1) The Shoe Exchange issues 5,000 shares of its $1 par value common stock to provide
funds for further expansion. If the issue price is $15 per share, what is the entry to
record the issuance of the stock?
2) For each of the following five transactions, indicate by letter whether the cash effect
of each transaction is reported in a statement of cash flows as an operating (O),
investing (I), financing (F), or noncash (NC) activity.
3) Classify each of the following accounting practices as conservative or aggressive:
1> Increase the allowance for uncollectible accounts.
2> When costs are rising, change from FIFO to LIFO.
3> Increase the estimated useful life of equipment.
4) Perform a horizontal analysis on the following information providing both the dollar
amount and percentage change:
5) A company begins the year with inventory of $50,000 and ends the year with
inventory of $55,000. During the year, the following amounts are recorded:
Calculate cost of goods sold for the year.
6) How is the receivables turnover ratio measured? What does this ratio indicate? Is a
higher or lower receivables turnover preferable?
7) The December 31, 2015, post-closing trial balance for Strong Corporation is
presented below:
Prepare a classified balance sheet for Strong Corporation at December 31, 2015 .
