1. Harrison Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2014:
Retained earnings, beginning balance: $125,000
Retained earnings, ending balance: $117,000
Company reported net loss of $8,000 for the year.
What was the amount of dividends paid during the year? (Points : 1)
$5,000
$2,000
Zero
$3,000
None of these is correct
2. Zebra, Inc. has Cost of goods sold for the year of $1,900,000. The average inventory for the year is $129,000. The inventory turnover for the year is: (Points : 1)
0.1.
14.7.
33.8.
65.5.
None of these is correct
3. Peartree Company provides the following income statement for the year 2014:
Sales revenue $240,000
Cost of goods sold 110,000
Gross profit $130,000
Operating expenses
Salary expense 45,000
Depreciation expense 12,000
Other operating expenses 23,000
Total operating expenses 80,000
Operating income 50,000
Gain on sale of plant assets 5,000
Interest expense (1,000)
Net income before income tax $54,000
Income tax expense 5,000
Net income (loss) $49,000
How much is the times-interest-earned ratio? (Points : 1)
0.02
49.0
50.0
0.25
None of these is correct
4. The investing activities section of the statement of cash flows reflects the cash flows that increase or decrease long-term assets. (Points : 1)
True
False
5. A company reported the following amounts of net income:
2011 $18,000
2012 $24,000
2013 $26,000
Which of the following is the percentage change in net income from 2011 to 2012? (Points : 1)
33.33%
8.33%
10.00%
30.00%
None of these is correct
6. Peartree Company provides the following data:
BALANCE SHEET Dec 31, 2014 Dec 31, 2013
Cash $ 21,000 $ 18,000
Accounts receivable, net 31,000 35,000
Inventory 53,000 25,000
PP&E, net 120,000 90,000
Total assets $225,000 $168,000
Accounts payable $4,000 $ 6,000
Accrued liabilities 2,000 1,000
Long-term notes payable 84,000 90,000
Total liabilities $ 90,000 $ 97,000
Common stock $ 30,000 $ 2,000
Retained earnings 113,000 74,000
Treasury stock (8,000) (5,000)
Total stockholders’ equity $135,000 $71,000
Total liabilities and stockholders’
equity $225,000 $168,000
How much is the current ratio at year-end 2014? (Points : 1)
17.5
16.1
3.5
0.5
None of these is correct
7. Which of the following is NOT a true statement about the statement of cash flows? (Points : 1)
It shows where cash came from and how it was spent.
It reports why cash increased or decreased.
It covers a specific span of time the same as the income statement.
It shows how the profits or losses of the company were generated.
8. Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:
2014 2013 Increase/decrease
Cash $ 33,000 $ 18,000 $15,000
Accounts receivable 22,000 35,000 (13,000)
Inventory 170,000 115,000 55,000
Total assets $225,000 $168,000 $57,000
The change in inventory will be shown as a positive cash flow in the adjustments to Net income. (Points : 1)
True
False
9. A company reports total assets of $525,000 and stockholders' equity of $395,000. Which of the following is the debt ratio? (Points : 1)
0.29
0.71
0.55
0.25
None of these is correct
10. Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2014.
Net cash flows from operating activities: $32,000 positive
Net cash flows from investing activities: $38,000 negative
Net cash flows from financing activities: $ 9,000 positive
If the beginning cash balance is $18,000, what would the ending cash balance be? (Points : 1)
$21,000
$18,000
$ 3,000
$15,000
None of these is correct
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