Question
QUIZ A- Free cash flow is calculated as net cash provided by operating activities less capital expenditures and: 1- debt repayments. 2- dividends. 3- interest.
QUIZ
A- Free cash flow is calculated as net cash provided by operating activities less capital expenditures and:
1- debt repayments.
2- dividends.
3- interest.
4- income taxes.
Practice Question 15
The cash flow statement for Schroder Corporation shows the following information:
Net cash provided by operating activities:$100,000Net cash used by investing activities:$(50,000)Net cash provided by financing activities:$10,000Cash balance at the beginning of the period:$30,000
The cash balance at the end of the period is:
1- $60,000.
2- $90,000.
3- nil.
4- $190,000
.Practice Question 24
ZYX Corporation states, in the notes to its 2019 financial statements, that it refinanced some of its long-term debt early in 2020, before the financial statements were issued. The debt continues to be classified as non-current on the 2019 statement of financial position. That means that ZYX:
1- prepared its financial statements using IFRS
2- prepared its financial statements using ASPE
3- may have prepared its financial statements under either IFRS or ASPE
4- is a going concern.
Rover Corporation reports the following information:
Net income$2,500,000Depreciation expense340,000Loss on the sale of investments77,000Increase in accounts receivable160,000
Rover should report cash provided by operating activities of
1- $1,923,000.
2- $2,500,000.
3- $2,757,000.
4- $3,077,000.
Testbank Question 13
Non-monetary assets include
1- accounts receivable and property, plant and equipment.
2- accounts and notes receivable and inventory.
3- inventory, property, plant and equipment, and intangibles.
4- accounts receivable and investments.
Testbank Question 23
An example of an item which is NOT an element of working capital is
1- short-term investments.
2- accrued interest on notes receivable.
3- goodwill.
4- inventory.
Which of the following balance sheet classifications would normally require the greatest amount of supplemental disclosure?
1- Current liabilities
2- Plant assets
3- Long-term liabilities
4-Current assets
A measure of a company's financial flexibility is the
1- current cash debt coverage ratio.
2- cash debt coverage ratio and free cash flow.
3- cash debt coverage ratio.
4- free cash flow.
Testbank Question 75
Maggins Inc. gives you the following information pertaining to the year 2020:
Net sales$880,000
Cost of goods sold550,000
Current assets525,000
Current liabilities262,500
Average total assets950,000
Total liabilities577,500
Net income165,000
The asset turnover ratio of Maggins Inc. is
1- 0.56.
2- 0.17.
3- 0.93.
4- 1.08.
Avonics Ltd., which follows ASPE had the following comparative statement of financial position:
Avonics Ltd.
Comparative Statement of Financial Position
December 31Assets20212020Cash$82,000$50,000Accounts receivable136,000102,000Inventory
80,000120,000Prepaid insurance10,0008,000Equipment308,000274,000Accumulated depreciationequipment
(70,000)(50,000)Total assets$546,000$504,000Liabilities and Shareholders' EquityAccounts payable$86,000$72,000Salaries and wages payable
12,0008,000Income taxes payable16,00018,000Mortgage payable
110,000124,000Common shares220,000210,000Retained earnings102,00072,000Total liabilities and shareholders' equity$546,000$504,000
Additional information:
Net income was $54,600.
New equipment was purchased and none was sold.
Common shares were issued for cash.
Cash dividends were paid to common shareholders.
Prepare the statement of cash flows using the indirect format.(Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
AvonicsLtd.
Statement of Cash Flow
net cash provided by operating activities
:Additional Problem 15
Kaitlin Ltd. had the following comparative Statement of Financial Position:
Kaitlin Ltd.
Comparative Statement of Financial Position
March 31
Assets 2021 2020
Cash $17,000 $12,000
Accounts receivable 60,000 40,000
Inventory 84,000 70,000
Prepaid expenses 6,000 4,000
Property, plant, and equipment 250,000 210,000
Accumulated depreciation (60,000) (48,000)
Total assets $357,000 $288,000
Liabilities and Shareholders' Equity
Accounts payable $35,000 $40,000
Interest payable 3,000 4,000
Income taxes payable 22,000 12,000
Bonds payable 90,000 64,000
Common shares 95,000 80,000
Retained earnings 112,000 88,000
Total liabilities and shareholders' equity$357,000 $288,000
Calculate the current ratio and debt to total assets ratio as at March 31, 2021 and March 31, 2020.(Round Current ratio to 1 decimal place, e.g. 15.1 and Debt to total asset ratio to 2 decimal places, e.g. 15.75.)
2021 2020
Current ratio
Debt to total assets ratio
Testbank Question 3
The statement of financial position is useful for all of the followingEXCEPT
1- evaluating a company's liquidity.
2- evaluating a company's financial flexibility.
3- determining free cash flows.
4- assessing a company's risk.
Testbank Question 40
Significant accounting policies may NOT be
1- unusual or innovative in application.
2- omitted from financial-statement disclosure.
3- selected on the basis of judgement.
4- selected from existing acceptable alternatives.
Testbank Question 40
Significant accounting policies may NOT be
1- unusual or innovative in application.
2- omitted from financial-statement disclosure.
3- selected on the basis of judgement.
4- selected from existing acceptable alternatives
.Testbank Question 40
Significant accounting policies may NOT be
1- unusual or innovative in application.
2- omitted from financial-statement disclosure.
3- selected on the basis of judgement.
4-selected from existing acceptable alternatives.
In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for
1- operating activities.
2- borrowing activities.
3-financing activities.
4- lending activities
.
Ratios that measure how effectively an entity is using is assets are called
1- solvency ratios.
2- liquidity ratios.
3- activity ratios.
4- profitability ratios
Testbank Question 77
Financial or capital market risks are related
1- investing activities only.
2- operating and financing activities.
3- financing activities only.
4- both financing and investing activities.
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