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Quiz Appendix B-1 Financial Accounting for MBAs, 5th Edition

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Question;Cambridge Business Publishers, ?2013;Quiz Appendix B-1 Financial Accounting for MBAs, 5th Edition;Appendix B ? Financial Accounting for MBAs, 5;th edition by Easton, Wild, Halsey & McAnally;Practice Quiz;1. A firm uses the indirect method for cash flows. Using the;following information, what is its net;cash flow from operating activities?;Net income ???????????.?? $90,000;Accounts receivable decrease ???.?.. 15,000;Inventory increase ?????????? 10,000;Accounts payable decrease ?????? 5,000;Income tax payable increase..????? 1,000;Depreciation expense ????????.. 8,000;a. $ 90,000;b. $ 69,000;c. $119,000;d. $ 99,000;2. The following information was obtained from Georgia;Company?s comparative balance sheets.;Assume that Georgia Company?s 2012 income statement showed;depreciation expense of;$4,000, a gain on sale of investments of $10,000, and a net;income of $50,000. Calculate the net;cash flow from operating activities using the indirect;method.;Dec. 31, 2012 Dec. 31, 2011;Cash ??????????. $ 20,000 $ 10,000;Accounts receivable ???.. 40,000 37,000;Inventory ????????.. 50,000 45,000;Prepaid rent ??????? 5,000 7,000;Long-term investments ??. 20,000 34,000;Plant assets ???????. 150,000 100,000;Accumulated depreciation ?. 50,000 46,000;Accounts payable ????... 25,000 20,000;Income tax payable ???? 5,000 6,000;Common stock ?????? 121,000 100,000;Retained earnings ????.. 84,000 61,000;a. $42,000;b. $52,000;c. $43,000;d. $34,000Cambridge Business Publishers, ?2013;Quiz Appendix B-2 Financial Accounting for MBAs, 5th Edition;3. Count Company had a $25,000 net loss from operations for;2012. Depreciation expense for;2012 was $9,000 and a 2012 cash dividend of $5,000 was;declared and paid. Balances of the;current asset and current liability accounts at the;beginning and end-of 2012 follow. Calculate the;net cash flow from operating activities using the indirect;method.;Ending Beginning;Cash ??????????. $ 4,000 $ 8,000;Accounts receivable ???.. 10,000 20,000;Inventory ????????.. 45,000 50,000;Prepaid expenses..???? 5,000 10,000;Accounts payable ????... 15,000 10,000;Accrued liabilities ????? 5,000 8,000;a. $56,000;b. $16,000;c. $ 6,000;d. ($ 4,000);4. Calculate the cash flow for the following;Cash paid for merchandise purchased;Cost of goods sold ??????????. $100,000;Inventory, beginning year ???.??.?.. 20,000;Inventory, end of year ????????? 23,000;Accounts payable, beginning year ???.. 12,000;Accounts payable, end of year ????.... 6,000;a. $109,000;b. $91,000;c. $97,000;d. $103,000Cambridge Business Publishers, ?2013;Quiz Appendix B-3 Financial Accounting for MBAs, 5th Edition;5. Use the following information about Can Corporation for;2012.;Accounts payable increase ??????????? $10,000;Accounts receivable increase ?????????? 5,000;Accrued liabilities decrease ??????????? 4,000;Amortization expense ?????????????.. 7,000;Cash paid as dividends ????????????... 30,000;Cash paid to purchase land ??????????? 85,000;Cash paid to retire bonds payable at par ?????. 55,000;Cash received from issuance of common stock ??. 40,000;Cash received from sale of equipment ??????. 20,000;Depreciation expense ?????????????. 30,000;Gain on sale of equipment ???????????. 5,000;Inventory decrease ?????????????.?. 12,000;Net income ?????????????????? 75,000;Prepaid expenses increase ??????????? 1,000;What is the net cash flow from investing activities?;a. ($73,000);b. ($65,000);c. ($85,000);d. $20,000;6. Use the following information about the 2012 cash flows;of Thomas Corporation to compute the;net cash flow from financing.;Cash paid to employees and suppliers ???.. $150,000;Cash received from sale of land ??????.. 50,000;Cash paid to acquire treasury stock ????? 12,000;Cash received as interest ?????????. 7,000;Cash paid as income taxes ????????.. 12,000;Cash paid to purchase equipment ?????.. 90,000;Cash received from customers ???????. 200,000;Cash received from issuing bonds payable ?? 33,000;Cash paid as dividends ??????????.. 19,000;a. $ 21,000;b. $ 14,000;c. $ 2,000;d. ($31,000);7. During 2012, Loda Corporation?s long-term investments account;(at cost) increased $30,000;which was the net result of purchasing stocks costing;$160,000 and selling stocks costing;$130,000 at a $12,000 loss. Also, its bonds payable account;decreased $80,000, the net result;of issuing $200,000 of bonds at $206,000 and retiring bonds;with a face value (and book value) of;$280,000 at an $18,000 gain. Calculate Loda?s net cash flow;from investing activities for 2012.;a. ($42,000);b. ($30,000);c. ($98,000);d. $160,000Cambridge Business Publishers, ?2013;Quiz Appendix B-4 Financial Accounting for MBAs, 5th Edition;8. Fox Company?s income statement and comparative balance;sheets follow.;Fox Company;Income Statement;For Year Ended December 31, 2012;Sales ??????????. $1,270,000;Cost of goods sold ????. $860,000;Wages expense ?????.. 172,000;Insurance expense..???.. 16,000;Depreciation expense ??... 34,000;Interest expense ????? 18,000;Income tax expense ???.. 58,000 1,158,000;Net income ???????.. $ 112,000;Fox Company;Balance Sheets;Dec. 31, 2012 Dec. 31, 2012;Assets;Cash ?????????????... $ 22,000 $ 10,000;Accounts receivable ??????? 82,000 64,000;Inventory ???????????? 180,000 120,000;Prepaid insurance ???????? 10,000 14,000;Plant assets ??????????.. 500,000 390,000;Accumulated depreciation ????.. (136,000) (102,000);Total assets ??????????.. $658,000 $496,000;Liabilities and Stockholders Equity;Accounts payable ????????. $ 14,000 $ 20,000;Wages payable ?????????. 18,000 12,000;Income tax payable ???????. 14,000 16,000;Bonds payable ?????????. 260,000 150,000;Common stock ?????????. 180,000 180,000;Retained earnings ???????? 172,000 118,000;Total liabilities and equity ????? $658,000 $496,000;Cash dividends of $58,000 were declared and paid during;2012. Also in 2012, plant assets were;purchased for cash, and bonds payable were issued for cash.;Bond interest is paid semiannually;on June 30 and December 31. Accounts payable relate to;merchandise purchases. Compute;the net cash flow from financing activities for 2012.;a. $ 110,000;b. ($ 58,000);c. ($110,000);d. $ 52,000Cambridge Business Publishers, ?2013;Quiz Appendix B-5 Financial Accounting for MBAs, 5th Edition;9. Polar Company?s income statement and comparative balance;sheets follow.;Polar Company;Income Statement;For Year Ended December 31, 2012;Sales ??????????. $1,456,000;Cost of goods sold ????. $1,068,000;Wages expense ?????.. 380,000;Advertising expense..??... 62,000;Depreciation expense ??... 44,000;Interest expense ????? 36,000;Gain on sale of land ???.. (50,000) 1,540,000;Net loss ???????.?.. $ (84,000);Polar Company;Balance Sheets;Dec. 31, 2012 Dec. 31, 2012;Assets;Cash ?????????????... $ 98,000 $ 56,000;Accounts receivable ??????? 84,000 100,000;Inventory ???????????? 214,000 226,000;Prepaid advertising ???????.. 20,000 26,000;Plant assets ??????????.. 720,000 444,000;Accumulated depreciation ????.. (156,000) (112,000);Total assets ??????????.. $980,000 $740,000;Liabilities and Stockholders Equity;Accounts payable ????????. $ 34,000 $ 62,000;Interest payable ?????..???. 12,000 ---;Bonds payable ?????????. 400,000 ---;Common stock ?????????. 490,000 490,000;Retained earnings ???????? 104,000 188,000;Treasury stock ?????????.. (60,000) ---;Total liabilities and equity ????? $980,000 $740,000;During 2012, Polar sold land for $140,000 cash that had;originally cost $90,000. Polar also;purchased equipment for cash, acquired treasury stock for;cash, and issued bonds payable for;cash in 2012. Accounts payable relate to merchandise;purchases.;Calculate Polar?s net cash flow from investing activities;for 2012.;a. $ 140,000;b. $ 50,000;c. ($276,000);d. ($226,000)Cambridge Business Publishers, ?2013;Quiz Appendix B-6 Financial Accounting for MBAs, 5th Edition;10. Locker Company?s income statement and comparative;balance sheets follow.;Locker Company;Income Statement;For Year Ended December 31, 2012;Sales ???????????????. $1,400,000;Cost of goods sold ?????????.. $880,000;Wages and other operating expenses.... 190,000;Depreciation expense ??...................... 44,000;Amortization expense ????????. 14,000;Interest expense ?????????..? 20,000;Income tax expense ????????? 72,000;Loss of bond retirement ???????.. 10,000 1,230,000;Net income ???????????..?.. $ 170,000;Locker Company;Balance Sheets;Dec. 31, 2012 Dec. 31, 2011;Assets;Cash ?????????????... $ 54,000 $ 36,000;Accounts receivable ??????? 106,000 96,000;Inventory ???????????? 206,000 218,000;Prepaid expenses ????..???.. 24,000 20,000;Plant assets ??????????.. 720,000 672,000;Accumulated depreciation ????.. (174,000) (168,000);Intangible assets ????????.. 86,000 100,000;Total assets ??????????.. $1,022,000 $974,000;Liabilities and Stockholders Equity;Accounts payable ????????. $64,000 $52,000;Interest payable ?????..???. 8,000 14,000;Income tax payable ???????. 12,000 16,000;Bonds payable ?????????.. 120,000 240,000;Common stock ?????????. 504,000 456,000;Retained earnings ???????? 314,000 196,000;Total liabilities and equity ????? $1,022,000 $974,000;During 2012, the company sold for $34,000 cash old equipment;that had cost $72,000 and had;$38,000 accumulated depreciation. Also in 2012, new;equipment worth $120,000 was acquired;in exchange for $120,000 of bonds payable, and bonds payable;of $240,000 were retired for cash;at a loss. A $52,000 cash dividend was declared and paid in;2012. Any stock issuances were for;cash.;Calculate Locker?s net cash flow from financing activities;for 2012.;a. ($250,000);b. ($254,000);c. $ 48,000;d. ($ 52,000)

 

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