What was the ending permanent account balance

Reference no: EM131881475

Question: 1. A creditor is reviewing Hoffman Electronics' statements of retained earnings for the last 3 years. The creditor is trying to determine whether a substantial loan should be given to Hoffman Electronics. Which question will most likely be answered by reviewing the statement of retained earnings?

a. Does Hoffman Electronics make risky investments that impede the cash flow of the firm?

b. What was the ending permanent account balance for Hoffman Electronics last quarter?

c. What assets owned by Hoffman Electronics are valuable enough to cover debt repayment?

d. Does Hoffman Electronics have enough earnings to pay both dividends and debts?

2. True or false. By reviewing a company's statement of retained earnings over multiple reporting periods, an investor can evaluate the company's future growth potential based on net income changes.

3. A creditor would most likely be interested in reviewing a firm's statement of retained earnings to determine if the firm

a. exhibits liquidity.

b. can repay its debt obligations.

c. makes risky investments.

d. has sufficient receivables.

4. On statement of cash flow, the repayment of loans is categorized as a cash flow from ____activities.

a. operating

b. financing

5. "Fill in the blank" question: select the correct answer.

In a statement of cash flows, cash inflows that result from providing goods to customers are included in the section called "cash flows from_______ activities.

a. investing

b. operating

c. sales

d. investing

6. Creditors want to know whether Photon, Inc. uses its available cash to purchase new equipment. Which section of the statement of cash flows would provide this information?

a. Cash flows from operating activities

b. Cash flows from sales activities

c. Cash flows from financing activities

d. Cash flows from investing activities

7. Creditors are examining the statement of cash flows for Photon, Inc. Which of the following questions can be answered by reviewing the statement of cash flows?

a. What is the average net income of Photon?

b. What type of assets does Photon possess?

c. Does Photon reset its temporary accounts?

d. Does Photon pay its bills when they are due?

Reference no: EM131881475

Questions Cloud

Future international expansion strategy in czech republic : Identify a potentially attractive target market for the Aldi's future international expansion strategy in Czech Republic using PESTEL analysis

Distinguish between ratio analysis and percentage analysis : Distinguish between ratio analysis and percentage analysis relative to the interpretation of financial statements.

Compute the total labor variance : August, 40,800 hours of labor are incurred at a cost of $12.10 per hour to produce 10,000 units of Product DD. Compute the total labor variance

Advantages of the inclusion of supply management : 1. Prepare a list of advantages of the inclusion of supply management and prequalified suppliers.

What was the ending permanent account balance : A creditor is reviewing Hoffman Electronics' statements of retained earnings for the last 3 years. The creditor is trying to determine whether a substantial.

What is the share of each partner on the capital : On January 1, Don and Goldman had a capital balance of $17,000.00 and $34,000 respectively. What is the share of each partner on the capital?

Calculate the fixed and variable costs : A company incurred $40,000 of common fixed costs and $60,000 of common variable costs. Calculate the fixed and b) variable costs allocated to Department A

Compute cost of both options : Before any calculations, project the cost/value of BOTH the call option and the put option. Explain how you come up with your answer.

What amount of interest expense may the franklins deduct : What amount of interest expense may the Franklins deduct in year 3 on this loan (the Franklins do not use the loan proceeds to improve the home)?

User Account

All Pages