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Which of the following would be included in cash flows from operating activities?
A) Cash received from customers
B) Cash received from an issuance of bonds
C) Cash dividends paid to stockholders
D) Cash used for purchases of equipment
Use the information above to answer the following question. What is the amount of
Law Services Revenue that will be reported on the income statement for the year 2015?
During 2015, Maverick Law Firm had the following transactions with it clients
(customers):
-On February 1, 2015, the company received cash of $5,000 from clients in payment of
their account balances as of December 31, 2014.
-On November 1, 2015, the company received $2,000 cash as payments in advance for
law services to be performed in 2016.
-The company received a total of $13,000 in cash for law services that were performed
during 2015.
-The company sent bills totaling $4,000 to clients for services performed during 2015;
this amount was unpaid as December 31, 2015.
A) $19,000.
B) $22,000.
C) $24,000.
D) $17,000.
Use the information above to answer the following question. The journal entry
necessary at the end of the period to transfer beginning inventory and net purchases to
cost of goods sold will include which of the following?
A) Credit Inventory for $6,250
B) Debit Purchases for $11,250
C) Debit Inventory for $6,250
D) Debit Cost of Goods Sold for $11,250
_____ Trademark
Definition
A. Names or images that appear with a ® or TM.
B. A tax law dealing with how companies can depreciate their assets.
C. An intangible asset that represents the value of unidentifiable assets acquired.
D. Assets whose values do not change over time.
E. When a company expenses the cost of a long-lived asset by a constant annual
amount.
F. The acquisition cost of an asset minus its accumulated depreciation.
G. The estimated total use a company expects to receive from an asset.
H. Net income plus interest, taxes, depreciation and amortization expenses.
I. What a company expects to receive when an asset is disposed of at the end of its
useful life.
J. When a company expenses the entire cost of a long-lived asset in the first year of use.
K. Tangible long-lived assets.
L. When a company receives free publicity in return for charitable contributions.
M. When a company allocates the cost of a long-lived asset at a higher rate in the first
years of use.
N. The exclusive right to sell or use a product or process that is granted to encourage
innovation.
All of the following might be used to evaluate cash flow performance, except:
A) the absolute amount of cash flow.
B) whether cash flow is positive or negative.
C) the relationship between net income and cash flow.
D) the trend in sales and operating expenses.
Use the information above to answer the following question. The fixed asset turnover
ratio for the current year is closest to:
A) 1.28.
B) 1.24.
C) 0.75.
D) 1.64.
During the year, the company recorded services provided to customers on account.
What effect will this transaction have on the debt-to-assets and times interest earned
ratios?
A) The debt-to-assets ratio will decrease and the times interest earned will increase.
B) The debt-to-assets ratio will increase and the times interest earned will not change
C) Both ratios will decrease.
D) Both ratios will increase.
Your company issues a 5-year bond with a face value of $10,000 and a stated interest
rate of 7%. The market interest rate is 5%. The issue price of the bond is calculated as
the:
A) present value of $10,000 to be received in 5 years plus the present value of $700 per
year for 5 years.
B) face value of the bonds, $10,000.
C) amount investors would have to pay to earn 7% interest.
D) amount investors would have to pay to earn an average of the stated interest rate and
the market interest rate.
Use the information above to answer the following question. What is the net cash
provided by (used in) operating activities?
A) $15,000
B) $6,000
C) ($4,000)
D) ($75,000)
The types of business activities measured by the statement of cash flows are:
A) selling goods, selling services, and obtaining financing.
B) operating activities, investing activities, and financing activities.
C) hiring, producing, and advertising.
D) generating revenues, paying expenses, and paying dividends.
Use the information above to answer the following question. What is the amount of
total liabilities at the end of Year 4?
A) $7,075.
B) $10,075.
C) $9,075.
D) $12,975.
When Harmony Inc. performs $1,000 of services on account for a customer, Harmony
will record a journal entry with a debit to:
A) Cash and a credit to Accounts Receivable.
B) Accounts Receivable and a credit to Service Revenue.
C) Service Revenue and a credit to Unearned Revenue.
D) Cash and a credit to Accounts Payable.
Geisel, Inc. reported net sales revenue of $600,000 in 2015 and $500,000 in 2016. The
company's average net receivables were $120,000 during 2014 and $130,000 during
2015. At December 31, 2016, the company had Accounts Receivable of $148,000 and
an unadjusted debit balance in its Allowance for Doubtful Accounts account of $1,000.
The company reported Bad Debt Expense of $6,000 during 2015.
Required:
Part a. Determine the net receivables at December 31, 2016.
Part b. Calculate the receivables turnover ratio for 2015 and 2016. (Round each
calculation to one decimal place).
Part c. Calculate the days to collect for 2015 and 2016. (Round each calculation to one
decimal place).
Part d. Interpret the results of this analysis.
Part e. Identify possible reasons for the changes in these two ratios from 2015 to 2016.
