Question 3

Tri Fecta, a partnership, had revenues of $379,000 in its first year of operations. The partnership has not collected on $46,300 of its sales and still owes $39,700 on $180,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $33,200 in salaries. The partners invested $41,000 in the business and $27,000 was borrowed on a five-year note. The partnership paid $2,160 in interest that was the amount owed for the year and paid $9,500 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.

$ 286,910

$ 215,540

$ 226,890

$ 222,140

Question 4

The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.:

Net sales	$10,823
Total assets	4,501
End of year balance in cash	1,049
Total stockholders' equity	471
Gross profit (Sales - Cost of Sales).	2,501
Net increase in cash for the year	25
Operating expenses	2,050
Net operating cash flow	634
Other income (expense), net	(27)

Compute Amazon's total liabilities at the end of the year.

$ 2,154

$ 4,551

$ 4,501

$ 4,030

Question 5

Which of the following groups is not among financial intermediaries?

Mutual fund managers.

Financial analysts.

CPAs.

Credit rating organizations.

Question 6

Top of Form

The most political issue in the FASB's most recent deliberations and amendments to GAAP on business combinations was:

a) The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the purchase method of accounting for the combination.

B)The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the pooling method of accounting for the combination.

c) The unrealistic balance sheet assets that would be created if firms were required to use the purchase method of accounting for the combination.

d)The unrealistic balance sheet assets that would be created if firms were required to use the pooling method of accounting for the combination.

Question 7

The possibility that the capital markets' focus on periodic profits may tempt a company's management to bend or even break accounting rules to inflate reported net income is an example of:

a)An ethical dilemma.

b)An accounting theory issue.

c)A technical accounting issue.

d)An auditor's responsibility to inform the SEC.