Question:1.

The following data came from the balance sheet of Han Company as of December 31, 20X2.

Machine$3,500$2,950Accumulated depreciation on machines1,4001,300Cash135180The following additional data were found in Han Company's financial statements for 20X2.

Sales$10,000Cash dividends paid65New machine purchases (for cash)1,000Net income300Depreciation expense270gain on sale of old machines140How much cash did Han Company receive from the sale of old machines during the year?

(Assume that all machine sales were cash transactions.)

$210 $420 $490 $590 $360

2.

On December 31, 20X1, Thomson Company had the following account balances:

Accounts receivable$15,000Sales revenues845,000Gain on sale of equipment14,000Retained earnings (beginning of year, January 1, 20X1)120,000Accounts payable25,000Loan payable45,000Cost of goods sold650,000Cash65,000Inventory11,000Common stock41,000Operating expenses210,000Dividends34,000Unearned revenue55,000Property, plant, and equipment145,000Prepaid rent50,000Bonds payable35,000Given these data, what is Thomson's DEBT-TO-EQUITY RATIO as of December 31, 20X1?

1.27 1.00 1.88 0.99 1.01 0.78 0.79 0.56

3.

Derrald Company's financial statements show the following items.

Sales$200,000Wage expense80,000Accounts receivable increase36,000Loss on sale of equipment13,000Unearned rent income22,000Rent revenue50,000Dividends (declared and paid)40,000Wages payable increase26,000Depreciation expense25,000Derrald has no other revenues or expenses. What is Derrald's net cash flow from operating

activities?

$196,000 $182,000 $154,000 $231,000 $132,000

Use the following information in answering the following 4 questions. Below are balance sheet and income statement data for Howard Bannister Company. Note: For the balance sheet data, the end-of-year information is in the left column.

20X220X1Accounts Payable16595Accumulated Depreciation520339Cash200100Common Stock1,000700DIVIDENDSPAYABLE4025Equipment2,7002,395Income Tax Payable100135Inventory1,120890Mortgage Payable9001,265Prepaid General Expenses300350Retained Earnings (ending balance, after closing)1,5451,098Unearned Sales Revenue5078

Sales10,000Loss on sale of PPE100Cost of Goods Sold6,000General Expense2,000Depreciation Expense330Income Tax Expense700Total Expenses9,130Net Income870Additional Information:

1. Equipment with a book value of $300 was sold during 20X2.
2. All accounts payable relate to inventory purchases.
3. Equipment costing $160 was purchased with a mortgage during 20X2. This fact is already reflected in the balance sheet numbers reported above. All other purchases of Equipment in 20X2 were cash transactions.

4. Compute the amount of Cash Paid for Inventory Purchases in 20X2. $6,100 $5,700 $6,160 $6,230 $5,840 $6,300 $6,280

5. Compute the total CASH FROM OPERATING ACTIVITIES in 20X2. $1,183 $1,200 $1,300 $927 $697 $1,027 $1,227 $1,127

6. Compute the total CASH FROM INVESTING ACTIVITIES in 20X2. net outflow of $394 net outflow of $343 net outflow of $455 net inflow of $500

7. Compute the CASH PAID FOR DIVIDENDS in 20X2. $422 $458 $378 $428 $408

8. Portland Company sold equipment with a book value of $600 for $850 cash. Total depreciation expense for the entire company for the year was $500. The beginning and ending balances in the Accumulated Depreciation account are $1,000 and $700, respectively. The beginning and ending balances in the Equipment account are $3,500 and $3,700 respectively. In the journal entry to record the sale of the equipment for $850 cash, which ONE of the following items would appear? Note: No other equipment was sold during the year. Credit to Equipment for $1,400 Debit to Accumulated Depreciation for $500 Debit to accumulated Depreciation for $300 Debit to Loss on Sale of Equipment for $250 Debit to Equipment for $200

9.

The following data come from the financial statements of Tarazi Aina Company for 20X8.

Dividends declared and paid during the year$65Increase in stockholder's equity during the year100Depreciation expense for the year40Increase in interest payable during the year11Total cash received from operating activities during the year124Increase in accumulated depreciation during the year32Increase in cash during the year15Net income for the year90Interest expense for the year55Total cash paid for investing activities during the year185

What was the amount of cash received through the issuance of new shares of stock by Tarazi Aina

Company during the year 20X8?

$100 $55 $75 $35 $10 $25 $115 $60

10. Which ONE of the following accounts will be CREDITED when making closing entries? Unearned Revenue Cash Interest Revenue Accounts Payable Cost of Goods Sold Prepaid Rent Expense Inventory Paid in Capital

11.

The following information is for Byrne Dareid Company:

20X220X1Loans Payable$10,000$20,000Retained Earnings85,00078,000Common Stock25,00017,000Net Income18,00020,000Net cash paid for financing activities27,00021,000

Using this information, compute the cash paid to repurchase shares of stock in 20X2.

$19,000 $10,000 $5,000 $14,000 $21,000

12.

Harry Company's statement of cash flows shows the following items scattered among the three

sections of the statement.

Accounts receivable decrease$36,000Gain on sale of equipment13,000Prepaid rent increase22,000Cash used to repay long-term loans80,000Accounts payable decrease18,000Inventory decrease50,000Dividends (declared and paid)40,000Interest payable decrease26,000Cash paid to purchase new equipment125,000Depreciation expense25,000Net cash flow from operating activitiespositive 100,000This is not a list of all of the items in Harry's statement of cash flows, but Harry has no other

items reported in the operating activities section of its statement of cash flows (prepared using

the indirect method). What is Harry's net income?

$28,000 $42,000 $68,000 $118,000 $92,000 $290,000 $108,000 $132,000

13.

Lily Company had the following account totals as of December 31, 20X2.

Cost of goods sold$150,000Accounts receivable100,000Rent revenue10,000Accounts payable25,000Sales200,000Inventory50,000Bank Loan Payable*20,000Cash18,000Retained earnings (beginning of year, January 1, 20X2)80,000Prepaid insurance (6-month insurance policy)15,000Paid-in capital38,000Equipment45,000Unearned rent revenue (9-month contract)5,000*Of the $20,000 bank loan payable, $3,000 will be repaid in 20X3. What is Lily Company's

CURRENT RATIO?

5.74 6.14 4.06 5.90 5.55

14.

The following items have been extracted from the financial statements of Lorien Company for the

year 20X1.

Total liabilities$700Net income50Gross profit400EBIT (also called operating income)220Sales1,000Total assets1,600Income tax expense40Cost of goods sold600Note: This list does not include all of the items in Lorien's 20X1 financial statements. However,

the list does include all of the items you need to correctly answer the question below. What is the

value of Lorien Company's TIMES INTEREST EARNED ratio for 20X1?

1.69 3.08 3.38 3.00 1.29 5.50 4.40 2.69

15. Rocky Company borrowed $10,000 on February 1, 20X1. The loan has an annual interest rate of 14%. Rocky Company repaid the loan in full (both principal and interest) on January 31, 20X2; no payments were made on the loan between February 1, 20X1 and January 31, 20X2. [Note: The correct adjusting entry with respect to this loan was recorded on December 31, 20X1.] The single journal entry to record the repayment of the loan (both principal and interest) on January 31, 20X2 includes a Debit to Interest Expense for $1,283 Credit to Interest Expense for $1,283 Debit to Interest Expense for $1,167 Credit to Interest Expense for $1,167 Debit to Interest Expense for $1,400 Credit to Interest Expense for $1,400 Debit to Interest Payable for $1,283 Credit to Interest Payable for $1,283

16. On June 1, 20X1, MaScare Company paid $3,600 for an insurance policy on some equipment that will be in effect for the 12 months from June 1, 20X1 through May 31, 20X2. MaScare recorded this payment on June 1 by debiting Insurance Expense. On September 1, 20X1, MaScare paid an additional $4,800 for an insurance policy on a building that will be in effect for the 12 months from September 1, 20X1 through August 31, 20X2. MaScare recorded this payment on September 1 by debiting Prepaid Insurance. On December 31, 20X1, MaScare makes one summary adjusting entry to make sure that the amount of Insurance Expense for 20X1 and the Prepaid Insurance amount as of December 31, 20X1 are both correct. The necessary summary adjusting entry includes a Debit to Insurance Expense of $1,500 Debit to Insurance Expense of $100 Debit to Insurance Expense of $2,100 Debit to Insurance Expense of $1,600

17.

The following information is for Yosef Company:

20X220X1Sales$260,000$320,000Accounts Payable10,00020,000Retained Earnings125,00078,000Inventory40,00050,000Accounts Receivable25,00020,000Cost of Goods Sold180,000200,000For 20X2, compute the average number of days that elapse from the time Yosef purchases

inventory until the time Yosef sells that inventory.

59.7 days 122.9 days 32.2 days 91.3 days 105.2 days

Use the following information to answer the following 5 questions. XYZ Company Balance Sheet as of December 31, 20X7 & 20X8

ASSETS:20X720X8Current assets:Cash$10,000$12,000Accounts receivable20,00025,000Inventory16,00024,000Prepaid insurance4,0003,00050,00064,000Property & equipment76,00084,000Total assets$126,000$148,000LIABILITIES AND STOCKHOLDERS EQUITY:Current liabilities:Accounts payable$15,000$17,000Other payables3,0007,00018,00024,000Long term notes payable35,00040,000Total liabilities53,00064,000Stockholder's equityCapital stock, 2,400 shares outstanding24,00024,000Retained earnings49,00060,00073,00084,000Total liabilities and stockholders equity$126,000$148,000XYZ Company Income Statement for the years ended December 31, 20X7 & 20X8

20X720X8Sales revenues$200,000$250,000Cost of goods sold120,000140,00080,000110,000Selling and admin. expenses40,00065,00040,00065,000Income tax expense15,00025,000Net income$25,000$40,000Dividends paid in 20X8 amounted to $29,000. Calculate the 12/31/X8 current ratio (round to

nearest tenth).

18. Calculate the 12/31/X8 current ratio (round to nearest tenth). 1.5 2.7 2.5 .5 none of the above

19. Calculate the 20X8 accounts receivable turnover assuming all sales during the year are made on account (round to the nearest tenth). 8.9 10.0 11.1 12.5 none of the above

20. Calculate the 20X8 average number of days of inventory on hand (round to the nearest tenth of a day). 7.0 52.1 56.2 62.6

21. Calculate the 20X8 EPS (round to nearest penny). $25.00 $10.42 $4.58 $16.67 none of the above

22. Calculate the % increase in accounts receivable during the year ended 20X8. 10% 20% 50% 125% none of the above

23. Which of the following best measures a company's liquidity? vertical analysis of the income statement debt to equity ratio acid-test ratio book value per share

24. A company's P/E ratio is calculated by dividing the company's book value per share by its EPS. measures a company's leverage. measures a company's liquidity. is used to measure a company's stock price relative to its earnings. is rarely used by value oriented investors