Question
I need help with 6 multiple choice questions. 1.In general which of the following categories would have negative cash flows on a statement of cash
I need help with 6 multiple choice questions.
1.In general which of the following categories would have negative cash flows on a statement
of cash flows for a fast-growing business in year five of operations.
a.operating activities.
b.investing activities.
c.financing activities.
d.significant noncash activities.
2.In 2018, Big Timber Ranch Company's purchased its own common stock with $25,000
of cash and held it as Treasury Stock, and Retained Earnings increased $75,000 as a
result of net income of $120,000 and cash dividends paid of $45,000. Net cash used
by financing activities is:
a.$25,000.
b.$45,000.
c.$120,000.
d.$70,000.
3.Which of the following performance measures is best to use for predicting future
earnings of a business?
a.Income before income tax expense
b.Income from Discontinued Operations (after taxes)
c.Income from Continuing Operations (after taxes)
d.Gross Profit (after taxes)
4.Which of the following inventory cost flow assumptions would result in the highest
current ratio in a period of rising prices?
a.Weighted-Average
b.Lower of Cost or Net Realizable Value
c.First-in First-Out
d.Last-in First-Out
5.If current assets are $200,000, and current liabilities are $300,000, and $100,000 of
accounts payable are paid, the current ratio will
a.stay the same.
b.decrease.
c.equal zero.
d.increase
6.Bobcat, Inc. has the following income statement (in millions):
BOBCAT, INC.
Income Statement
For the Year Ended December 31, 2016
Net Sales$400,000
Cost of Goods Sold 280,000
Gross Profit120,000
Operating Expenses80,000
Net Income$40,000
Using vertical analysis, what percentage is assigned to Operating Expenses?
a. 10%
b. 20%
c. 30%
d. 70%
e.100%
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