1) harden corporation engaged in the following transaction. assume that the harden
corporation uses the indirect method to depict cash flows. indicate where, if at all,
long-term debt retired with cash would be classified on the statement of cash flows.
a.operating activities section
b.investing activities section
c.financing activities section
d.does not represent a cash flow
2) using the following information, prepare a bank reconciliation for munoz company
for may 31, 2012
a.the bank statement balance is $8,300.
3) the entry to record a sale of $500 with terms of 2/10, n/30 will include a
a.credit to sales discounts for $10
b.debit to cash for $490
c.credit to accounts receivable for $500
d.credit to sales revenue for $500
4) the balance in the accumulated depreciation account represents the
a.cash fund to be used to replace plant assets
b.amount to be deducted from the cost of the plant asset to arrive at its fair market value
c.amount charged to expense in the current period
d.amount charged to expense since the acquisition of the plant asset
5) on january 1, 2012, bartley corp. paid $1,200,000 for 100,000 shares of oak
company’s common stock, which represents 40% of oak’s outstanding common stock.
oak reported income of $300,000 and paid cash dividends of $90,000 during 2012
bartley should report the investment in oak company on its december 31, 2012, balance
sheet at
a.$1,200,000
b.$1,116,000
c.$1,236,000
d.$1,284,000
6) quiet phones company has the following inventory data:
a physical count of merchandise inventory on july 30 reveals that there are 40 units on
hand. using the lifo inventory method, the amount allocated to cost of goods sold for
july is
a.$780
b.$820
c.$1,180
d.$1,220
7) borrowing money is an example of a(n)
a.delivering activity
b.financing activity
c.investing activity
d.operating activity
8) when a corporation distributes a dividend the
a.most common form of distribution is a cash dividend.
b.dividends account will be increased with a credit.
c.retained earnings account will be directly increased with a debit.
d.dividends account will be decreased with a debit.
9) a plant asset was purchased on january 1 for $60,000 with an estimated salvage value
of $12,000 at the end of its useful life. the current year’s depreciation expense is $4,000
calculated on the straight-line basis and the balance of the accumulated depreciation
account at the end of the year is $20,000. the remaining useful life of the plant asset is
a.15 years
b.12 years
c.5 years
d.7 years
10) the following information is available from the annual reports of nite and day
companies.
(a)based on the preceding information, compute the following for each company:
1> receivables turnover ratio. (assume all sales were credit sales.)
2> average collection period.
(b)what conclusion concerning the management of accounts receivable can be drawn
from these data?
11) which of the following is a way of disposing of a note receivable?
a.honoring it on maturity date
b.selling it to receive cash before the maturity date
c.default by the maker
d.all of these are ways to dispose of notes receivable
12) the cash debt coverage ratio is computed by dividing net cash provided by operating
activities by
a.average current liabilities
b.net sales
c.average long-term liabilities
d.average total liabilities
13) apple-a-day company has the following inventory data:
a physical count of merchandise inventory on july 30 reveals that there are 30 units on
hand. using the lifo inventory method, the amount allocated to cost of goods sold for
july is
a.$1,480
b.$1,470
c.$1,450
d.$1,430