When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the book value of the stock. stated value of the stock. par value of the stock. market value of the stock. A company would not acquire treasury stock in order to increase trading of the company's stock. in order to reissue shares to officers. to have additional shares available to use in acquisitions of other companies. as an asset investment. A corporate board of directors does not generally declare dividends. select officers. formulate operating policies. execute policy. Treasury Stock is a(n) retained earnings account. contra asset account. contra stockholders? equity account. asset account. Which one of the following events would not require a formal journal entry on a corporation's books? $1 per share cash dividend 2 for 1 stock split 100% stock dividend 2% stock dividend The board of directors must assign a per share value to a stock dividend declared that is less than the par or stated value. at least equal to the par or stated value. equal to the par or stated value. greater than the par or stated value. Which of the following is an incorrect statement about a corporation? A corporation is subject to numerous state and federal regulations. A corporation is an entity separate and distinct from its owners. Creditors ordinarily have recourse only to corporate assets in satisfaction of their claims. A corporation may be formed in writing, orally, or implied. 
When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the book value of the stock. stated value of the stock. par value of the stock. market value of the stock. A company would not acquire treasury stock in order to increase trading of the company's stock. in order to reissue shares to officers. to have additional shares available to use in acquisitions of other companies. as an asset investment. A corporate board of directors does not generally declare dividends. select officers. formulate operating policies. execute policy. Treasury Stock is a(n) retained earnings account. contra asset account. contra stockholders' equity account. asset account. Which one of the following events would not require a formal journal entry on a corporation's books? $1 per share cash dividend 2 for 1 stock split 100% stock dividend 2% stock dividend The board of directors must assign a per share value to a stock dividend declared that is less than the par or stated value. at least equal to the par or stated value. equal to the par or stated value. greater than the par or stated value. Which of the following is an incorrect statement about a corporation? A corporation is subject to numerous state and federal regulations. A corporation is an entity separate and distinct from its owners. Creditors ordinarily have recourse only to corporate assets in satisfaction of their claims. A corporation may be formed in writing, orally, or implied. When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the book value of the stock. stated value of the stock. par value of the stock. market value of the stock. A company would not acquire treasury stock in order to increase trading of the company's stock. in order to reissue shares to officers. to have additional shares available to use in acquisitions of other companies. as an asset investment. A corporate board of directors does not generally declare dividends. select officers. formulate operating policies. execute policy. Treasury Stock is a(n) retained earnings account. contra asset account. contra stockholders' equity account. asset account. Which one of the following events would not require a formal journal entry on a corporation's books? $1 per share cash dividend 2 for 1 stock split 100% stock dividend 2% stock dividend The board of directors must assign a per share value to a stock dividend declared that is less than the par or stated value. at least equal to the par or stated value. equal to the par or stated value. greater than the par or stated value. Which of the following is an incorrect statement about a corporation? A corporation is subject to numerous state and federal regulations. A corporation is an entity separate and distinct from its owners. Creditors ordinarily have recourse only to corporate assets in satisfaction of their claims. A corporation may be formed in writing, orally, or implied. Lockheed Martin Proprietary Information The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments during a period. provide information about the investing and financing activities during a period. facilitate banking relationships. prove that revenues exceed expenses if there is a net income. In addition to the three basic financial statements, which of the following is also a required financial statement? the "Cash Budget" the Statement of Cash Flows the Statement of Cash Inflows and Outflows the "Cash Reconciliation" Land acquired from the issuance of common stock is reported as an investing activity. as an operating activity. in a separate schedule at the bottom of the statement. as a financing activity. During 2013, Forman Industries reported cash provided by operations of $690,000, cash used in investing of $1,029,000, and cash used in financing of $135,000. In addition, cash spent for fixed assets during the period was $414,000. No dividends were paid. Based on this information, what was Forman's free cash flow? $1,440,000 $276,000 ($888,000) ($339,000) In Flagg Company, net income is $280,000. If accounts receivable increased $145,000 and accounts payable decreased $50,000, net cash provided by operating activities using the indirect method is: $475,000. $185,000. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information $85,000. $375,000. When equipment is sold for cash, the amount received is reflected as a cash inflow in the operating section. outflow in the operating section. inflow in the financing section. inflow in the investing section. The following data are available for Quarter Company. Increase in accounts payable $120,000 Increase in bonds payable 400,000 Sale of investments 150,000 Issuance of common stock 180,000 Payment of cash dividends 90,000 Net cash provided by financing activities is: $520,000. $280,000. $490,000. $460,000. The third (final) step in preparing the statement of cash flows is to compare the net change in cash with the change in the cash account reported on the balance sheet. determine net cash provided by operating activities. list the noncash activities. analyze changes in noncurrent asset and liability accounts. Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the indirect method. working capital method. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information costbenefit method. direct method. The statement of cash flows will not report the uses of cash in the current period. sources of cash in the current period. amount of checks outstanding at the end of the period. change in the cash balance for the current period. Collins Pest Control Products has the following information available: Net Income $25,000 Cash Provided by Operations 31,000 Cash Sales 65,000 Capital Expenditures 11,000 Dividends Paid 3,000 What is Collins' free cash flow? $11,000 $20,000 $17,000 $28,000 Which of the following would not be an adjustment to net income using the indirect method? An increase in Land Amortization Expense Depreciation Expense An increase in Prepaid Insurance sing the indirect method, patent amortization expense for the period causes cash to increase. is deducted from net income. causes cash to decrease. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information is added to net income. Using the indirect method, if equipment is sold at a gain, the sale proceeds received are added in the operating activities section. amount of the gain is added in the operating activities section. amount of the gain is deducted in the operating activities section. sale proceeds received are deducted in the operating activities section. Madison Company reported net income of $100,000 for the year ended December 31, 2013. During the year, inventories decreased by $12,000, accounts payable decreased by $18,000, depreciation expense was $20,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2013 using the indirect method was $105,000. $112,000. $90,000. $154,000. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments during a period. provide information about the investing and financing activities during a period. facilitate banking relationships. prove that revenues exceed expenses if there is a net income. In addition to the three basic financial statements, which of the following is also a required financial statement? the "Cash Budget" the Statement of Cash Flows the Statement of Cash Inflows and Outflows the "Cash Reconciliation" Land acquired from the issuance of common stock is reported as an investing activity. as an operating activity. in a separate schedule at the bottom of the statement. as a financing activity. During 2013, Forman Industries reported cash provided by operations of $690,000, cash used in investing of $1,029,000, and cash used in financing of $135,000. In addition, cash spent for fixed assets during the period was $414,000. No dividends were paid. Based on this information, what was Forman's free cash flow? $1,440,000 $276,000 ($888,000) ($339,000) In Flagg Company, net income is $280,000. If accounts receivable increased $145,000 and accounts payable decreased $50,000, net cash provided by operating activities using the indirect method is: $475,000. $185,000. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information $85,000. $375,000. When equipment is sold for cash, the amount received is reflected as a cash inflow in the operating section. outflow in the operating section. inflow in the financing section. inflow in the investing section. The following data are available for Quarter Company. Increase in accounts payable $120,000 Increase in bonds payable 400,000 Sale of investments 150,000 Issuance of common stock 180,000 Payment of cash dividends 90,000 Net cash provided by financing activities is: $520,000. $280,000. $490,000. $460,000. The third (final) step in preparing the statement of cash flows is to compare the net change in cash with the change in the cash account reported on the balance sheet. determine net cash provided by operating activities. list the noncash activities. analyze changes in noncurrent asset and liability accounts. Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the indirect method. working capital method. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information costbenefit method. direct method. The statement of cash flows will not report the uses of cash in the current period. sources of cash in the current period. amount of checks outstanding at the end of the period. change in the cash balance for the current period. Collins Pest Control Products has the following information available: Net Income $25,000 Cash Provided by Operations 31,000 Cash Sales 65,000 Capital Expenditures 11,000 Dividends Paid 3,000 What is Collins' free cash flow? $11,000 $20,000 $17,000 $28,000 Which of the following would not be an adjustment to net income using the indirect method? An increase in Land Amortization Expense Depreciation Expense An increase in Prepaid Insurance sing the indirect method, patent amortization expense for the period causes cash to increase. is deducted from net income. causes cash to decrease. Lockheed Martin Proprietary Information Lockheed Martin Proprietary Information is added to net income. Using the indirect method, if equipment is sold at a gain, the sale proceeds received are added in the operating activities section. amount of the gain is added in the operating activities section. amount of the gain is deducted in the operating activities section. sale proceeds received are deducted in the operating activities section. Madison Company reported net income of $100,000 for the year ended December 31, 2013. During the year, inventories decreased by $12,000, accounts payable decreased by $18,000, depreciation expense was $20,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2013 using the indirect method was $105,000. $112,000. $90,000. $154,000. Lockheed Martin Proprietary Information
