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Exam: 061555RR - Corporations-R&R Heating, Inc. has 350,000 shares of $3-par common stock outstanding




Question;Exam: 061555RR - Corporations1.R&R Heating, Inc. has 350,000 shares of $3-par common stock outstanding. They have declared a 5%stock dividend. The current market price of the common stock is $7.50 per share. The amount that will becredited to common stock on the date of declaration isA.$183,750.B.$78,750.C.$131,250.D.$52,500.2.An example of a cash outflow from investing activities isA.the purchase of treasury stock.B.making a loan to another company.C.issuance of a note payable.D.paying cash dividends.3._______ is added back to net income in the operating section of an indirect cash flow statement.A.A decrease in accounts payableB.An increase in inventoryC.DepreciationD.An increase in accounts receivable4.Which isnota value placed on a certificate for a share of the company's stock?A.ParB.Market valueC.No parD.Stated value5.Which of the following causes the decrease of the par value of a company's stock?A.Stock splitB.Sale of additional stockC.Cash dividendD.Stock dividend6.Which isnotincluded in paid-in capital?A.Additional Paid-in CapitalB.Common StockC.Preferred StockD.Cash7.For the years 2011, 2012, and 2013, the sales of Red Line, Inc. are $40,000, $60,000 and $80,000,respectively. If 2011 is the base year, the trend percentage for 2012 wasA.200%.B.0%.C.133%.D.150%.8.Which of the following isnota part of financing activities?A.Buying landB.Paying off loansC.Paying dividendsD.Issuing stock9.Tucker Enterprises' Accounts Receivable increased by $48,000, and its Accounts Payable increased by$27,000. What is the net effect on cash from operations under the indirect method?A.?$21,000B.+$75,000C.?$75,000D.+$21,00010.The statement of cash flows reports the sources and uses of cash from all of the followingexcept_______ activities.A.managerialB.investingC.operatingD.financing11.Haskins, Inc. sells 1,000 shares of $12 par common stock for $20 per share. The journal entry isA.debit Cash $12,000, credit Common Stock $12,000.B.debit Cash $20,000, credit Common Stock $12,000, credit Paid-In Capital in Excess of Par-Common Stock $8,000.C.debit Cash $12,000, debit Paid-In Capital in Excess of Par?Common $8,000, credit Common Stock $20,000.D.debit Cash $20,000, credit Common Stock $20,000.12.A company sold an asset with a book value of $56,000 for $35,000 cash. Which of the following is atruestatement?A.Loss on sale equals $56,000 and Cash inflow equals $56,000.B.Loss on sale equals $35,000 and Cash inflow equals $21,000.C.Loss on sale equals $35,000 and Cash inflow equals $35,000.D.Loss on sale equals $21,000 and Cash inflow equals $35,000.13.Eagle Ridge, Inc. issued 40 shares of $20 par value stock to its accountant in full payment for her $900fee for assisting in setting up the new company. The entry for the issuance of the stock is to Common Stock for $ to Common Stock for $800.C.debit to Paid-in Capital in Excess of Par?Common for $100.D.debit to Common Stock for $800.14.Hanna Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days, andan accounts receivable turnover of 82 days. Hanna's cash conversion cycle isA.103 days.B.9 days.C.43 days.D.121 days.15.The debt ratio is the relationship assets and total liabilities.B.current assets and current liabilities.C.current assets and total assets and current liabilities.16.Motor Works, Inc. has declared a $20,000 cash dividend to shareholders. The company has 5,000shares of $15-par, 10% preferred stock and 10,000 shares of $20-par common stock. The preferred stockis cumulative. How much will be distributed to the preferred and common stockholders on the date ofpayment if the preferred stock is $8,000 in arrears?A.$8,000 preferred, $12,000 commonB.$7,500 preferred, $12,500 commonC.$15,500 preferred, $4,500 commonD.$20,000 preferred, $0 common17.Of the following, which isnotclassified as an investing activity on the statement of cash flows?A.Sale of equipment for cashB.Collecting the principal on loansC.Purchasing landD.Selling goods and services18.Tucker, Inc.'s net sales decreased from $90,000 in year one to $45,000 in year two, and its cost ofgoods sold decreased from $30,000 in year one to $20,000 in year two. The vertical analysis based onsales for cost of goods sold for the two periods (rounded to nearest tenth of a percent) isA.225% and 300%.B.300% and 225%.C.33.3% and 44.4%.End of examD.44.4% and 33.3%.19.Operating activities are transactions and events associated with selling a product or providing a servicerelated to theA.assets and liabilities reported on the balance sheet.B.revenues and expenses reported on the income income reported on the statement of retained earnings.D.retained earnings reported on the balance sheet.20.Fine Furniture Company had a net income of $50,000. Accounts receivable increased by $30,000,inventory decreased by $20,000, amounts payable increased by $4,000, and salaries payable decreased by$1,000. The amount of cash flow from continuing operating activities under the indirect method isA.$37,000.B.$43,000.C.$65,000.D.$55,000.


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