Finance Homework
Wages are considered
an operating expense.
An obligation the firm is expected to meet within the next year is called
A current liability
A firm's blank are the value of the firm's long term assets (including property, plant and equipment) minus the assets' blank.
A firm's net fixed assets are the value of the firm's long term assets minus the assets' accumulated depreciation.
The firm issued new long term bonds at their par value of 100,000. Blank will increase by 100 Blank will increase by 100
Cash will increase by 100 Long term debt will increase by 100
This month's sales are 200, although the firm has received only 150 in cash. Blank will increase by 150 Blank will increase by 50 Blank will increase by 200
Cash will increase by 150 Accounts payable by 50 Sales revenue will increase by 200
A customer pays 75 to settle its account with the firm. Blank will increase by 7500. Blank will decrease by 7500.
Cash will increase by 75 Accounts payable will decrease by 75.
The account labeled blank represents an ownership stake in the company.
Common stock
If you add up all the depreciation expenses from each year of a firm's existence, that equals accumulated depreciation.
False. Accumulated depreciation represents the sum of expenses taken on the firms fixed assets however, depreciation expenses are retired and go off the balance sheet.
Buys back shares of common stock
Financing
Preferred stock common stock Notes payable
Financing
Issues new notes payable
Financing.
The firm buys land with 100,000 in cash to use in a future project: Blank will increase by 100000. Blank will decrease by 100000
Fixed assets will increase by 100 Cash will decrease by 100
Buys new equipment and machinery:
Investing
Land, equiptment and machinery
Investing
Sells tract of land it has held for years:
Investing
Issues new shares of perferred stock
financing
On the income statement, interest expense is blank, preferred dividends and common dividends are blank
interest expense is tax deductible and reduces income tax. Common dividends and preferred dividends are not Tax deductible and are after tax.
With its earnings, a firm has a decision to make about whether to pay common dividends or
reinvest in future growth.
If a firm buys materials on credit from a supplier, blank has been created.
Account payable
The firm uses credit to purchase raw materials for production worth 15,000. Blank will increase by 15000 Blank will increase by 15000
Accounts payable increases by 15,000. Inventory will increase by 15
The firm sells inventory valued at 40 to a customer for 50 in cash. Blank will decrease by 40 Blank will increase by 4o Blank will increase by 5o Blank will increase by 50
Cost of goods sold increase by 40 Inventory will decrease by 40. Cash wiill increase Sales rev will incresae by 50
Improves profit margin and increases net income:
Operating
Increases its use of trade credit from suppliers
Operating
Tightens its credit policy with its customers:
Operating
The firm pays monthly rent and utilities of 6000 in cash. Blank will increase by 6. Blank will decrease by 6.
Operating expense will increase by 6 Cash will decrease by 6
buying on credity (account payable) Earning net income Changing credit policy (accounts receivable)
Operating.
A company usually expenses a blank when it incurs them, because the future benefits that this spending is expected to bring are very uncertain and difficult to time.
Research and development expense.
