Reference no: EM132450405

Questions -

Question 1 - Which of the following is an operating activity?

a. Payment of a cash dividend

b. Sale of equipment

c. Making a loan to another entity

d. Payment of interest

Question 2 - Which is an example of a cash flow from an investing activity?

a. Receipt of cash from the issuance of bonds payable

b. Payment of cash to repurchase outstanding capital stock

c. Receipt of cash from the sale of equipment

d. Payment of cash to suppliers for inventory

Question 3 - Hanover, Inc. purchased land through the issuance of long-term bonds. How is this reported on the statement of cash flows?

a. Operating activity

b. Significant noncash investing and financing activity that merits disclosure

c. Financing outflow

d. Investing inflow

Question 4 - Under the indirect method of preparing the statement of cash flows, which of the following is added to net income in the operating activities section?

a. Gain on sale of equipment

b. Depreciation expense

c. Decrease in accounts payable

d. Increase in accounts receivable

Question 5 - In what section of the statement of cash flows will the issuance of bonds payable to acquire a building be reported?

a. Cash flows from operating activities

b. Cash flows from investing activities

c. Cash flows from financing activities

d. Noncash investing and financing activities

Question 6 - Which of the following items is reported in the operating activities section of a statement of cash flows prepared using the direct method?

a. Cash payments to suppliers

b. Loss on sale of building

c. Depreciation expense

d. Increase in accounts receivable

Question 7 - In horizontal analysis of a balance sheet, of what amount is each item expressed as a percentage?

a. Current year net income amount

b. Base-year amount

c. Current year stockholders' equity amount

d. Current year total assets amount

Question 8 - The following schedule is a display of what type of analysis?

	Amount	Percent
Current assets	$200,000	25%
Property, plant, and equipment	600,000	75%
Total assets	$800,000	100%

a. Trend analysis

b. Vertical analysis

c. Ratio analysis

d. Horizontal analysis

Question 9 - Ceradyne, Inc. presented the following data for a company:

Current liabilities $360

Long-term debt 480

Common stock 640

Retained earnings 520

Total liabilities & stockholders' equity $2,000

How would common stock appear on a common size balance sheet using vertical analysis?

a. 32.0%

b. Cannot be determined from the data given

c. 55.1%

d. 75.0%

Question 10 - Use the following financial statement information as of the end of each year to answer this question.

	2017	2016
Inventory	$54,000	$48,000
Current assets	81,000	106,000
Total assets	392,000	336,000
Current liabilities	27,000	36,000
Total liabilities	102,000	88,000
Total stockholders' equity	290,000	248,000
Preferred stock	10,000	10,000
Net sales	784,000	697,000
Cost of goods sold	306,000	277,000
Net income	34,000	90,000
Tax expense	22,000	18,000
Interest expense	12,000	12,000
Dividends paid to preferred stockholders	2,000	2,000
Dividends paid to common shareholders	1,000	1,000

Compute the profit margin for 2017.

a. 8.4%

b. 4.3%

c. 11.7%

d. 8.9%