Chapter 5 Quiz

Houghton Company has the following items: common stock, $1,600,000; treasury stock, $210,000; deferred income taxes, $250,000 and retained earnings, $780,000. What total amount should Houghton Company report as stockholders' equity? $2,590,000. $2,420,000. 2,170,000. $1,390,000.

$2,170,000

Stine Corp.'s trial balance reflected the following account balances at December 31, 2014: A/R (net) $19,000 Trading Securities $6,000 Acc. Dep on Equip and furniture $15,000 Cash $16,000 Inventory $30,000 Equipment $25,000 Patent $4,000 Prepaid Expenses $2,000 Land held for future business site $18,000 In Stine's December 31, 2014 balance sheet, the current assets total is: Selected Answer: Correct $73,000. Answers: $90,000. $82,000. $77,000. Correct $73,000.

$73,000

During 2014 the DLD Company had a net income of $75,000. In addition, selected accounts showed the following changes: A/R $3,000 increase A/P $1,000 increase Buildings $4,000 decrease Dep. Exp. $1,500 increase Bonds Payable $8,000 increase What was the amount of cash provided by operating activities? $74,500 $75,000 $76,500 $84,500

$74,500

What are the three mainly-used sections of stockholder's equity? Preferred stock, common stock, treasury stock Preferred stock, common stock, retained earnings Capital stock, additional paid-in capital, retained earnings Capital stock, appropriated retained earnings, unappropriated retained earnings

Capital stock, additional paid-in capital, retained earnings

Which of the following is not a long-term investment? Cash surrender value of life insurance Franchise Land held for speculation A sinking fund

Franchise

If common stock was issued to acquire an $8,000 machine, how would the transaction appear on the statement of cash flows? It would depend on whether you are using the direct or the indirect method. It would be a positive $8,000 in the financing section and a negative $8,000 in the investing section. It would be a negative $8,000 in the financing section and a positive $8,000 in the investing section. It would not appear on the statement of cash flows but rather on a schedule of noncash investing and financing activities.

It would not appear on the statement of cash flows but rather on a schedule of non cash investing and financing activities

In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for: operating activities. borrowing activities. lending activities. financing activities.

Operating activities

The basis for classifying assets as current or noncurrent is conversion to cash within: the accounting cycle or one year, whichever is shorter. the operating cycle or one year, whichever is longer. the accounting cycle or one year, whichever is longer. the operating cycle or one year, whichever is shorter.

The operating cycle or one year, whichever is longer

Treasury stock should be reported as a(n): current asset. investment. other asset. reduction of stockholders' equity.

reduction of stockholders' equity

The statement of cash flows provides answers to all of the following questions except: where did the cash come from during the period? what was the cash used for during the period? what is the impact of inflation on the cash balance at the end of the year? what was the change in the cash balance during the period?

what is the impact of inflation on the cash balance at the end of the year?