ACC 557 ACC557 Final Exam PART 2 with Answers (Strayer)

ACC 557 ACC557 Final Exam PART 2 with Answers (Strayer)

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  1. The following data are available for Two-off Company.


Increase in accounts payable                            $120,000
Increase in bonds payable                                  300,000
Sale of investments                                           150,000
Issuance of common stock                                 160,000
Payment of cash dividends                                   90,000
 
Net cash provided by financing activities is:

  1. A company had net income of $210,000. Depreciation expense is $27,000. During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively. Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively. There was also a loss on the sale of equipment of $2,000. How much cash was provided by operating activities?
  2. Jean’s Vegetable Market had the following transactions during 2014:
    1. Issued $50,000 of par value common stock for cash.
    2. Repaid a 6 year note payable in the amount of $22,000. 
    3. Acquired land by issuing common stock of par value $100,000.
    4. Declared and paid a cash dividend of $2,000. 
    5. Sold a long-term investment (cost $3,000) for cash of $8,000. 
    6. Acquired an investment in IBM stock for cash of $15,000. 
    What is the net cash provided (used) by investing activities?
  3. The primary purpose of the statement of cash flows is to
  4. Which of the following transactions does not
    affect cash during a period?
  5. Which of the following would be added to net income using the indirect method?
  6. In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as a(n)
  7. If $250,000 of bonds are issued during the year but $130,000 of old bonds are retired during the year, the statement of cash flows will show a(n)
  8. Comanic Corp. has common stock of $5,400,000, retained earnings of $2,000,000, unrealized gains on trading securities of $100,000 and unrealized losses on available-for-sale securities of $200,000.  What is the total amount of its stockholders’ equity?
  9. Blaine Company had these transactions pertaining to stock investments:
    Feb. 1  Purchased 2,000 shares of Norton Company (10%) for $51,000.
    June 1  Received cash dividends of $2 per share on Horton stock.
    Oct. 1  Sold 1,200 shares of Horton stock for $32,400.
    The entry to record the sale of the stock would include a
  10. Changes from cost are reported as part of net income for
  11. The cost method of accounting for long-term investments in stock should be employed when the
  12. A typical investment to house excess cash until needed is
  13. On January 1, 2014, Lark Corporation purchased 35% of the common stock outstanding of Dinc Corporation for $700,000. During 2014, Dinc Corporation reported net income of $200,000 and paid cash dividends of $100,000. The balance of the Stock Investments—Dinc account on the books of Lark Corporation at December 31, 2014 is
  14. Ban Co. purchased 50, 5% Waylan Company bonds for $50,000 cash plus brokerage fees of $500. Interest is payable semiannually on July 1 and January 1. The entry to record the December 31 interest accrual would include a
  15. Viejo Inc. earns $600,000 and pays cash dividends of $150,000 during 2014. Cruz Corporation owns 73,500 of the 210,000 outstanding shares of Viejo.
    What amount should Cruz show in the investment account at December 31, 2014 if the beginning of the year balance in the account was $40,000?
  16. Assume the following sales data for a company:
    2016                               $1,050,000
    2015                                    950,000
    2014                                    800,000
    2013                                    650,000
    If 2013 is the base year, what is the percentage increase in sales from 2013 to 2015?
  17. The ratio that uses weighted average common shares outstanding in the denominator is the
  18. Short-term creditors are usually most interested in evaluating
  19. The following information is available for Oakland Company:
     
                                                               2015                     2014     
    Accounts receivable                $   430,000           $   460,000
    Inventory                                      280,000                320,000
    Net credit sales                         2,670,000             1,600,000
    Cost of goods sold                    1,860,000             1,060,000
    Net income                                   300,000                170,000
     
    The accounts receivable turnover ratio for 2015 is
  20. Vertical analysis is a technique which expresses each item within a financial statement
  21. If a company has an acid-test ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio?
  22. Quasar Corporation had net income of $300,000 and paid dividends to common stockholders of $40,000 in 2015. The weighted average number of shares outstanding in 2015 was 60,000 shares. Quasar Corporation's common stock is selling for $35 per share on the New York Stock Exchange.
  23. Which one of the following would not
    be considered a liquidity ratio?
  24. Each of the following is a liquidity ratio except the

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