A company uses the direct method to prepare the statement of cash flows. It presents
the following amounts on its financial statements:
*Relates solely to the acquisition of inventory
Which of the following is correct about the accounts receivable in the operating
activities category in the statement of cash flows?
A) The increase of $15,000 will be subtracted from net income.
B) The increase of $15,000 will be subtracted from sales to determine cash received
from customers.
C) The increase of $15,000 will be added to sales to determine cash received from
customers.
D) The increase of $15,000 will be added to net income.
The manager at the Yarn Factory changed the price of spools to increase sales. The
current price per unit is $13.85 per box of 500 spools; and, the forecasted lower price
per unit to increase sales is $9.95 per box of 500 spools. If the variable expenses remain
at $9.14 and the fixed expenses remain $3,400 how many units must be sold at the new
price to breakeven?
Compute the contribution margin per unit using the old sales price. Next, compute the
contribution margin per unit using the new sales price. Use the new unit contribution
margin to compute breakeven sales in units. What is the breakeven sales in units?
A) 4,198 units
B) 4,272 units
C) 4,340 units
D) 4,440 units
Enter the letters of the items needed to compute that variance on the line in front of
each variance. You can enter more than one item on each line as applicable.
A.Standard overhead allocated to production
B.Flexible budget overhead for actual number of outputs
C.Actual variable overhead cost
D.Fixed overhead costs
Selected information about The Staccato Company for the current year and prior year is
given below.
The current year’s income tax percentage (as would be found on a vertical analysis of
the income statement for the current year) is
A) 142.11%.
B) 42.11%.
C) 5.00%.
D) 5.45%.
Frito-Lay’s Casa Grande plant that controls expenses using lean thinking to eliminate
waste may be classified as a(n)
A) cost center.
B) investment center.
C) profit center.
D) revenue center.
Taylor Company reported the following information for the current year:
What would a vertical analysis report with respect to current year net income before
income tax and income tax expense?
A) An increase of $125,112 from prior to current year
B) An increase of both net income before income tax and income tax of 22%
C) A decrease of $29,112 in net income before tax
D) Net income before tax of 21% and income tax of 2.00% of net sales revenue
The individuals at Page Manufacturing perform the following duties:
Identify Employee C and Employee D.
A) CEO: COO
B) Treasurer; Controller
C) Internal Audit Function; Audit Committee
D) Cross-Functional Team; Treasurer
E) Audit Committee; CEO
The Bedford Corporation reported the following income statement and balance sheet
amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $30,000 of the current year’s current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the dividend yield for the current year?
A) 59.29%
B) 54.06%
C) 37.49%
D) 2.43%
The balance in the ________ is used to check the accuracy on the ending balance of the
statement of cash flows.
A) asset and liability accounts
B) liability accounts
C) cash and cash equivalent accounts
D) asset accounts
The SEC requires an independent certified public accountant (CPA) to audit reports
generated by managerial accounting systems.
The manager of a local CVS drugstore that is in accountable to increase sales, revenue,
and controlling costs may be in charge of a(n)
A) cost center.
B) investment center.
C) revenue center.
D) profit center.
The Stemple Corporation data for the current year:
What would a horizontal analysis report with respect to net sales revenue show?
A) Cost of goods sold as 80.67% of net sales revenue
B) A sales return of 9.16%
C) An increase of 19.00% in net sales revenue
D) Accounts receivable turnover of 8.06 times
The managerial accountant at the Clothing Factory is required to determine the amount
of cash received from consumers during the year. The managerial accountant reported
that the beginning balance in accounts receivable on January 1, 20X2 was $600,000.
There were $10,200,000 in sales revenue recorded on the income statement, and the
ending balance in accounts receivable on December 31, 20X2 was $420,000. Calculate
the amount of cash collections at the Clothing Factory during 20X2 and discuss how the
managerial accountant can ensure that all cash transactions from operating activities are
recorded during the year. What occurs when accounts receivable increases? What
occurs when accounts receivable decreases?
Use the direct method of cash flows to answer the following question:
Compute the cash receivables received from customers during the year.
Lighthouse Merchandise Group is a global operation that sells lighthouse merchandise
to consumers and groups in the marketplace. The managerial accountant reported the
following information:
Compute the cost of goods available for sale at Lighthouse Merchandise Group. What is
the cost of goods sold?
For each of the following transactions, indicate the section in which it may be included.
Use O for the operating section, I for the investing activities section, F for the financing
section, S for a separate schedule of noncash investing and financing activities, and N
for items not disclosed on the statement of cash flows.
(Present value of annuity table required) The Cookies Bakery Company managerial
accountant considers the purchase of a new convection oven system. A preferred vendor
offers two plausible options, the Tech-Smart convection system (TSCS) and the
Perfection Convection Solution Series 3 (PCS3). Both convection systems have a useful
life of 12 years. The TSCS requires an initial investment of $250,000 whereas the PCS3
requires an initial investment of $330,000. The energy efficient technology of the TSCS
is projected to increase total revenue $38,000 annually while the precise production
capability of the PCS3 is projected to increase revenue $52,000 annually. The
Managerial accountant plans to invest the cash inflow in an annuity yielding 8%.
Compare the net present value of each new system and state which investment is more
beneficial to Cookies Bakery Company.