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: financial_accounting_exam_4

Question # 00083656
Subject: Accounting
Due on: 08/21/2015
Posted On: 07/22/2015 12:53 AM

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1.

Accounts receivable amounted to $215,000 at the beginning of the year and $245,000 at the end of the

year. Income reported on the income statement for the year was $300,000. The cash flow from operating activities on the cash flow statement using the indirect method is

A.

$315,000.

B.

$270,000.

C.

$300,000.

D.

$330,000.

2.

In a common-size income statement, selling expenses are 55%. This means that they're 55% of

A.

net profit.

B.

net income.

C.

net sales.

D.

gross profit.

3.

Rick Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares of

$20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The preferred stock is

cumulative. How much will be distributed to the preferred and common stockholders on the date of

payment if the preferred stock is $12,000 in arrears?

A.

$20,000 preferred; $20,000 common

B.

$6,000 preferred; $34,000 common

C.

$40,000 preferred; $0 common

D.

$18,000 preferred; $22,000 common

4.

The Isaiah Corporation Stockholders' Equity section includes the following information:

Total par value of the preferred and common stock is

Preferred Stock $22,000

Paid-in Capital in Excess of Par Preferred 2,980

Common Stock 48,000

Paid-in Capital in Excess of Par Common 3,400

Retained Earnings 7,350

A.

$83,730.

B.

$76,380.

C.

$77,350.

D.

$70,000.

5.

Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current

market value of $3,000. Which of the following is not part of the journal entry for this transaction?

A.

Debiting equipment for $3,000

B.

Crediting paid-in capital in excess of par common for $600

C.

Crediting common stock for $3,000

D.

Crediting common stock for $2,400

6.

Which section of the income statement does not report net of income taxes or net of income tax savings?

A.

Continuing operations section

B.

Extraordinary items section

C.

Discontinued operations section

D.

Cumulative effect of changes in accounting principles section

7.

Earnings that a stockholder receives from a corporation are an example of which stockholder right?

A.

Dividends

B.

Liquidation

C.

Preemption

D.

Vote

8.

Casey Company has a $2,400 credit balance in Paid-In Capital Treasury Stock. It sells 500 shares of

treasury stock that the company reacquired at $21/share, for $18/share. After the transaction, what will the balance be in the Paid-In Capital in Excess of Par Treasury account?

A.

$1,500 debit

B.

$900 debit

C.

$900 credit

D.

$3,900 credit

9.

The records of Ashley Boutique showed a net loss of $30,000; depreciation expense of $25,000; and an

increase in supplies on hand of $5,000. The amount of net cash flow from operating activities using the

indirect method is

A.

($15,000).

B.

($10,000).

C.

$20,000.

D.

$15,000.

10.

The Amanda Corporation Stockholders' Equity section includes the following information:

Preferred Stock $12,000

Paid-in Capital in Excess of Par Preferred 2,700

Common Stock 15,000

Paid-in Capital in Excess of Par Common 4,100

What was the total selling price of the preferred stock?

Retained Earnings 8,200

A.

$16,100

B.

$14,700

C.

$20,200

D.

$12,000

11.

Tammy Corporation has 350,000 shares of $3 par common stock outstanding. It has declared a 5%

stock dividend. The current market price of the common stock is $7.50/share. The amount that will be

debited to retained earnings on the date of declaration is

A.

$183,750.

B.

$52,500.

C.

$78,750.

D.

$131,250.

12.

Operating expenses other than depreciation for the year were $335,000. Prepaid expenses

decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement

using the direct method would be

A.

$335,000.

B.

$328,000.

C.

$342,000.

D.

$7,000.

13.

Cost of goods sold for the year was $850,000. Inventory was $60,000 at the beginning of the year and

$90,000 at the end of the year. There were no changes in the amount in accounts payable for the year.

Cash payment for merchandise to be reported under the direct method is

A.

$880,000.

B.

$850,000.

C.

$910,000.

D.

$940,000.

14.

If current assets were $100,000 in 2009 and $88,000 in 2010, what was the amount of increase or

decrease in percentage terms from 2009 to 2010? (Round to the nearest percent.)

A.

Increase of 12%

B.

Decrease of 14%

C.

Decrease of 12%

D.

Increase of 14%

15.

What is the rate of return on common stockholders' equity if sales are $100,000, net income is

$22,700, and average common stockholders' equity is $86,000?

A.

26.4%

B.

86.0%

C.

22.7%

End of exam

D.

The rate of return can't be determined from the information given.

16.

Net sales at Kelly's Bakery increased from $40,000 to $60,000, and its cost of goods sold increased

from $20,000 to $40,000. Vertical analysis based on net sales would show which percentages for cost of

goods sold (rounded to the nearest %)?

A.

50% and 67%

B.

67% and 40%

C.

40% and 20%

D.

10% and 30%

17.

Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and

an accounts payable turnover of 40 days. Casey's cash conversion cycle is _______ day(s).

A.

81

B.

73

C.

1

D.

153

18.

For vertical analysis purposes, the base item on the income statement is

A.

gross profit.

B.

net sales.

C.

total expenses.

D.

net income.

19.

Rick Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares

of $20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The preferred stock is

noncumulative. How much will be distributed to the preferred and common stockholders on the date of

payment?

A.

$6,000 preferred; $34,000 common

B.

$0 preferred; $40,000 common

C.

$34,000 preferred; $6,000 common

D.

$40,000 preferred; $0 common

20.

Brandon Company had extraordinary losses of $150,000. If its corporate tax rate is 30%, at which

amount will the losses be shown on the income statement?

A.

Not enough information is given to answer the question.

B.

$105,000

C.

$45,000

D.

$150,000

Tags financialaccountingexam4 common preferred stock income cash company year capital section shares 0 paidin statement stockholders exce expenses sales equity method accounts corporation increase operating 1 flow days earnings information 2 cost

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Tutorial Preview …excess xx par xxxxxx for $600C xxxxxxxxx common stock xxx $3,000D xxxxxxxxx xxxxxx stock xxx $2,4006 Which xxxxxxx of the xxxxxx statement xxxx xxx report xxx of income xxxxx or net xx income xxx xxxxxxxxx Continuing xxxxxxxxxx sectionB Extraordinary xxxxx sectionC Discontinued xxxxxxxxxx sectionD xxxxxxxxxx xxxxxx of xxxxxxx in accounting xxxxxxxxxx section7 Earnings xxxx a xxxxxxxxxxx xxxxxxxx from x corporation are xx example of xxxxx stockholder xxxxxxx xxxxxxxxxx LiquidationC xxxxxxxxxxx Vote8 Casey xxxxxxx has a xxxxxx credit xxxxxxx xx Paid-In xxxxxxx Treasury Stock xx sells 500 xxxxxx oftreasury xxxxx xxxx the xxxxxxx reacquired at xxxxxxxxxx for $18/share xxxxx the xxxxxxxxxxxx xxxx will xxx balance be xx the Paid-In xxxxxxx in xxxxxx xx Par xxxxxxxx account?A $1,500 xxxxxx $900 debitC xxxx creditD xxxxxx xxxxxxx The xxxxxxx of Ashley xxxxxxxx showed a xxx loss xx xxxxxxxx depreciation xxxxxxx of $25,000; xxx anincrease in xxxxxxxx on xxxx xx $5,000 xxx amount of xxx cash flow xxxx operating xxxxxxxxxx xxxxx theindirect xxxxxx isA ($15,000) x ($10,000) C xxxxxxx D xxxxxxx xx The xxxxxx Corporation Stockholders' xxxxxx section includes xxx following xxxxxxxxxxxxxxxxxxxxx xxxxx…
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Preview: Inventory xxx $60,000 xx the beginning xx the year xxx $90,000 xx xxx end xx the year xxxxx were no xxxxxxx in xxx xxxxxx in xxxxxxxx payable for xxx year Cash xxxxxxx for xxxxxxxxxxx xx be xxxxxxxx under the xxxxxx method isA xxxxxxxx B xxxxxxxx x $910,000 x $940,000  14 xxx current assets xxxx $100,000 xx xxxx and xxxxxxx in 2010, xxxx was the xxxxxx of xxxxxxxx xx decrease xx percentage terms xxxx 2009 to xxxxx (Round xx xxx nearest xxxxxxx )A Increase xx 12%B Decrease xx 14%C xxxxxxxx xx 12%D xxxxxxxx of 14% 15 xxxxx is the xxxx of xxxxxx xx common xxxxxxxxxxxxx equity if xxxxx are $100,000, xxx income xxxxxxxxxx xxx average xxxxxx stockholders' equity xx $86,000?A 26 xxx 86 xxx xx 7%D xxx rate of xxxxxx can't be xxxxxxxxxx from xxx xxxxxxxxxxx given xxxxxx ANet sales xx Kelly's Bakery xxxxxxxxx from xxxxxxx xx $60,000, xxx its cost xx goods sold xxxxxxxxx from xxxxxxx xx $40,000 xxxxxxxx analysis based xx net sales xxxxx show xxxxx xxxxxxxxxxx for xxxx of goods xxxx (rounded to xxx nearest xxxx xxx and xxxx 67% and xxxx 40% and xxxx 10% xxx xxxxxxxxx .....
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