Financial Accounting > EXAM > Midterm Exam Fall 2017.Jackson State University ACC 501 . (All)

Midterm Exam Fall 2017.Jackson State University ACC 501 .

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Started on Wednesday, September 13, 2017, 7:03 PM State Finished Completed on Wednesday, September 13, 2017, 9:27 PM Time taken 2 hours 24 mins QUESTION 1 Complete Points out of 60.00 Formulating Financial Statements from Raw Data Following is selected financial information from Cisco Systems, Inc., for its fiscal year ended July 30, 2005 ($ millions). Cash, ending year $4,742 Cash from operating activities 7,568 Sales 24,801 Stockholders' equity 23,184 Cost of goods sold 8,130 Cash from financing activities (9,162) Total liabilities 10,699 Total expense (other than cost of goods sold) 10,930 Noncash assets 29,141 Cash from investing activities 2,614 Net income 5,741 Cash, beginning year 3,722 (a) Prepare the income statement, the balance sheet, and the statement of cash flows for Cisco Systems for the fiscal year ended July 30, 2005. Midterm Exam Fall 2017 9/13/17, 9(29 PM https://mybusinesscourse.com/platform/mod/quiz/review.php?attempt=1310797 Page 2 of 22 Hint: Enter negative numbers only in answers for the statement of cash flows (if applicable). Cisco Systems, Inc Income Statement ($ millions) For Year Ended July 30, 2005 Revenue $ 24,801 Cost of goods sold 8,130 Gross profit 16,671 Total expenses 10,930 Net income $ 5,741 Cisco Systems, Inc Balance Sheet ($ millions) July 30, 2005 Assets Liabilities Cash $ 4,742 Total liabilities $ 10,699 Noncash assets 29,141 Stockholders' equity 23,184 Total assets $ 33,883 Total liabilities and equity $ 33,883 Cisco Systems, Inc Statement of Cash Flows ($ millions) For Year Ended July 30, 2005 Cash from operating activities $ 7,568 Cash from investing activities 2,614 Cash from financing activities (9,162) Midterm Exam Fall 2017 9/13/17, 9(29 PM https://mybusinesscourse.com/platform/mod/quiz/review.php?attempt=1310797 Page 3 of 22 Net change in cash 1,020 Cash, beginning year 3,722 Cash, ending year $ 4,742 (b) Does the negative amount for cash from financing activities concern us? Explain. A negative amount for cash from financing activities implies that the company is unable to pay its debts as they come due and should be interpreted negatively. A negative amount for cash from financing activities is the result of additional borrowings. Because the additional funds are invested in earnings-generating assets, this should be viewed positively. A negative amount for cash from financing activities implies that the market value of the company's long-term debt has declined and this change should be viewed negatively. A negative amount for cash from financing activities reflects the reduction of long-term debt, which is a positive sign of the company’s ability to retire debt obligations. (c) Using the statements prepared for part a. compute the following ratios (for this part only, use the year-end balance instead of the average for assets and stockholders' equity). Round all answers to two decimal places. For example, asset turnover is rounded like this: 0.34567 = 0.35; all other percentage ratios are rounded like this: 0.12345 = 12.35%. (i) Profit margin

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