1) hogan company has other operating expenses of $260,000. there has been a decrease
in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000
larger than in the prior period. using the direct method of reporting cash flows from
operating activities, what were hogan’s cash payments for operating expenses?
a.$248,000
b.$252,000
c.$220,000
d.$300,000
2) the following information pertains to lance company. assume that all balance sheet
amounts represent both average and ending balance figures. assume that all sales were
on credit.
what is the price earnings ratio for this company?
a.2 times
b.3.8 times
c.4 times
d.5.0 times
3) carpino company purchased equipment and these costs were incurred:
what amount should be recorded as the cost of the equipment?
a.$90,000
b.$94,500
c.$95,250
d.$96,750
4) under the allowance method, bad debt expense is recorded
a.when an individual account is written off
b.when the loss amount is known
c.for an amount that the company estimates it will not collect
d.several times during the accounting period
5) a weakness of the current ratio is
a.the difficulty of the calculation
b.it uses year-end balances of current asset and current liability accounts
c.it is rarely used by sophisticated analysts
d.it can be expressed as a percentage, as a rate, or as a proportion
6) the following information is available from the annual reports of young and olde:
instructions
(a)calculate the inventory turnover ratio and days in inventory for both companies.
(b)calculate youngs inventory turnover ratio after adjusting for the lifo reserve. young
uses the lifo inventory method.
(c)what conclusion concerning the management of inventory can be drawn from these
data?
7) at may 1, 2012, heineken company had beginning inventory consisting of 100 units
with a unit cost of $7. during may, the company purchased inventory as follows:
200 units at $7
300 units at $8
the company sold 500 units during the month for $12 per unit. heineken uses the average
cost method. the value of heineken’s inventory at may 31, 2012 is
a.$700
b.$750
c.$800
d.$4,500
8) 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,
interest paid on note 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
9) reese corporation had net income of $250,000 and paid dividends to common
stockholders of $50,000 in 2012. the weighted average number of shares outstanding in
2012 was 50,000 shares. reese corporation’s common stock is selling for $40 per share
on the new york stock exchange. reese corporation’s price-earnings ratio is
a.2 times
b.8 times
c.10 times
d.5 times
10) when using the balance sheet approach, the balance in allowance for doubtful
accounts must be considered prior to the end of period adjustment when using which of
the following methods?
a.net realizable method
b.direct write-off method
c.accrual method
d.allowance method