RETL 262 Exam 2 | Verified with 100% Correct Answers, A Grade

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RETL 262 Exam 2 | Verified with 100% Correct Answers, A Grade Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $28,000; net ... cash used in investing activities was $10,000 and net cash used in financing activities was $12,000. If the beginning cash balance is $5,000, what is the ending cash balance? $11,000 A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from: Financing activities The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is: Financing activities Investing activities do not include the Issuance of common stock In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information: Repayment of outstanding bonds $107,000 Purchase of treasury stock $62,000 Issuance of common stock $46,000 Payment of cash dividends $15,000 Net cash flows from financing activities for the year were: $138,000 of net cash used Bagwell's net income for the year ended December 31, Year 2 was $175,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Year 1 Common Stock, $5 par value $500,000 $450,000 Paid-in capital in excess of par 948,000 853,000 Retained earnings 688,000 582,000 $69,000 An increase in the accounts receivable account during the year should be reported on the statement of cash flows as: A decrease in cash flows from operating activities A dividend payment to shareholders during the year should be reported on the statement of cash flows as: An decrease in cash flows from financing activities The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $151,000 Cash dividends declared for the year $46,000 Net income for the year $92,000 What is the ending balance for retained earnings? $197,000 Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method: Net income $182,000 Gain on the sale of equipment 12,300 Proceeds from the sale of equipment 92,300 Depreciation expense—equipment 50,000 Payment of bonds at maturity 100,000 Purchase of land 200,000 Issuance of common stock 300,000 Increase in merchandise inventory 35,400 Decrease in accounts receivable 28,800 Increase in accounts payable 23,700 Payment of cash dividends 32,000 $236,800 When preparing a statement of cash flows using the indirect method, which of the following is correct? A loss on the sale of land should be added to net income in the operating activities section. The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is: Investing activities Which of the following is included in the cash flows from financing activities section of the statement of cash flows purchase of treasury stock In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net income for the year was $52,000 Accounts payable decreased by $18,000 Accounts receivable increased by $25,000 Inventories increased by $5,000 Cash dividends paid were $14,000 Depreciation expense was $20,000 Net cash provided by operating activities was: $24,000 The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is Net income A decrease in the inventory account during the year should be reported on the statement of cash flows as: An increase in cash flows from operating activities The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is: Schedule of non-cash investing or financing activity. In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available: Purchase of equipment $260,000 Proceeds from the sale of equipment $87,000 Purchase of land $91,000 Net cash flows from investing activities for the year were $264,000 of net cash used. A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is: $50,000 The statement of cash flows is: A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities. A company had a market price of $27.50 per share, earnings per share of $1.25, and dividends per share of $0.40. Its price-earnings ratio equals: 22.0 The comparison of a company's financial condition and performance to a base amount is known as: Vertical analysis The ability to generate positive market expectations is called: Market prospects Use the following selected information from Wheeler, LLC to determine the 2015 and 2014 common size percentages for cost of goods sold using Net sales as the base. 2015 2014 Net sales $276,200 $231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,820 19,820Use the following selected information from Wheeler, LLC to determine the 2015 and 2014 common size percentages for cost of goods sold using Net sales as the base. 2015 2014 Net sales $276,200 $231,400 Cost of goods sold 151,900 129,590 Operating expenses 55,240 53,240 Net earnings 27,820 19,820 55.0% for 2015 and 56.0% for 2014 Net income divided by net sales is the: Profit margin Refer to the following selected financial information from McCormik, LLC. Compute the company's acid-test ratio for Year 2. Year 2 Year 1 Cash $37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111,750 Net sales 711,000 706,000 Cost of goods sold 390,000 385,500 1.88 Comparative financial statements in which each individual financial statement amount is expressed as a percentage of a base amount are called: Common-size comparative statements The ability to generate future revenues and meet long-term obligations is referred to as: Solvency The ability to provide financial rewards sufficient to attract and retain financing is called: Profitability. In horizontal analysis the percent change is computed by: Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100. Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2. Year 2 Year 1 Cash $37,500 36,850 Short-term investments 90,000 90,000 Accounts receivable, net 85,500 86,250 Merchandise inventory 121,000 117,000 Prepaid expenses 12,100 13,500 Plant assets 388,000 392,000 Accounts payable 113,400 111,750 Net sales 711,000 706,000 Cost of goods sold 390,000 385,500 3.28 Internal users of financial information: Are those individuals involved in managing and operating the company. Current assets divided by current liabilities is the: Current ratio A company's sales in Year 1 were $250,000 and in Year 2 were $287,500. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is: 15% The ability to meet short-term obligations and to efficiently generate revenues is called: Liquidity and efficiency. [Show More]

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