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Financial Accounting Appendix B Practice Quiz

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Question;1. A firm uses the indirect method for cash flows. Using the following information, what is its netcash flow from operating activities?Net income.Accounts receivable decrease...Inventory increaseAccounts payable decreaseIncome tax payable increase..Depreciation expense..a.b.c.d.$90,00015,00010,0005,0001,0008,000$ 90,000$ 69,000$119,000$ 99,0002. The following information was obtained from Georgia Companys comparative balance sheets.Assume that Georgia Companys 2012 income statement showed depreciation expense of$4,000, a gain on sale of investments of $10,000, and a net income of $50,000. Calculate the netcash flow from operating activities using the indirect method.Cash.Accounts receivable..Inventory..Prepaid rentLong-term investments.Plant assets.Accumulated depreciation.Accounts payable...Income tax payableCommon stockRetained earnings..a.b.c.d.Dec. 31, 2012$ 20,00040,00050,0005,00020,000150,00050,00025,0005,000121,00084,000Dec. 31, 2011$ 10,00037,00045,0007,00034,000100,00046,00020,0006,000100,00061,000$42,000$52,000$43,000$34,000Cambridge Business Publishers, 2013Quiz Appendix B-1Financial Accounting for MBAs, 5th Edition3. Count Company had a $25,000 net loss from operations for 2012. Depreciation expense for2012 was $9,000 and a 2012 cash dividend of $5,000 was declared and paid. Balances of thecurrent asset and current liability accounts at the beginning and end-of 2012 follow. Calculate thenet cash flow from operating activities using the indirect method.Cash.Accounts receivable..Inventory..Prepaid expenses..Accounts payable...Accrued liabilitiesa.b.c.d.Ending$ 4,00010,00045,0005,00015,0005,000Beginning$ 8,00020,00050,00010,00010,0008,000$56,000$16,000$ 6,000($ 4,000)4. Calculate the cash flow for the following:Cash paid for merchandise purchased:Cost of goods sold.Inventory, beginning year....Inventory, end of yearAccounts payable, beginning year..Accounts payable, end of year....a.b.c.d.$100,00020,00023,00012,0006,000$109,000$91,000$97,000$103,000Cambridge Business Publishers, 2013Quiz Appendix B-2Financial Accounting for MBAs, 5th Edition5. Use the following information about Can Corporation for 2012.Accounts payable increaseAccounts receivable increaseAccrued liabilities decreaseAmortization expense..Cash paid as dividends...Cash paid to purchase landCash paid to retire bonds payable at par.Cash received from issuance of common stock.Cash received from sale of equipment.Depreciation expense.Gain on sale of equipment.Inventory decrease..Net incomePrepaid expenses increase$10,0005,0004,0007,00030,00085,00055,00040,00020,00030,0005,00012,00075,0001,000What is the net cash flow from investing activities?a. ($73,000)b. ($65,000)c. ($85,000)d. $20,0006. Use the following information about the 2012 cash flows of Thomas Corporation to compute thenet cash flow from financing.Cash paid to employees and suppliers..Cash received from sale of land..Cash paid to acquire treasury stockCash received as interest.Cash paid as income taxes..Cash paid to purchase equipment..Cash received from customers.Cash received from issuing bonds payableCash paid as dividends..a.b.c.d.$150,00050,00012,0007,00012,00090,000200,00033,00019,000$ 21,000$ 14,000$ 2,000($31,000)7. During 2012, Loda Corporations 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 resultof 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 Lodas net cash flow from investing activities for 2012.a.b.c.d.($42,000)($30,000)($98,000)$160,000Cambridge Business Publishers, 2013Quiz Appendix B-3Financial Accounting for MBAs, 5th Edition8. Fox Companys income statement and comparative balance sheets follow.Fox CompanyIncome StatementFor Year Ended December 31, 2012Sales.Cost of goods sold.Wages expense..Insurance expense....Depreciation expense...Interest expenseIncome tax expense..Net income..$1,270,000$860,000172,00016,00034,00018,00058,0001,158,000$ 112,000Fox CompanyBalance SheetsDec. 31, 2012Dec. 31, 2012AssetsCash...Accounts receivableInventoryPrepaid insurancePlant assets..Accumulated depreciation..Total assets..$ 22,00082,000180,00010,000500,000(136,000)$658,000$ 10,00064,000120,00014,000390,000(102,000)$496,000Liabilities and Stockholders EquityAccounts payable.Wages payable.Income tax payable.Bonds payable.Common stock.Retained earningsTotal liabilities and equity$ 14,00018,00014,000260,000180,000172,000$658,000$ 20,00012,00016,000150,000180,000118,000$496,000Cash dividends of $58,000 were declared and paid during 2012. Also in 2012, plant assets werepurchased for cash, and bonds payable were issued for cash. Bond interest is paid semiannuallyon June 30 and December 31. Accounts payable relate to merchandise purchases. Computethe net cash flow from financing activities for 2012.a.b.c.d.$ 110,000($ 58,000)($110,000)$ 52,000Cambridge Business Publishers, 2013Quiz Appendix B-4Financial Accounting for MBAs, 5th Edition9. Polar Companys income statement and comparative balance sheets follow.Polar CompanyIncome StatementFor Year Ended December 31, 2012Sales.Cost of goods sold.Wages expense..Advertising expense.....Depreciation expense...Interest expenseGain on sale of land..Net loss...$1,456,000$1,068,000380,00062,00044,00036,000(50,000)1,540,000$ (84,000)Polar CompanyBalance SheetsDec. 31, 2012Dec. 31, 2012AssetsCash...Accounts receivableInventoryPrepaid advertising..Plant assets..Accumulated depreciation..Total assets..$ 98,00084,000214,00020,000720,000(156,000)$980,000$ 56,000100,000226,00026,000444,000(112,000)$740,000Liabilities and Stockholders EquityAccounts payable.Interest payable...Bonds payable.Common stock.Retained earningsTreasury stock..Total liabilities and equity$ 34,00012,000400,000490,000104,000(60,000)$980,000$ 62,000----490,000188,000--$740,000During 2012, Polar sold land for $140,000 cash that had originally cost $90,000. Polar alsopurchased equipment for cash, acquired treasury stock for cash, and issued bonds payable forcash in 2012. Accounts payable relate to merchandise purchases.Calculate Polars net cash flow from investing activities for 2012.a.b.c.d.$ 140,000$ 50,000($276,000)($226,000)Cambridge Business Publishers, 2013Quiz Appendix B-5Financial Accounting for MBAs, 5th Edition10. Locker Companys income statement and comparative balance sheets follow.Locker CompanyIncome StatementFor Year Ended December 31, 2012Sales.Cost of goods sold..Wages and other operating expenses....Depreciation expense......................Amortization expense.Interest expense..Income tax expenseLoss of bond retirement..Net income....$1,400,000$880,000190,00044,00014,00020,00072,00010,0001,230,000$ 170,000Locker CompanyBalance SheetsDec. 31, 2012Dec. 31, 2011AssetsCash...Accounts receivableInventoryPrepaid expenses....Plant assets..Accumulated depreciation..Intangible assets..Total assets..$54,000106,000206,00024,000720,000(174,000)86,000$1,022,000$ 36,00096,000218,00020,000672,000(168,000)100,000$974,000Liabilities and Stockholders EquityAccounts payable.Interest payable...Income tax payable.Bonds payable..Common stock.Retained earningsTotal liabilities and equity$64,0008,00012,000120,000504,000314,000$1,022,000$52,00014,00016,000240,000456,000196,000$974,000During 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 acquiredin exchange for $120,000 of bonds payable, and bonds payable of $240,000 were retired for cashat a loss. A $52,000 cash dividend was declared and paid in 2012. Any stock issuances were forcash.Calculate Lockers net cash flow from financing activities for 2012.a. ($250,000)b. ($254,000)c. $ 48,000d. ($ 52,000)

 

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