1) which of the following financial statements is concerned with the company at a point
in time?
a.balance sheet
b.income statement
c.retained earnings statement
d.statement of cash flows
2) compute the missing amount in each category of the accounting equation.
3) the profit margin ratio is calculated by dividing
a.sales by cost of goods sold
b.gross profit by net sales
c.net income by stockholders’ equity
d.net income by net sales
4) nolan co. purchased 120, 6% parks company bonds for $120,000 cash plus brokerage
fees of $1,200. interest is payable semiannually on july 1 and january 1. if 60 of the
securities are sold july 1 for $62,000 less $600 brokerage fees the entry would include a
credit to gain on sale of debt investments of
a.$2,000
b.$1,400
c.$2,600
d.$800
5) if the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest
annually would sell at an amount
a.less than face value
b.equal to face value
c.greater than face value
d.that cannot be determined
6) the following information pertains to benedict company. assume that all balance
sheet amounts represent average balance figures.
what is the payout ratio for benedict?
a.50%
b.30%
c.20%
d.6%
7) the normal balance of any account is the
a.left side.
b.right side.
c.side which increases that account.
d.side which decreases that account.
8) under ifrs, companies must classify income statement items by
a.function
b.nature
c.nature or function
d.date incurred
9) on december 31, 2011, olski company prepared an income statement and balance
sheet and failed to take into account three adjusting entries. the incorrect income
statement showed net income of $40,000. the balance sheet showed total assets,
$130,000; total liabilities, $60,000; and stockholders equity, $70,000.
the data for the three adjusting entries were:
(1)depreciation of $7,000 was not recorded on equipment.
(2)wages amounting to $10,000 for the last two days in december were not paid and not
recorded. the next payroll will be in january.
(3)rent of $9,000 was paid for two months in advance on december 1. the entire amount
was debited to prepaid rent when paid.
instructions:
complete the following tabulation to correct the financial statement amounts shown
(indicate deductions with parentheses):
10) clark corporation shows income tax expense of $280,000. there has been a $20,000
decrease in federal income taxes payable and a $28,000 increase in state income taxes
payable during the year. using the direct method of reporting cash flows from operating
activities, what was clark’s cash payment for income taxes?
a.$280,000
b.$272,000
c.$232,000
d.$328,000
11) match the ratios with their formulas by entering the appropriate letter in the space
provided.
a.current ratiof.times interest earned
b.current cash debt coverage ratio g. inventory turnover
c.profit margin ratioh.average collection period
d.asset turnover ratioi.average days in inventory
e.price-earnings ratioj.payout ratio
12) the periodicity assumption is often referred to as the expense recognition principle.
13) the entertainment center accumulates the following cost and market data at
december 3
what is the lower-of-cost-or-market value of the inventory?
14) on january 1, 2012, wooden company issued 12,000 shares of $2 par value common
stock for $120,000. on march 1, 2012, the company purchased 2,000 shares of its
common stock for $15 per share for the treasury.
instructions
journalize the stock transactions of wooden company in 2012.
15) notes and accounts receivable that result from sales transactions are often called
______________ receivables.
16) the process of determining the present value is referred to as _________________
the future amount.
17) the expense recognition principle attempts to match ______________ with
______________.
18) during a study session, a classmate states that it is not necessary to make journal
entries and then post them to the ledger. she states that it is sufficient to analyze the
transaction and simply record the information in t-accounts.
what is your response to this statement? be brief, yet concise.
19) on june 1, 2012, shaw company prepared a balance sheet that shows the following:
shortly thereafter, all of the assets were sold for cash.
how would the balance sheet appear immediately after the sale of the assets for cash for
each of the following cases?
20) the following information (in millions of dollars) is available for kline sportswear
for 2012:
sales revenue$6,300net income$504.6
stock price per share$18.45preferred stock dividend$0
average shares outstanding336.4 million
compute the earnings per share for kline sportswear.