ACCULULUI 16. In preparing a Cash Flow Statement, a decrease in a current asset such as Prepaid Rent would represent a, a decrease to cash. b. an increase to cash. c. no effect on cash. d. an increase in revenue. 17. One way analysts measure the ability of a company to meet its obligations is to calculate the times interest earned ratio for any outstanding debt the company may have. How would a company with $100,000 of outstanding bonds paying 8.5% annually and income before interest and taxes of $50,000, calculate the interest coverage (accrual basis) ratio? a. Income before interest and taxes divided by the interest expense. b. Income before interest and taxes divided by carrying value of the bonds outstanding c. Income before interest and taxes divided by the face value on bonds. d. Face value of the bonds divided by income before interest and taxes. 18. A company's balance sheet showed the following amounts for liabilities and stockholders' equity accounts: Current Liabilities, 550,000; Bonds Payable, $600,000: Long-Term Lease Liabilities, $120,000, and Deferred Income Tax Liability, $20,000. Total stockholders' equity was $520,000. What is the debt-to-equity ratio? a. 0.66 b. 0.70 c. 1.42 d. 1.52 19. The term "yield" is synonymous with a. coupon rate. b. market rate. c. contract rate. d. stated rate. 20. Acme Widget paid $2,000 interest on short-term Notes Payable, $10,000 interest on long-term bonds, and $6,000 in dividends on its common stock. Acme would report cash outflows from activities as follows: a. Operating, $2,000; financing. $16,000 b. Operating. $0; financing, $18,000 c. Operating. $12,000; financing, $6,000 d. Operating. $18,000; financing, $0 21. Suppose a corporation issues 5,000 shares of $1 par common stock for $30 per share. In addition to the increase in cash, what effect does this transaction have on the accounting equation? a. Retained earnings increases $150,000. b. Additional Paid-in capital increases $145,000. c. Common stock increases $150,000. d. Gain on stock issuance increases $145,000