I attached the original No. 36-40 Byfort Company reports the following in its financial statements: *All sales are on credit. 36. How much did the company collect in cash from debtors during 2006? A. $445,389K B. $454,611K C. $484,289K D. $488,900K How much sales would have been reported by the company in 2006 if Byfort would have been using cash accounting and not accrual accounting? A. $445,389K B. $454,611K C. $484,289K D. $488,900K 33. Which of the following does not represent future expected cash inflows? A. accounts receivable B. prepaid expenses C. inventory D. notes receivable 31. Two otherwise equal companies have significantly different dividend payout ratios. Which of the following statements is most likely to be correct? The company with higher the dividend payout ratio: A. will have a higher inventory turnover ratio. B. will have a lower inventory turnover ratio. C. will have higher earnings growth. D. will have lower earnings growth.

The following information should be used to according to the provisions of SFAS 95 (Statement of Cash flows) and using the following data. Net Income Provision for bad debts Increase in Inventory Increase in accounts payable Purchase of new equipment Sale of equipment for a $7,000 gain Depreciation Expense Repurchase of common stock Payment of dividend Interest payment 1. What is net cash flow from operations? 2. What is net cash flow from investing? 3. What is net cash flow from financing? 1. 1 What is change in cash? $150,000 $4,000 $3000 $4,000 $20,000 $25,000 $10,000 $15,000 $7,000 $6,000 5. Which of the following would be considered a use of cash? A. depreciation B. an increase in working capital C. sale of bonds D. an increase in wages payable 6. Which of the following is likely to be the most informative source if you were interested in a company's business plan or strategy? A. Auditor's letter B. Management discussion and analysis C. Proxy statement D. Footnotes 7. Which of the following would not be considered a source of financing? A. Notes receivable B. Common stockholders' equity C. Retained earnings D. Debentures 8. While determining the most profitable company from the given number of companies, which of the following would be the best indicator of relative profitability? A. Highest net income B. Highest retained earnings C. Highest return on equity D. Highest operating margin Following is some financial information for Dell Inc. 2 9. What is Dell's profit margin for 2005? A. 6.27% B. 6.18% C. 6.38% D. 6.86% 10. What is Dell's profit margin for 2006? A. 6.27% B. 6.18% C. 6.38% D. 6.86% 11. What is Dell's P/E ratio for 2006? A. 27.63 B. 12.81 C. 23.65 D. 9.70 12. What is Dell's asset turnover for 2006? A. 2.12 B. 3.58 C. 3.65 D. 2.31 13. Which of the following is not considered an intangible asset? A. Goodwill B. Customer lists C. Prepaid advertising expenses D. Memberships 14. Which of the following is not a form of earnings management? A. Changes in accounting assumptions B. Timing revenue recognition C. Write-downs of operating assets D. Reporting fictitious transactions 3 15. A growing company with disappointing profitability would generally have A. High price/book and high price/earnings B. High price/book and low price/earnings C. Low price/book and high price/earnings D. Low price/book and low price/earnings 16. Which of the following factors is least likely to affect earnings persistence? A. Changing price levels B. Extraordinary items C. Usual operating costs D. Accounting methods used 17. Depreciation is based on the principle of: A. allocation. B. appropriation. C. estimation. D. approbation. 18. Goodwill is: A. the excess of the purchase price of net assets over the book value of net assets. B. the excess of the appraised value of net assets over the book value of net assets. C. the excess of the purchase price of net assets over the fair value of net assets. D. the excess of the appraised value of net assets over the fair value of net assets. 4 You have been provided the following information about Wert Inc. 19. Return on Assets for 2006 is: A. 13.71% B. 12.68% C. 10.77% D. 13.21% 20. Which of the following will increase the sustainable equity growth of a company, all other things equal? A. Increase dividend payout B. Pay suppliers more quickly C. Pay suppliers more slowly D. Decrease dividend payout 21. Imagine FASB passes a new rule that required the capitalization of R&D. The effect for a drug company would be to: A. Increase its current ratio B. Decrease debt/equity ratio C. Decrease working capital D. Improve asset turnover You have been provided the following information about High Inc. 22. Working Capital for 2005 is: A. $56,000 B. $20,000 C. $151,000 D. $207,000 5 23. Owner's Equity for 2006 is: A. $20,000 B. $154,000 C. $174,000 D. $207,000 24. Current Ratio for 2005 is: A. 1.55 B. 1.51 C. 1.50 D. 1.14 25. Return on Common Equity for 2006 is: A. 15.46% B. 24.14% C. 16.79% D. 22.04% 26. Which of the following are correct? I. If a company uses straight-line depreciation for financial reporting purposes, it is very likely they have a deferred tax liability with respect to its depreciable assets. II. Straight line depreciation yields an increasing rate of return on book value over the life of asset. III. Straight line depreciation results in lower tax payments than accelerated depreciation methods over the life of an asset. IV. If a company revises its estimate of the useful life of an asset upwards this will decrease annual depreciation expense. A. I, II, III and IV B. I, II and IV C. I, II and III D. I and IV 27. Which of the following is true? Depreciation: A. is recorded so that net book value represents fair value of assets B. does not affect the amount of cash realized from operations as it is a non-cash flow C. is added back to net income to calculate cash from operations under the direct method D. represents a fund from which to purchase future assets 28. Which of the following would not be found listed as a liability on a company's balance sheet? 6 A. Operating lease obligations B. Capital lease obligations C. Bonds payable D. Taxes payable 29. To determine a company's sustainable earning power, an analyst needs to first determine the recurring component of the current period's accounting income by excluding nonrecurring components of accounting income. Such adjusted earnings are often referred to as: A. core earnings. B. permanent earnings. C. basic earnings. D. operating earnings. 30. The two primary qualities of accounting information to make it useful for decision making are: A. reliability and comparability. B. relevance and reliability. C. materiality and comparability. D. full disclosure and relevance. 31. Two otherwise equal companies have significantly different dividend payout ratios. Which of the following statements is most likely to be correct? The company with higher the dividend payout ratio: A. will have a higher inventory turnover ratio. B. will have a lower inventory turnover ratio. C. will have higher earnings growth. D. will have lower earnings growth. 7 32. Which of the following industries would you expect to have the highest inventory turnover? A. restaurant B. car dealer C. jewelry store D. department store 33. Which of the following does not represent future expected cash inflows? A. accounts receivable B. prepaid expenses C. inventory D. notes receivable 34. Which of the following would be least likely to affect the quality of receivables? A. Credit policy B. Right of return policy C. Collection procedures D. Sales commissions 35. Which of the following industries would you expect to have the longest operating cycle? A. Fast Food Industry B. Aerospace Industry C. Discount retail store industry D. Utility industry Byfort Company reports the following in its financial statements: *All sales are on credit. 36. How much did the company collect in cash from debtors during 2006? A. $445,389K B. $454,611K C. $484,289K D. $488,900K 8 37. How much sales would have been reported by the company in 2006 if Byfort would have been using cash accounting and not accrual accounting? A. $445,389K B. $454,611K C. $484,289K D. $488,900K 38. The classification of marketable equity securities as trading or available-forsale is determined by: A. management's intent regarding the disposition of the securities. B. when the securities mature. C. whether the current assets are greater or less than the current liabilities. D. whether management wants to mark them to market or not. 39. Compared with companies that expense costs, firms that capitalize costs can be expected to report: A. higher asset levels and lower equity levels. B. higher asset levels and higher equity levels. C. lower asset levels and higher equity levels. D. lower asset levels and lower equity levels. 40. Windsor Company has net temporary differences between tax and book accounting of $80 million, resulting in a deferred tax liability of $28 million. An increase in the tax rate would have the following impact on deferred taxes and net income: A. Choice A B. Choice B C. Choice C D. Choice D 41. Edith's Amazing Shoes Company sells many products. \"Ambition\" shoes is one of its popular items. Below is an analysis of the inventory purchases and sales of \"Ambition\" for the month of September. Edith's Amazing Shoes Company 9 uses the periodic inventory system. INSTRUCTIONS a. Using the FIFO assumption, calculate the amount charged to cost of goods sold for September. (Show computations) 10 b. Using the LIFO assumption, calculate the amount assigned to the inventory on hand on September 31. (Show computations) 42. Consider each of the following situations independently of each other. For each of the situations provide one example of when the underlying circumstances may be such that the observed trend is unfavorable and one example of when the underlying circumstances are favorable. a. Current ratio increases from one period to the next b. Accounts receivable turnover increases from one period to the next c. Accounts payable turnover increases from one period to the next 43. Big-Deal Construction Company specializes in building dams. During Years 3, 4, and 5, three dams were completed. The first dam was started in Year 1 and 11 completed in Year 3 at a profit before income taxes of $240,000. The second and third dams were started in Year 2. The second dam was completed in Year 4 at a profit before income taxes of $252,000, and the third dam was completed in Year 5 at a profit before income taxes of $300,000. The company uses percentage-of-completion accounting for financial reporting and the completedcontract method of accounting for income tax purposes. The applicable income tax rate is 50% for each of the Years 1 through 5. Create a table outlining the year 1-5 numbers. One with total book income, one with total taxable income, and then show the difference between the two. 44. Indicate which of the following items would be classified as assets on the balance sheets. Write Yes or No in each column. 45. The Boeing Tanker Lease Deal (case that was posted in class folder) 12 a) b) 13 The Circular A-11 specified conditions under which a government may lease rather than purchase an asset. There were 4 criteria that needed to be met in order to qualify as a lease. Write out 2. What is the difference between an operating lease and a capital lease? On which statement does each of these appear and what is the benefit of having one over another