same names for all its expenses as its competitors.
b. Madden Co. has selected certain accounting principles that can never be changed.
c. Madden Co. applies the same accounting principles each accounting period.
d. Madden Co. applies the same accounting principles as it competitors.
The following is from Goldman Inc.’s 2015 income statement.
How much will Goldman report as cost of goods purchased in its 2015 income
statement?
a. $184,600
b. $193,000
c. $201,400
d. $211,100
Espat Corp. reported net sales (all on credit) of $1,600,000 and cost of goods sold of
$1,100,000 for 2015. Its beginning balance of Accounts Receivable was $150,000. The
accounts receivable balance decreased by $10,000 during 2015. Rounded to two
decimal places, what is Espat’s accounts receivable turnover rate for 2015?
a. 7.59
b. 10.32
c. 10.67
d. 11.03
St. Petersburg Corporation Use the information obtained from the comparative financial
statements included in the St. Petersburg Corporation’s 2016 annual report that is
presented below to answer the questions that follow. All amounts are in thousands of
dollars.
Refer to the financial information for St. Petersburg Corporation. REQUIRED: (A)
Calculate the return on assets ratio for St. Petersburg for 2016. What is the reason for
the adjustment of interest? (B) Calculate the return on common stockholders’ equity
ratio for 2016 for St. Petersburg. What is the reason for the adjustment of preferred
dividends?
Various organizations publish summaries of selected ratios organized by industry for a
sample of U.S. companies.
a. True
b. False
When using the indirect method, how is the purchase of equipment for cash shown on
the statement of cash flows?
a. Operating activity
b. Investing activity
c. Financing activity
d. Noncash investing and financing activity
The following information was presented in the balance sheet of Gloria Company as of
December 31, 2014: Trade accounts receivable, net of allowance for uncollectibles of
$100,000 $1,600,000 Which one of the following statements is true?
a. Gloria expects that $1,700,000 of accounts receivable will be collected after year end.
b. The balance in the Accounts Receivable account in Gloria’s general ledger is
$1,600,000.
c. The net realizable value of Gloria’s accounts receivable is $1,600,000.
d. Gloria expects to collect only $1,500,000 from its customers.
Anole Company Anole Company was incorporated as a new business on January 1,
2015. The company is authorized to issue 20,000 shares of $5 par value common stock
and 10,000 shares of 6%, $10 par value, cumulative, participating preferred stock. On
January 1, 2015, the company issued 8,000 shares of common stock for $15 per share
and 2,000 shares of preferred stock for $30 per share. Net income for the year ended
December 31, 2015, was $375,000. Refer to the information about Anole Company.
The amount of Anole’s total contributed capital at December 31, 2015, is
a. $ 60,000.
b. $120,000.
c. $180,000.
d. $555,000.
Park, Inc. purchased merchandise from Jay Zee Music Company on June 5, 2015. The
goods were shipped the same day. The merchandise’s selling price was $15,000. The
credit terms were 1/10, n/30. The shipping terms were FOB shipping point. Park
received the merchandise on June 10, 2015. Park paid the amount due on June 13, 2015.
Who is responsible for payment of the transportation costs on the merchandise sold by
Jay Zee Music to Park?
a. Jay Zee Music Company
b. Park, Inc.
c. Split equally between the two companies
d. Cannot be determined from the information provided
Which of the following statements is false with respect to bonds?
a. Firms issue bonds in very large single issues.
b. Bonds must be held until maturity by the initial investor.
c. The denomination of the bond is usually referred to as the face value.
d. Bonds that are not backed by specific collateral of the issuing company are known as
debenture bonds.
Match the following choices to the listed situation.
a. a deferred expense
b. a deferred revenue
c. an accrued liability
d. an accrued asset
The cost of salaries earned by employees, but not paid at the end of the accounting
period is recorded
At the end of 2015, the unadjusted accounting records for Coney Corporation contain
the following selected accounts and balances.
A) Coney has not paid its employees for the final 3 days in 2015. The amount owed is
$700. How much wage and salary expense should Bacon report for its year ending
December 31, 2015? B) What adjustments would you expect Coney to make at year end
that would result in additional revenue as a result of the accounts listed?
Indicate the type of each ratio listed below.
a. liquidity ratio
b. solvency ratio
c. profitability ratio
Earnings per share
Liquidity analysis is required
a. in order to evaluate the profitability over past accounting periods.
b. to assess the nearness to cash of a company’s assets and liabilities.
c. to be reported in the financial statements for all companies publicly traded.
d. when a company reports nonrecurring items in its financial statements.
Indicate the type of each ratio listed below.
a. liquidity ratio
b. solvency ratio
c. profitability ratio
Current ratio