Exam 1: Managerial Accounting

The bond traded is bought or sold for $1,025.

A $1,000 bond trading at 102½ means that:

executive summary

A brief analysis of results and conclusions is usually included in which section of a financial statement analysis report?

A decrease in cash flows from financing activities

A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:

$148,800.

A company's income statement showed the following: net income, $124,000 and depreciation expense, $30,000. The company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,400; merchandise inventory increased $18,000; and accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.

an auditor summary

A financial statement analysis report does not include:

Installment note

A liability requiring a series of payments to the lender is referred to as a(n):

Adonis must pay $200,000 at maturity plus 20 interest payments of $8,000 each.

Adonis Corporation issued 10-year, 8% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 7.5%. Adonis received $206,948 in cash proceeds. Which of the following statements is true?

Allocates a portion of the total discount to interest expense each interest period.

Amortizing a bond discount:

Bonds do no affect owner control

An advantage of bonds is:

Operating Activity

If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n):

Are used to compare a company's performance to industry performance.

Industry standards for financial statement analysis:

0.38

JP Corporation reports the following year-end balance sheet data. The company's debt ratio equals:

15.84%.

Martinez Corporation reported net sales of $783,000, net income of $124,000, and total assets of $7,814,070. The profit margin is:

A note in the financial statements or a schedule attached to the statement of cash flows.

Noncash investing and financing activities may be disclosed in:

Debit Cash $1,864,097; debit Discount on Bonds Payable $135,903; credit Bonds Payable $2,000,000.

On January 1, Parson Freight Company issues 7%, 10-year bonds with a par value of $2,000,000. The bonds pay interest semiannually. The market rate of interest is 8% and the bond selling price was $1,864,097. The bond issuance should be recorded as:

$325,592.40.

On January 1, a company issues 8%, 5-year, $300,000 bonds that pay interest semiannually. On the issue date, the annual market rate of interest is 6%. The following information is taken from present value tables:

Debit Interest Expense $18,000; debit Notes Payable $22,760; credit Cash $40,760.

On July 1, Shady Creek Resort borrowed $300,000 cash by signing a 10-year, 6% installment note requiring equal payments each June 30 of $40,760. What is the journal entry to record the first annual payment?

7.2.

Refer to the following selected financial information from Gomez Electronics. Compute the company's times interest earned for Year 2.

$11,000.

Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities of $28,000; net cash used in investing activities of $10,000 and net cash used in financing activities of $12,000. If the beginning cash balance is $5,000, what is the ending cash balance?

horizontal analysis

The comparison of a company's financial condition and performance across time is known as

True

The issue price of bonds is found by computing the future value of the bond's cash payments, discounted at the contract rate of interest.

$41,900.

Use the following information to calculate cash paid for income taxes:

$196,500.

Use the following information to calculate cash paid for salaries : Salaries expense $184,000 Salaries payable, January 1 $29,000 Salaries payable, December 31 $16,500

0.54

WD Corporation reports the following year-end balance sheet data. The company's debt-to-equity ratio equals:

Proceeds from the disposal of a long-term asset with no gain or loss.

When preparing a statement of cash flows using the indirect method, which of the following should not be classified as an operating cash flow?