acg ch.2 quiz

During the current year, Keen Company issued stock for $49,000, paid dividends of $17,000, and reported net income of $201,000. What was its retained earnings balance at the beginning of the same year if its ending retained earnings is $1,292,000?

$1,108,000.

Vista Corporation has assets of $3,000,000, common stock of $780,000, and liabilities of $475,000. What is the company's retained earnings? - $2,695,000 - $1,255,000 - $1,745,000 - $3,305,000 - $4,255,000

$1,745,000

Riverview Inc. reports the following balances and amounts. The following information is presented in random order. Accounts payable, $35,000 Cash provided by operations, 90,000 Accounts receivable, 37,500 Net income, 36,000 Average 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 How much is earnings per share?

$1.30

A company's financial records report the following: Average assets, $44,000 Average equity, $21,000 Current assets, $7,000 Current liabilities, $4,000 Dividends paid to preferred stockholders, $3,000 Net income, $18,000 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)?

$1.50

Suppose that Morris Corporation produced and sold 4,200 desktop computers during the year. It reported a $150,000 cash inflow provided by operating activities. In order to maintain production at 4,200 laptops, Morris paid $30,000 for equipment. Morris paid $5,000 in dividends and it paid a $20,000 note payable. Shortly before year-end, Morris received $25,000 by issuing additional shares of its stock. What is Morris's free cash flow?

$115,000

For a given company, total assets are $260,000, current liabilities are $10,000, long-term liabilities are $60,000, common stock is $150,000, and retained earnings is $40,000. How much is total stockholders' equity?

$190,000

Based on the following accounts and year-end account balances for Saille Corporation, determine the amount of current assets to be reported on Saille's classified balance sheet. Accounts payable................................. $ 70,000 Accounts receivable............................. 50,000 Accumulated depreciation................. 30,000 Buildings................................................. 115,000 Cash........................................................ 35,000 Common stock..................................... 325,000 Inventory................................................ 70,000 Land......................................................... 100,000 Prepaid insurance................................. 40,000 Retained earnings................................. 90,000 Trademarks.............................................. 70,000

$195,000

At the end of the year, Blue Company had retained earnings of $2,840,000. During the year, the company issued stock for $108,000 and paid dividends of $43,000. Net income for the year was $402,000. How much was the retained earnings balance at the beginning of the same year?

$2,481,000

Riverview Inc. reports the following balances and amounts. The following information is presented in random order. Accounts payable, $50,000 Cash provided by operations, 100,000 Accounts receivable, 35,000 Net income, 40,000 Average common shares, 15,000 Salaries and wages payable, 40,000 Average current liabilities, 225,000 Stockholders' equity, 200,000 Average total assets, 600,000 Current assets, 300,000 Average total liabilities, 320,000 Current liabilities, 250,000 Dividends paid to preferred shareholders, 5,000 How much is earnings per share?

$2.33

The following information is available for Hopper Corporation: (in millions) Hopper Corporation 2018 2017 Preferred dividends 20 10 Net income 480 500 Shares outstanding at the end of the year 200 180 Shares outstanding at the beginning of the year 180 160 Based on this information, what is the amount of Hopper's earnings per share (rounded to two decimals) for 2018?

$2.42

Stonebrook Corporation reported net income of $32,000, net sales of $500,000, and average common shares outstanding of 12,000. There were $2,000 of preferred stock dividends. How much was its earnings per share?

$2.50

Based on the following data, what is the amount of working capital? Accounts payable................................ $ 64,000 Accounts receivable........................... 114,000 Cash...................................................... 60,000 Intangible assets................................. 100,000 Inventory.............................................. 138,000 Equipment....................................... 300,000 Long-term investments..................... 160,000 Short-term investments...................... 80,000 Notes payable (due in 2 years).......... 200,000 Notes payable (due in 6 months)....... 56,000 Prepaid insurance................................. 2,000

$274,000

Twilight Corporation has liabilities of $2,400,000, common stock of $620,000, and retained earnings of $380,000. What are the company's assets?

$3,400,000

Based on the following data for Sail Corporation, what is the amount of current assets on a classified balance sheet? Accounts payable................................ $60,000 Accounts receivable............................ 180,000 Cash....................................................... 50,000 Common stock..................................... 530,000 Equipment.......................................... 300,000 Goodwill............................................. 100,000 Inventory.............................................. 150,000 Notes payable..................................... 80,000 Prepaid insurance............................... 10,000 Retained earnings............................. 50,000 Salaries and wages payable............. 70,000

$390,000

The net cash inflow from operating activities is $140,000; cash received from issuing stock is $75,000; cash paid for capital expenditures is $60,000; cash paid for bonds held as an investment is $20,000; and dividends paid are $20,000. How much is free cash flow?

$60,000

Pilgrim Corporation reports the following on its financial statements. Cash paid for new equipment, $35,000 Cash collected from customers, $120,000 Paid a note payable, $10,000 Cash collected in exchange for issuing additional shares of Pilgrim stock to stockholders, $15,000 Cash dividends paid, $5,000 The company reports $75,000 of net income for the year and it has $80,000 of cash at year-end. What is the company's free cash flow?

$80,000

Rose Company has the following accounts and balances: Accounts payable.............................$40,000 Accounts receivable...........................70,000 Accumulated depreciation............50,000 Buildings................................................. 500,000 Cash........................................................ 100,000 Common stock.....................................690,000 Equipment......................................... 120,000 Inventory................................................ 200,000 Investments in securities (long-term). 20,000 Land......................................................... 150,000 Notes payable..................................300,000 Patents................................................ 10,000 Prepaid insurance............................ 20,000 Retained earnings........................... 150,000 Trademarks........................................... 40,000 What is Rose Company's (i) current assets and (ii) property, plant & equipment?

(i) $390,000 and (ii) $720,000

Clawson Corporation has current assets of $3,010,000 and current liabilities of $2,150,000. If Clawson Corporation pays $200,000 of its accounts payable what will its new current ratio be?

1.44

Clawson Corporation has current assets of $3,150,000 and current liabilities of $2,250,000. If Clawson Corporation pays $500,000 of its accounts payable what will its new current ratio be?

1.51

Clawson Corporation has current assets of $3,750,000 and current liabilities of $2,050,000. If Clawson Corporation pays $500,000 of its accounts payable what will the new current ratio be?

2.10

Jose Inc. reports the following balances and amounts. The following information is presented in random order (amounts are in dollars). Accounts payable, 35,000 Cash provided by operations, 90,000 Accounts receivable, 37,500 Net income, 36,000 Average common shares, 20,000 Salaries and wages payable, 8,000 Average current liabilities, 110,000 Stockholders' equity, 240,000 Average and total assets, 600,000 Total current assets, 300,000 Average total liabilities, 320,000 Total current liabilities, 120,000 Cash, 100,000 How much is its current ratio?

2.50

Based on the following data, what is the current ratio? Accounts payable................................ $ 64,000 Accounts receivable........................... 114,000 Accumulated depreciation.............. 160,000 Cash...................................................... 60,000 Equipment......................................... 1,500,000 Inventory.............................................. 138,000 Long-term investments..................... 160,000 Notes payable (due in 3 months)...... 56,000 Notes payable (due in 2 years)......... 200,000 Patents................................................ 100,000 Prepaid insurance................................. 2,000 Short-term investments...................... 80,000

3.28

A company purchased a tract of land on which it expects to build a factory in approximately five years. During the five years before construction, the land will be idle. In what classification should the land be reported? - A long-term investment - An intangible asset - Property, plant, and equipment - Land expense

A long-term investment

A company purchased a tract of land on which it expects to build a factory in approximately five years. During the five years before construction, the land will be idle. In what classification should the land be reported? - An intangible asset - Property, plant, and equipment - Land expense - A long-term investment

A long-term investment

A company purchased a tract of land on which it expects to build a factory in approximately five years. During the five years before construction, the land will be idle. In what classification should the land be reported? - Land expense - An intangible asset - A long-term investment - Property, plant, and equipment

A long-term investment

Which of the following is not a current asset? - All of these are current assets - Investments in short-term U.S. government securities - Inventory - A note receivable to be collected in two years - Cash

A note receivable to be collected in two years

Which of the following statements is true?#1. The Financial Accounting Standards Board is the organization that makes many of the accounting standards or rules in the United States.#2. Generally Accepted Accounting Principles are rules and practices that are recognized as a general guide for financial reporting purposes in the United States. - Statement #1 is true but statement #2 is false - Statement #1 is false but statement #2 is true - Both statements are true - Neither statement #1 nor #2 is true

Both statements are true

Which of the following statements is false? - The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decisions. - Comparability means using the same accounting principles from year to year within a company. - All of these are false. - Accounting information has relevance if it would make a difference in a business decision. - Faithful representation is the quality of information that gives assurance that it is free of error.

Comparability means using the same accounting principles from year to year within a company.

Dividing net income minus preferred stock dividends by the average of common shares outstanding produces the following: - The gross margin ratio - Current ratio - The net income return ratio - The leverage ratio - Earnings per share

Earnings per share

Which of the following organizations issues the majority of the accounting standards for companies in the United States? - Internal Revenue Service - Financial Accounting Standards Board - Generally Accepted Accounting Principles - International Accounting Standards Board - Public Company Accounting Oversight Board

Financial Accounting Standards Board

Which of the following is an example of an intangible asset? - Land - Goodwill - Prepaid expenses - Accounts receivable - Cash

Goodwill

Which of the following is an example of an intangible asset? - Prepaid expenses - Cash - Accounts receivable - Land - Goodwill

Goodwill

Trademarks would appear in which section of a classified balance sheet? - Property, plant, and equipment - Investments - Current assets - Stockholders' equity - Intangible assets

Intangible assets

Which of the following would not be reported among property, plant, and equipment on a classified balance sheet? - Buildings - Land - Delivery vehicles - Accumulated depreciation - Inventory

Inventory

Which of the following would not be reported among property, plant, and equipment on a classified balance sheet? - Buildings - Land - Inventory - Accumulated depreciation - Delivery vehicles

Inventory

Which one of the following does not affect retained earnings? - Dividends - All of these affect retained earnings - Net loss - Issuance of common stock - Net income

Issuance of common stock

Which one of the following does not affect retained earnings? - Dividends - Issuance of common stock - Net loss - All of these affect retained earnings - Net income

Issuance of common stock

Which of the following is considered property, plant, and equipment on a classified balance sheet? - Land - Depreciation - Copyrights - Accounts receivable - Investments in another company's stock

Land

Which of the following describes a company's ability to pay its obligations that are expected to become due within the next year or operating cycle whichever is longer? - Solvency - Economy - Profitability - Working capital - Liquidity

Liquidity

Faithful representation means that information accurately depicts what really happened. Which of the following is not a quality associated with faithful representation? - Free from error - All of these are associated with faithful representation - Neutral - Materiality - Complete

Materiality

Which of the following is not classified as a current asset? - Cash - Inventory - Accounts receivable - Patents - Prepaid expenses

Patents

Which of the following does not affect the company's current ratio? - Use excess cash to buy long-term investments. - Pay a dividend to shareholders. - Sell services to customers in exchange for cash. - Issue a short-term note in exchange for cash. - Paying the next month's rent one month in advance.

Paying the next month's rent one month in advance.

Which of the following is a financial ratio classification that measures the income or operating success of a company for a given period of time? - Analysis ratios - Financial ratios - Profitability ratios - Liquidity ratios - Solvency ratios

Profitability ratios

Which of the following statements is true? #1. The Securities Exchange Commission is the organization that makes all of the accounting standards or rules in the United States. #2. Generally Accepted Accounting Principles are rules and practices that are recognized as a general guide for financial reporting purposes. - Neither statement #1 nor #2 is true - Both statements are true - Statement #1 is true but statement #2 is false - Statement #1 is false but statement #2 is true

Statement #1 is false but statement #2 is true

Which financial statement is used by most corporations instead of the retained earnings statement? - None of these - Statement of sources and uses - Statement of stockholders' equity - Balance sheet - Statement of cash flows

Statement of stockholders' equity

Which of the following requires that only those things that can be expressed in money are included in the accounting records? - The monetary unit assumption - The historical cost principle - The cost-benefit principle - The periodicity assumption - The full disclosure principle

The monetary unit assumption

What is measured by current assets minus current liabilities? - Cash flow - Profitability - Solvency - Current ratio - Working capital

Working capital

On a classified balance sheet, short-term investments are classified as - a current asset. - an intangible asset. - a long-term investment. - an equity - property, plant, and equipment.

a current asset.

All of the following are qualities of useful financial information except - flexibility. - predictive value - materiality. - relevance. - faithful representation.

flexibility.

Issuing new shares of common stock will - increase retained earnings. - increase both retained earnings and common stock. - decrease retained earnings. - decrease common stock. - increase common stock.

increase common stock.

The ability of a business to pay obligations that are expected to become due within the next year or operating cycle is - wealth. - leverage. - capitalization. - liquidity. - profitability.

liquidity.

The current ratio is important in evaluating a company's - equity. - liquidity. - profitability. - solvency. - market value.

liquidity.

The current ratio is important in evaluating a company's - liquidity. - solvency. - equity. - market value. - profitability.

liquidity.

The assumption the life of a business can be divided into artificial time periods for financial reporting purposes is known as the - integrity assumption. - going concern assumption. - periodicity assumption. - monetary unit assumption. - economic entity assumption.

periodicity assumption.

Long-term creditors are usually most interested in evaluating - consistency. - comparability. - liquidity. - profitability. - solvency.

solvency.

The periodicity assumption states - only those things that can be expressed in monetary terms are included in the accounting records. - every economic entity can be separately identified and accounted for. - the business will use the same accounting procedures and methods in each period. - the life of a business can be divided into artificial time periods for financial reporting purposes. - the business will remain in operation for at least one more period.

the life of a business can be divided into artificial time periods for financial reporting purposes.