Use the following Assets section of Hu Corporation’s balance sheets for the years ended
December 31, 2015 and
2014 to answer the questions that follow.
Refer to the information for Hu Corporation.
Calculate the following ratios for Hu for 2015.
A.Average life of property, plant, and equipment
B.Average age of property, plant, and equipment
C.What information do these ratios provide to investors and creditors?
Match the following characteristics with the statements about each qualitative
characteristic’s importance.
a.Consistency
b.Materiality
c.Conservatism
d.Comparability
e.Reliability
f.Relevance
g.Understandability
Users must be able to compare accounting information of a firm with its prior year
information.
Match the terms with the descriptions related to merchandise sales and purchases.
a.Transportation-in
b.Perpetual inventory system
c.Net purchases
d.FOB Destination
e.Cost of goods available for sale
f.Periodic inventory system
g.FOB Shipping point
h.Delivery expense
The buyer must pay the shipping costs.
Match the following terms with the best definitions for questions 212 through 219.
a.Purchase requisition.
b.Receiving Report.
c.Vendor Invoice.
d.Check.
e.Control procedures.
f.Inventory count.
g.Segregation of duties.
h.Source document control.
An example of independent verification.
For each of the following accounts, indicate whether it is a balance sheet account or an
income statement account.
a.Balance sheet account
b.Income statement account
Furniture and Fixtures
Presented below are selected data from the financial statements of Provost Corp.
The dividend payout ratio for 2016 is
a. 1.8%
b. 30.0%
c. 36.3%
d. 38.0%
For each of the following accounts, indicate whether it is a balance sheet account or an
income statement account.
a.Balance sheet account
b.Income statement account
Accounts Payable
From the following list, select the proper section from the statement of cash flows in
which it would be classified.
a.Operating Activities
b.Investing Activities
c.Financing Activities
Received cash from selling goods to customers
Latahmer Corporation is reconciling its May bank account. For each item listed, state
how it would be handled on the bank reconciliation.
a.Addition to bank balance
b.Subtraction from bank balance
c.Addition to book balance
d.Subtraction from book balance
e.Would not appear on the May reconciliation
Service charge on the May bank statement for new checks
Vencenzia Company reported the following information in its annual report for 2016.
What is the cash flow adequacy ratio for 2016 for Vencenzia Company? a. 0.38
b. 1.50
c. 1.88
d. 7.50
Given below are several ratios. Select the accounts or amounts that would be used in
order to calculate the ratio. You will have more than one response to each ratio. Some
accounts or amounts may not be used at all. (Select all that apply.)
Profit margin ratio
a.Market price per share
b.Net sales
c.Gross profit
d.Average total assets
e.Interest expense, net of tax
f.Net income
g.Total liabilities
h.Total assets
Given the following list of methods of depreciation, select the method that is best for
the situation or purpose given. Some answers may be used more than once, while others
may not be used at all.
a.Straight-line
b.Units-of-production
c.Double-declining-balance
d.MACRS
This method is the best for management bonus plans.
Choose from the following list of account titles the one that most accurately fits the
description of that account or is an example of that account. An account title may be
used more than once or not at all.
a.Cash
b.Prepaid Asset
c.Investments
d.Taxes Payable
e.Preferred Stock
f.Accounts Receivable
g.Land
h.Accounts Payable
i.Retained Earnings
j.Notes Receivable
k.Buildings
l.Notes Payable
m.Common Stock
Ten acres of land used as the site for a factory
Interest payable on a loan becomes a liability:
a.at the maturity date.
b.when the borrowed money is received.
c.as it accrues.
d.when the note payable is issued.
The solution to this problem requires time value of money calculations. Reference to
Tables 9-1 through 9-4 in the text is necessary to complete the calculations.
The future value of equal semi-annual payments of $500 at 8% compounded
semiannually for 4 years is
a. $ 868
b. $9,320
c. $2,000
d. $4,607
Identify whether the following investor questions are associated with (a) primary or (b)
secondary financial reporting objectives.
a.primary financial reporting objective
b.secondary financial reporting objective
How much has Apple invested in research and development projects?
Refer to the trial balance of Tracy, Inc. (Round calculations to the nearest dollar.)
If the equipment had an estimated useful life of five years and no salvage value, what is
its book value at July 31, after the proper monthly July adjustment is recorded?
a. $10,400
b. $25,567
c. $15,167
d. $10,833
When inventory is sold by a wholesaler or retailer, it is recorded in a different account
on the income statement than a manufacturer would use.
a.True
b.False