ACG EXAM 1 ch.2

A company has liabilities of $750,000, common stock of $435,000, and retained earnings of $380,000. It has assets of

$1,565,000.

A company has assets of $3,000,000, common stock of $780,000, and liabilities of $475,000. What is the company's retained earnings?

$1,745,000

A corporation reports the following balances and amounts Accounts payable, $35,000 Cash provided by operations, $90,000 Accounts receivable, $37,500 Net income, $36,000 Average number of common shares, 20,000 Salaries and wages payable, $8,000 Average current liabilities, $110,000 Stockholders' equity, $240,000 Average total assets, $600,000 Current assets, $300,000 Average total liabilities, $320,000 Current liabilities, $120,000 Dividends paid to preferred shareholders, $10,000 Determine its earnings per share?

$1.30

A corporation reports the following balances and amountsAccounts payable, $35,000Cash provided by operations, $90,000Accounts receivable, $37,500Net income, $36,000Average number of common shares, 20,000Salaries and wages payable, $8,000Average current liabilities, $110,000Stockholders' equity, $240,000Average total assets, $600,000Current assets, $300,000Average total liabilities, $320,000Current liabilities, $120,000Dividends paid to preferred shareholders, $10,000 Determine its earnings per share?

$1.30

For the current year, a company reported a net cash inflow from operating activities of $140,000. It also reported the following: It issued $10,000 of common stock It paid a $5,000 note payable It paid $25,000 for equipment It paid $15,000 as dividends What is the company's free cash flow?

$100,000

A company reported a $150,000 cash inflow provided by operating activities. Additional data for the current year shows the following: It paid $30,000 for equipment It paid $5,000 in dividends It paid a $20,000 note payable. Shortly before year-end, it received $25,000 by issuing additional shares of its stock. What is its free cash flow?

$115,000

During the year, a corporation reported the following: Issued common stock, $98,000 Declared and paid dividends, $34,000 Net income, $402,000 At the end of the current year, the company's retained earnings is $2,384,000. What was its retained earnings balance at the beginning of the current year?

$2,016,000

A company's financial records report the following: Average assets, $80,000 Average equity, $39,000 Current assets, $16,000 Current liabilities, $8,000 Dividends paid to preferred stockholders, $2,000 Net income, $23,000 Beginning common shares outstanding was 8,000 and ending common shares outstanding was 12,000. What is the earnings per share (rounded to two decimal places)?

$2.10

A corporation reported net income of $32,000, net sales of $500,000, average stockholders' equity of $1,000,000, and it paid $2,000 of dividends to preferred stockholders. Its average common shares outstanding is 12,000. How much was its earnings per share?

$2.50

Based on the following accounts and year-end account balances for a certain corporation, determine the amount of property, plant, and equipment to be reported on its classified balance sheet. Accounts payable $ 70,000 Inventory 70,000 Accounts receivable 50,000 Land 100,000 Accumulated depreciation 30,000 Prepaid insurance 40,000 Buildings 150,000 Retained earnings 90,000 Cash 35,000 Trademarks 70,000 Common stock 325,000 The land is used as a parking lot

$220,000

A certain corporation reports the following balances and amounts. The following information is presented in random order (amounts are in dollars). Accounts payable$ 125,000Investments in bonds 80,000Accounts receivable 140,000Notes payable (due in 5 years) 200,000Accumulated depreciation 60,000Notes payable (due in 8 months) 56,000Buildings 400,000Prepaid insurance 82,000Cash 100,000Salaries and wages payable 8,000Common stock 300,000Retained earnings 193,000Inventory 200,000Trademarks 20,000 How much is its working capital?

$333,000

What is the total dollar amount of current assets reported on the classified balance for the following company? Accounts payable$ 60,000 Inventory 140,000 Accounts receivable 80,000 Land 190,000 Accumulated depreciation 40,000 Prepaid insurance 30,000 Buildings 230,000 Retained earnings 150,000 Cash 90,000 Trademarks 140,000 Common stock 650,000 The land is used as a parking lot.

$340,000

A corporation had beginning retained earnings of $724,000 and ending retained earnings of $833,000. During the year, it reported the following: Issued common stock, $47,000 Declared and paid dividends, $50,000. What was its net income for the year?

$59,000

Which of the following would not be reported among property, plant, and equipment on a classified balance sheet?

-cash -Inventory

A corporation has current assets of $3,203,000, current liabilities of $2,150,000, total assets of $10,000,000 and total liabilities of $6,000,000. If it pays $200,000 of its accounts payable what will its current ratio be? (rounded)

1.54

Based on the following data (in dollars), what is the current ratio? Accounts payable$ 140,000 Inventory 110,000 Accounts receivable 100,000 Investments in bonds 310,000 Accumulated depreciation 40,000 Land 180,000 Buildings 210,000 Notes payable (due in 2 years) 160,000 Cash 130,000 Prepaid insurance 60,000 Common stock 240,000 Salaries and wages payable 20,000

2.50

A company has current assets of $1,800,000 and total assets of $10,000,000. It has current liabilities of $750,000 and total liabilities of $7,500,000. If it pays $250,000 of its accounts payable what will its current ratio be (rounded)?

3.1

Which of the following is not an example of an intangible asset?

Accounts receivable

A ratio summarizes the relation between selected items. Financial statement analysis (i.e., ratio analysis) focuses on the relation between certain financial statement data, such as earnings and the number of shares of common stock (i.e., earnings per share or EPS). A ratio by itself is not particularly useful. Rather, ratios tend to be compared to standards. Which of the following is a comparison facilitated by ratios when conducting a financial statement analysis (i.e., ratio analysis)?

All of these

In what order are current assets listed on a classified balance sheet?

By liquidity

What are the U.S. accounting rules that have substantial authoritative support and are recognized as a guide for financial reporting purposes?

Generally accepted accounting principles

Which one of the following does not affect retained earnings?

Issuing of common stock to stockholders

Which of the following is a financial ratio classification that measures short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash?

Liquidity ratios

The agency of the United States Government that oversees and regulates the U.S. financial markets is the

Security Exchange commission

Which of the following ratios measures the ability of the company to survive over a long period of time?

Solvency ratio

Which financial statement is used by most corporations to compute year-end retained earnings?

Statement of stockholders' equity

Which of the following would decrease the company's current ratio?

Using excess cash to buy long-term investments

What is measured by current assets minus current liabilities?

Working Capital

A company purchased common stock of another corporation. The company expects to hold the other corporation's stock for more than one year. On its classified balance sheet, the company should report the common stock as

a long-term investment

Accounting information has relevance if it would make a difference in a business decision. Characteristics associated with relevant accounting information include

being material and having predictive value.

The current ratio is

current assets divided by current liabilities

Accounting information should be neutral in order to enhance

faithful representation

Which of the following is a measure of liquidity

working capital