ACC 291 Entire Course

ACC 291 Entire Course

Entire Course Link

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 ACC/291

PRINCIPLES OF ACCOUNTING II

 

The Latest Version A+ Study Guide

 

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ACC 291 Entire Course Link

https://uopcourses.com/category/acc-291/

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ACC 291 Week 1 Comparative Analysis Problem
 

Purpose of Assignment 

The purpose of this assignment is to help you understand the basics of financial statement analysis using financial ratios on the assets section of the balance sheet, data interpretation, and how ratios are used to gain insight about the management of receivable.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Develop an 875-word analysis providing conclusions concerning the management of accounts receivable based on the financial statements of Columbia Sportswear Company presented in Appendix B and the financial statements of VF Corporation presented in Appendix C, including the following:

 

 

 

Based on the information contained in these financial statement, compute the following 2014 values for each company: 

 

 

 

Accounts receivable turnover (For VF, use “Net sales” and assume all sales were credit sales)
 

 

Average collection period for accounts receivable
 

 

 
 

 

What conclusions concerning the management of accounts receivable can be drawn from this data?
 

 

Use the Week 1 Excel® spreadsheet to show your work and submit with your analysis.

Click the Assignment Files tab to submit your assignment.

 

 

 

ACC 291 Week 1 Practice Quiz
 

 

 
 

Practice Question 01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

What type of receivable is evidenced by a formal instrument and normally requires the payment of interest?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A trade receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
An account receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A note receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Past-due accounts receivables
 

 

 

 

Practice Question 05
 

When is a receivable recorded by a service organization?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
When service is provided on account
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
When the related expenses are incurred
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
When the bill is sent to the customer
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
When the customer pays
 

 

 

Practice Question 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

At what value are accounts receivable reported on the balance sheet?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cash (net) realizable value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Present value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Maturity value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Fair market value
 

 

 

Practice Question 21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Short-term notes receivable are reported at their cash (net) realizable value.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
True
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
False
 

 

 

Practice Question 25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Which one of these statements about promissory notes is incorrect?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The party to whom payment is to be made is called the payee.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The party making the promise to pay is called the maker.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A promissory note is not a negotiable instrument.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A promissory note is more liquid than an account receivable.
 

 

 

 

Practice Question 02
 

Which of the following should be classified as an “other” receivable?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Accounts receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Notes receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Interest receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Trade receivables
 

 

 

Practice Question 03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

What type of receivables result from sales transactions?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Other receivables
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Non-trade receivables
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Trade receivables
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Long-term receivables
 

 

 

 

Practice Question 52
 

Which one of the following is not a method used by companies to accelerate cash receipts?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Offering discounts for early payment
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Writing off receivables
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Selling receivables to a factor
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Accepting national credit cards for customer purchases
 

 

 

 

Practice Question 53
 

Which of the following accounts is debited when a company factors its accounts receivable?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Interest Expense
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Accounts Receivable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Service Charge Expense
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Loss on Sale of Accounts Receivable
 

 

 

 

Practice Question 57
 

Which of the following is the value at which loans and receivables should be reported under IFRS?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Maturity value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cash realizable value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Amortized cost
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Net of bad debt expense
 

 

 

 

ACC 291 Week 2 Financial Reporting Problem, Apple Inc.
 

Purpose of Assignment

The purpose of this assignment is to help you understand the basics of financial statement analysis related to the assets section of the balance sheet, data interpretation, and how financial information is obtained to understand how a company accounts for its long-lived assets.

Assignment Steps 

Resources: Financial Accounting: Tools for Business Decision Making

Note: The financial statements of Apple, Inc. are presented in Appendix A of Financial Accounting. Instructions for accessing and using the company’s complete annual report, including the notes to the financial statements, are also provided in Appendix A.

Complete a 1,050-word summary of findings and recommendations from the following questions:

 

 

 

What were the total cost and book value of property, plant, and equipment at September 27, 2014?
 

 

Using the notes to find financial statements, what method or methods of depreciation are used by Apple for financial reporting purposes?
 

 

What was the amount of depreciation and amortization expense for each of the three years 2012-2014? (Hint: Use the statement of cash flows).
 

 

Using the statement of cash flows, what are the amounts of property, plant, and equipment purchased in 2014 and 2013?
 

 

Using the notes to the financial statements, explain in the summary how Apple accounted for its intangible assets in 2014.
 

 

Use the Week 2 Excel® spreadsheet to show your work and submit with your summary.

Click the Assignment Files tab to submit your assignment.

 

 
 

 

 
 

 

ACC 291 Week 2 Charter: Individual Assignment
 

Resources: Week 2 Learning Team Collaborative Discussion and the Learning Team Charter for Collaborative Learning Activities.

Write a 260- to 350-word individual response to the following:

 

 

 

Consider the multiple definitions of collaboration.
 

 

Define collaboration and how you will apply it in this course based upon the discussion with your Learning Team. Be sure to reference and cite your sources.
 

 

Answer the question individually.
 

 

Click the Assignment Files tab to submit your assignment and be sure to attach a copy of your Learning Team Charter for Collaborative Learning Activities.

 

 
 

 

 
 

 

ACC 291 Week 2 Practice Quiz
 

 

Practice Question 01

Land improvements are depreciable assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
True
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
False
 

 

 

Practice Question 05

Which of the following is not a depreciable asset?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Land improvements
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Equipment
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Buildings
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Land
 

 

 

Practice Question 10

Expenditures to maintain the operating efficiency and expected productive life of the unit are expensed as incurred.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
True
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
False
 

 

 

Practice Question 15

What is depreciation?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A valuation approach
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A cash accumulation approach
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A cost allocation method
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
An adjustment to market value over time
 

 

 

Practice Question 22

Cuso Company purchased equipment on January 1, 2016, at a total invoice cost of $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$156,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$78,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$80,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$160,000
 

 

 

Practice Question 29

When there is a change in estimated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
current and future years’ depreciation should be revised.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
new plant assets should be acquired to replace the old.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
only future years’ depreciation should be revised.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
previous depreciation should be corrected.
 

 

 

Practice Question 36

On June 1, 2017, Brislin Company sold some equipment for $22,000. The original cost was $80,000, the estimated salvage value was $8,000, and the expected useful life was 8 years. The equipment was fully depreciated. How much is the gain or loss on the sale?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$50,000 loss
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$5,400 gain
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$14,000 gain
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$850 loss
 

 

 

Practice Question 44

Given the following account balances at year end, how much is amortization expense on Anisha Enterprises income statement for the current year if Anisha thinks all of its intangibles should be amortized over ten years?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue
$45,000,000
Patents
1,500,000
Accounts receivable
4,000,000
Land
15,000,000
Equipment
25,000,000
Trademarks
1,000,000
Goodwill
4,500,000
Research & development
2,000,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$250,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$700,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$900,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Some other answer
 

 

 

Practice Question 51

Walk Co’s average total assets are $200,000, net sales total to $100,000, and net income is $40,000. How much net income did Walk Co generate for each dollar of assets invested?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$0.50
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$0.20
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$5.00
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$2.00
 

 

 

Practice Question 58

Schneider Trucking Inc. purchased a new semi-truck on January 1, 2016 for $200,000. Its useful life is expected to be 4 years and its salvage value is estimated at $25,000. What is the depreciation for 2017 using the declining-balance method at double the straight-line rate?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$50,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$100,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$43,750
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$87,500
 

 

 
 

 

 
 

 

ACC 291 Week 3 Practice Quiz
 

 

Practice Question 01

The time period for classifying a liability as current is one year or the operating cycle, whichever is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
probable.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
longer.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
shorter.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
possible.
 

 

 

Practice Question 05

Which one of the following is not a typical current liability?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Mortgages payable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Salaries payable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current maturities of long-term debt
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Interest payable
 

 

 

Practice Question 10

Buttner Company borrows $88,500 on September 1, 2017, from Harrington State Bank by signing an $88,500, 12%, one-year note. How much is accrued interest at December 31, 2017?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$10,620
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$2,655
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$3,540
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$4,425
 

 

 

Practice Question 25

How is the market value of a bond issuance determined?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
By adding the face value of the principal amount to the stated value of the interest payments.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
By computing the present value of the principal.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
By computing the present value of the interest payments.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
By adding the present value of the principal amount to the present value of the interest payments.
 

 

 

Practice Question 30

If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
True
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
False
 

 

 

Practice Question 35

What is the effect of amortizing a bond discount?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It decreases bond interest expense.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It increases the carrying value of the bonds.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It decreases the maturity value of the bonds.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
There is no effect on the bond interest expense.
 

 

 

Practice Question 31

Cuso Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are issued at a premium, what does this indicate?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The contractual interest rate exceeds the market interest rate.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The contractual interest rate and the market interest rate are the same.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The market interest rate exceeds the contractual interest rate.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
No relationship exists between the market and contractual rates.
 

 

 

Practice Question 34

When a bond is sold at a premium, at what amount is it reported on the balance sheet?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Premium value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Market value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Interest value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Carrying value
 

 

 

Practice Question 36

Tanner, Inc. issued a 10%, 5-year, $100,000 bond when the market rate of interest was 12%. At what value will the bond sell?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Face value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A premium
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A discount
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Par
 

 

 

Practice Question 46

Which of the following is not a commonly used method of presenting current liabilities on the balance sheet?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Listing currently maturing long-term debt first.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Listing current debt in the order of oldest first and then chronologically.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
In order of magnitude or size.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
In order of their maturity.
 

 

 
 

 

 
 

 

ACC 291 Week 3 The Liabilities Section of O’Brian’s Balance Sheet
 

Purpose of Assignment

The purpose of this assignment is to help you understand the balance sheet presentation for the liabilities of a company.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Prepare the liabilities section of O’Brian’s balance sheet using the following information:

 

 

 

Accounts payable $157,000
 

 

Notes payable (due May 1, 2018) $20,000
 

 

Bonds payable (due 2021) $900,000
 

 

Unearned rent revenue $240,000
 

 

Discount on bonds payable $41,000
 

 

FICA taxes payable $7,800
 

 

Interest payable $40,000
 

 

Notes payable (due 2019) $80,000
 

 

Income taxes payable $3,500
 

 

Sales taxes payable $1,700
 

 

The Liabilities Section of O’Brian’s balance sheet must be 525 words.

Show work on the Week 3 Excel® spreadsheet.

Note: This assignment requires that you only submit an Excel® Workbook file. There are no written or APA guideline requirements. 

Click the Assignment Files tab to submit your assignment.

 

 
 

 

 
 

 

ACC 291 Week 4 Practice Quiz
 

Practice Question 01

The stockholders of a corporation have unlimited liability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
True
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
False
 

 

 

Practice Question 05

Which of the following is a disadvantage of the corporate business form?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
No income taxes
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Easy acquisition of capital
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Government regulation
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Continuous life
 

 

 

Practice Question 10

If a corporation issues 1,000 shares of $3 par common stock for $7 a share, how much is the legal capital?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$3,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$7,000
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$0
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
$4,000
 

 

 

Practice Question 20

For what reason might a company acquire treasury stock?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
To increase the number of shares of stock outstanding
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
To reissue the shares to officers and employees under bonus and stock compensation plans
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
To signal to the stock market that management believes the stock is overpriced
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
To increase profit
 

 

 

Practice Question 30

Which one of the following is not a right of preferred stockholders?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Priority to the assets in the event of liquidation
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Priority in relation to dividends
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Priority voting rights
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Priority to dividends and assets in liquidation.
 

 

 

Practice Question 59

If everything else is held constant, what will cause earnings per share to increase?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The purchase of treasury stock
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The payment of a cash dividend to preferred stockholders
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The issuance of new shares common stock
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The payment of a cash dividend to common stockholders
 

 

 

Practice Question 56

Which of the following does not increase the return on common stockholders’ equity?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
An increase in the return on assets ratio
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
An increase in the use of debt financing
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
An increase in the company’s stock price
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
An increase in the company’s net income
 

 

 

Practice Question 60

When a stock dividend is declared, which of the following accounts is debited?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Common Stock Dividends Distributable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Paid-in Capital in Excess of Par Value
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Common Stock
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Stock Dividends
 

 

 

Practice Question 55

Jaylo Inc. had net income of $500,000, net sales of $10,000,000 and paid cash dividends of $200,000 to the common stockholders. How much is Jaylo’s payout ratio?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
4%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
40%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
20%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
2%
 

 

 

Practice Question 54

Consider the following data for a corporation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income
 
$800,000
Preferred stock dividends
 
$50,000
Market price per share of stock
 
$25
Average common stockholders’ equity
 
$4,000,000
Cash dividends declared on common stock
 
$20,000
 

What is the return on common stockholders’ equity?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
19.50%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
20.00%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
21.25%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
18.75%
 

 

 

 
 

 

 
 

 

ACC 291 Week 4 Stockholders’ Equity Section of the Balance Sheet
 

Purpose of Assignment 

The purpose of this assignment is to help you become familiar with examining the stockholders’ equity section of the balance sheet. 

Assignment Steps 

Resources: Financial Accounting: Tools for Business Decision Making, Ch. 11

Answer the following questions in 1,050 words using the Lachlin Corporation Balance Sheet located on p. 575 of Financial Accounting: 

 

 

 

How many shares of common stock are outstanding?
 

 

Assuming there is a stated value, what is the stated value of the common stock?
 

 

What is the par value of the preferred stock?
 

 

If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?
 

 

If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?
 

 

Use the Week 4 Excel® spreadsheet and submit with your answers.

Click the Assignment Files tab to submit your assignment.

 

 
 

 

 
 

 

 
 

 

ACC 291 Week 5 Financial Reporting Problem II
 

Purpose of Assignment 

The purpose of this assignment is to expose you to the basic process involved in the analysis of the cash flow statement. 

Assignment Steps 

Resources: Appendix A of Financial Accounting: Tools for Business Decision Making 

Note: This is a two part assignment. 

Part 1 

Answer questions A-F in problem CT12-1 in Financial Accounting (p. 640). 

Provide an 875-word analysis of your findings. 

Include conclusions concerning the management of the company’s cash.

 

Part 2 

Complete a 1,050-word summary of findings and recommendations from the following questions:

 

 

 

What is the par or stated value per share of Apple’s common stock?
 

 

What percentage of Apple’s authorized common stock was issued at September 27, 2014?
 

 

How many shares of common stock were outstanding at September 28, 2013, and at September 27, 2014?
 

 

Calculate the payout ratio, earnings per share, and return on common stockholders’ equity for 2014. 
 

 

Use the Week 5 Excel® spreadsheet and submit with your analysis and summary.

Click the Assignment Files tab to submit your assignment.

 

 
 

 

 

 

 

ACC 291 Week 5 Practice Quiz
 

 

Practice Question 10

Which of the following is an operating activity?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Payment of a cash dividend
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Sale of equipment
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Payment of interest
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Making a loan to another entity
 

 

 

 

Practice Question 15
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Which is an example of a cash flow from an investing activity?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Payment of cash to repurchase outstanding capital stock
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Receipt of cash from the sale of equipment
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Payment of cash to suppliers for inventory
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Receipt of cash from the issuance of bonds payable
 

 

 

 

Practice Question 20
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Hanover, Inc. purchased land through the issuance of long-term bonds. How is this reported on the statement of cash flows?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Operating activity
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Significant noncash investing and financing activity that merits disclosure
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Investing inflow
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Financing outflow
 

 

 

 

Practice Question 25
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Under the indirect method of preparing the statement of cash flows, which of the following is added to net income in the operating activities section?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Gain on sale of equipment
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Depreciation expense
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Decrease in accounts payable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Increase in accounts receivable
 

 

 

 

Practice Question 30
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

In what section of the statement of cash flows will the issuance of bonds payable to acquire a building be reported?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cash flows from operating activities
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cash flows from investing activities
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cash flows from financing activities
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Noncash investing and financing activities
 

 

 

 

Practice Question 45
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Which of the following items is reported in the operating activities section of a statement of cash flows prepared using the direct method?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cash payments to suppliers
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Depreciation expense
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Loss on sale of building
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Increase in accounts receivable
 

 

 

 

Practice Question 20
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

In horizontal analysis of a balance sheet, of what amount is each item expressed as a percentage?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current year net income amount
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Base-year amount
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current year stockholders’ equity amount
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current year total assets amount
 

 

 

 

Practice Question 23
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

The following schedule is a display of what type of analysis?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Amount
 
Percent
Current assets
 
$200,000
 
25%
Property, plant, and equipment
 
600,000
 
75%
Total assets
 
$800,000
 
100%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Trend analysis
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Horizontal analysis
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Vertical analysis
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Ratio analysis
 

 

 

 

Practice Question 25
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

Ceradyne, Inc. presented the following data for a company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities
 
$360
Long-term debt
 
480
Common stock
 
640
Retained earnings
 
520
Total liabilities & stockholders’ equity
 
$2,000
 

How would common stock appear on a common size balance sheet using vertical analysis?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
32.0%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cannot be determined from the data given
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
75.0%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
55.1%
 

 

 

Practice Question 44

Use the following financial statement information as of the end of each year to answer this question.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
2017
2016
Inventory
$54,000
$48,000
Current assets
81,000
106,000
Total assets
392,000
336,000
Current liabilities
27,000
36,000
Total liabilities
102,000
88,000
Total stockholders’ equity
290,000
248,000
Preferred stock
10,000
10,000
Net sales
784,000
697,000
Cost of goods sold
306,000
277,000
Net income
34,000
90,000
Tax expense
22,000
18,000
Interest expense
12,000
12,000
Dividends paid to preferred stockholders
2,000
2,000
Dividends paid to common shareholders
1,000
1,000
 

Compute the profit margin for 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
4.3%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
8.9%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
11.7%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
8.4%
 

 

 

 

 

 

ACC 291 Week 5 Final Exam
 

 

 

Multiple Choice Question 60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The term “receivables” refers to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash to be paid to debtors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
amounts due from individuals or companies.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
merchandise to be collected from individuals or companies.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash to be paid to creditors.
 

 

 

Multiple Choice Question 70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Three accounting issues associated with accounts receivable are

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
accrual, bad debts, and accelerating collections.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
depreciating, valuing, and collecting.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
recognizing, valuing, and accelerating collections.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
depreciating, returns, and valuing.
 

 

 

Multiple Choice Question 82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
a sale is made.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
an account becomes bad and is written off.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
management estimates the amount of uncollectibles.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
a customer’s account becomes past due.
 

 

 

Multiple Choice Question 175

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Which one of the following is not a principle of sound accounts receivable management?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Determine a payment period.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Delay cash receipts from receivables if necessary.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Determine to whom to extend credit.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Monitor collections.
 

 

 

Multiple Choice Question 176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The accounts receivable turnover is computed by dividing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
total sales by average receivables.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
total sales by ending receivables.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
net credit sales by average receivables.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
net credit sales by ending receivables.
 

 

 

Multiple Choice Question 177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The accounts receivable turnover is used to analyze

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
profitability.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
liquidity.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
risk.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
long-term solvency.
 

 

 

Multiple Choice Question 190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The following information is provided for Sheridan Company and Concord Corporation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in $ millions)
Sheridan Company
Concord Corporation
Net income 2017
  $170
  $390
Net sales 2017
1625
4550
Total assets 12/31/15
1005
2280
Total assets 12/31/16
1160
3080
Total assets 12/31/17
1160
4000
 

What is Concord’s return on assets (rounded) for 2017?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
11.0%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
9.8%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
14.6%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
12.7%
 

 

 

Multiple Choice Question 48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of the following is not properly classified as property, plant, and equipment?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Building used as a factory.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Land used in ordinary business operations.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Land improvement, such as parking lots and fences.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A truck held for resale by an automobile dealership.
 

 

 

Multiple Choice Question 49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

A characteristic of a plant asset is that it is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
held for sale in the ordinary course of the business.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
not currently used in the business but held for future use.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
intangible.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
used in the operations of a business.
 

 

 

Multiple Choice Question 69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

A current liability is a debt that can reasonably be expected to be paid

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
out of currently recognized revenues.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
out of cash currently on hand.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
within one year, or the operating cycle, whichever is longer.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
between 6 months and 18 months.
 

 

 

Multiple Choice Question 70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of the following most likely would be classified as a current liability?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Dividends payable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Bonds payable in 5 years
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Mortgage payable as a single payment in 10 years
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Three-year notes payable
 

 

 

Multiple Choice Question 210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The 2017 financial statements of Sunland Company contain the following selected data (in millions).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets
$75
Total assets
185
Current liabilities
39
Total liabilities
64
Cash
9
Interest expense
4
Income taxes
11
Net income
13
 

The debt to assets ratio (rounded) is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
52.0%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
2.89%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
34.6%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
7.7 times.
 

 

 

Multiple Choice Question 207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

In a recent year Monty Corp. had net income of $152000, interest expense of $28700, and income tax expense of $41500. What was Monty Corp.’s times interest earned (rounded) for the year?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
6.30
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
5.30
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
7.74
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
6.74
 

 

 

Multiple Choice Question 168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

If bonds are issued at a discount, it means that the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
bondholder will receive effectively less interest than the contractual rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
market interest rate is lower than the contractual interest rate.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
market interest rate is higher than the contractual interest rate.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
financial strength of the issuer is suspect.
 

 

 

Multiple Choice Question 161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

If bonds are issued at a premium, the stated interest rate is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
adjusted to a higher rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
higher than the market rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
lower than the market rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
too low to attract investors.
 

 

 

Multiple Choice Question 50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The chief accounting officer in a company is known as the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
vice-president.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
treasurer.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
controller.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
president.
 

 

 

Multiple Choice Question 51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which one of the following would not be considered an advantage of the corporate form of organization?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Limited liability of stockholders.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Separate legal existence.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Continuous life.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Government regulation.
 

 

 

Multiple Choice Question 54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of the following would not be true of a privately held corporation?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Its shares are regularly traded on the New York Stock Exchange.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It does not offer its shares for sale to the general public.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It is sometimes called a closely held corporation.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It is usually smaller than a publicly held company.
 

 

 

Multiple Choice Question 200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
.
 
 
 

The following information pertains to Blue Company. Assume that all balance sheet amounts represent average balance figures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets
$400000
Stockholders’ equity-common
280000
Total stockholders’ equity
282000
Sales revenue
108000
Net income
22000
Number of shares of common stock
6000
Common dividends
6100
Preferred dividends
6600
 

What is Blue’s payout ratio?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
27.73%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
21%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
13%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
41%.
 

 

 

Multiple Choice Question 195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Concord Corporation had net income of $67245 and paid dividends of $38000 to common stockholders and $16500 to preferred stockholders in 2017. Concord Corporation common stockholders’ equity at the beginning and end of 2017s was $450000 and $545000, respectively. Concord Corporation return on common stockholders’ equity is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
10%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
5%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
14%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
9%.
 

 

Multiple Choice Question 44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The primary purpose of the statement of cash flows is to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
provide information about the cash receipts and cash payments during a period.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
provide information about the investing and financing activities during a period.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
prove that revenues exceed expenses if there is a net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
facilitate banking relationships.
 

 

 

 

Multiple Choice Question 43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which one of the following items is not generally used in preparing a statement of cash flows?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Additional information.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Adjusted trial balance.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current income statement.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Comparative balance sheets.
 

 

 

Multiple Choice Question 54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The category that is generally considered to be the best measure of a company’s ability to continue as a going concern is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
usually different from year to year.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash flows from operating activities.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash flows from investing activities.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash flows from financing activities.
 

 

 

Multiple Choice Question 69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, a stock dividend declared and issued would be classified on the statement of cash flows.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Financing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Does not represent a cash flow.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Investing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Operating activities section.
 

 

 

Multiple Choice Question 71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, an inventory increase with cash would be classified on the statement of cash flows.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Investing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Financing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Operating activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Does not represent a cash flow.
 
 
 
 
 

Multiple Choice Question 153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
.
 
 
 

Free cash flow provides an indication of a company’s ability to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate cash to invest in capital expenditures.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate cash to pay dividends.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate cash to invest in capital expenditures and to pay dividends.
 

 

 

Multiple Choice Question 147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

When using the indirect method to compute cash provided by operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
decreases in inventory are subtracted from net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
income taxes paid may be ignored.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
amortization expense is added to net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
increases in accounts receivable are added to net income.
 

 

 

Multiple Choice Question 138

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

To determine the net cash provided (used) by operating activities, it is necessary to analyze

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
the current year’s income statement.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
a comparative balance sheet.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
additional information.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
all of these answer choices are correct.
 
 
 
 
 

Multiple Choice Question 196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of these is not a liquidity ratio?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Inventory turnover
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Accounts receivable turnover
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current ratio
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Asset turnover
 

 

 

Multiple Choice Question 193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The current ratio would be of most interest to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
short-term creditors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
long-term creditors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
customers.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
stockholders.
 

 
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