Final\u00a0 Part 1\t\t\t\t\t\t\t\t\tQuestion 1\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tUnder the corporate form of business organization\t\t\t\t\t\t\t\t\tQuestion 2 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tAccountants do not attempt to measure the change in a plant asset’s market value during ownership because\t\t\t\t\t\t\t\t\tQuestion 3\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tBudget reports provide the feedback needed by management to see whether actual operations are on course.\t\t\t\t\t\t\t\t\tQuestion 4\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tIntangible assets are rights, privileges, and competitive advantages that result from ownership of long-lived assets without physical substance.\t\t\t\t\t\t\t\t\tQuestion 5\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA corporation is not an entity that is separate and distinct from its owners\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tQuestion 6\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe market rate of interest is often called the\t\t\t\t\t\t\t\t\tQuestion 7\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA current liability is a debt that can reasonably be expected to be paid\t\t\t\t\t\t\t\t\tQuestion 8 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA budget can be used as a basis for evaluating performance.\t\t\t\t\t\t\t\t\tQuestion 9\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tVertical analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place.\t\t\t\t\t\t\t\t\tQuestion 10\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tBonds with a face value of $400,000 and a quoted price of 104\u00bc have a selling price of\t\t\t\t\t\t\t\t\tQuestion 11\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe current cash debt coverage ratio is considered a better representative of liquidity than the current ratio because it involves the entire year rather than a balance at one point in time.\t\t\t\t\t\t\t\t\tQuestion 12\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tOn January 1, 2014, Ermler Company, a calendar-year company, issued $1,000,000 of notes payable, of which $250,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2014, is\t\t\t\t\t\t\t\t\tQuestion 13\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tOne objective of the income statement is to separate the results of continuing operations from those of discontinued operations.\t\t\t\t\t\t\t\t\tQuestion 14 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tAll of the following are true regarding financial statement analysis ratios associated with liabilities except\t\t\t\t\t\t\t\t\tQuestion 15\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.\t\t\t\t\t\t\t\t\tQuestion 16\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA master budget is most useful in evaluating a manager’s performance in controlling costs.\t\t\t\t\t\t\t\t\tQuestion 17 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe master budget reflects management’s long-term plans encompassing five years or more.\t\t\t\t\t\t\t\t\tQuestion 18\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe debt to assets ratio measures the percentage of the total assets provided by creditors\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tQuestion 19\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA company whose current liabilities exceed its current assets may have a liquidity problem.\t\t\t\t\t\t\t\t\tQuestion 20\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tDuring 2014, Phelps Corporation reported net sales of $3,000,000, net income of $1,320,000, and depreciation expense of $80,000. Phelps also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and accumulated depreciation of $500,000. Phelps’s asset turnover ratio is\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tFinal\u00a0 Part 2\t\t\t\t\t\t\t\t\tQuestion 1\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA manager of a cost center is evaluated mainly on\t\t\t\t\t\t\t\t\tQuestion 2 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tBogey Co. recorded operating data for its Cheap division for the year. Bogey requires its return to be 10%.\t\t\t\t\t\u00a0\t\t\t\t\tSales \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 $ 1,400,000\t\t\t\t\tControllable margin \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd160,000\t\t\t\t\tTotal average assets \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 4,000,000\t\t\t\t\tFixed costs \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd 100,000\t\t\t\t\t\u00a0\t\t\t\t\tWhat is the ROI for the year?\t\t\t\t\t\t\t\t\tQuestion 3 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tRatios are used as tools in financial analysis\t\t\t\t\t\t\t\t\tQuestion 4 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tWhich of the following is not typically a characteristic experienced by a company during the growth phase of the corporate life cycle?\t\t\t\t\t\t\t\t\tQuestion 5\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA master budget consists of\t\t\t\t\t\t\t\t\tQuestion 6 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe date on which a cash dividend becomes a binding legal obligation is on the\t\t\t\t\t\t\t\t\tQuestion 7 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tIf there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?\t\t\t\t\t\t\t\t\tQuestion 8 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tAll of the following statements regarding changes in accounting principles are true except which of the following?\t\t\t\t\t\t\t\t\tQuestion 9 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tOn the basis of the budget reports,\t\t\t\t\t\t\t\t\tQuestion 10 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tHolden Packaging Corporation began business in 2014 by issuing 80,000 shares of $5 par common stock for $8 per share and 20,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2014 balance sheet, Holden Packaging would report\t\t\t\t\t\t\t\t\tQuestion 11 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe primary purpose of the statement of cash flows is to\t\t\t\t\t\t\t\t\tQuestion 12\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tCochran Corporation, Inc. has the following income statement (in millions):\t\t\t\t\t\t\t\t\tCOCHRAN CORPORATION, INC.\t\t\t\t\t\t\t\t\tIncome Statement\t\t\t\t\t\t\t\t\tFor the Year Ended December 31, 2014\t\t\t\t\t\t\t\t\t\t\t\t\t\tNet Sales \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0$240\t\t\t\t\tCost of Goods Sold \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 80\t\t\t\t\tGross Profit \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 160\t\t\t\t\tOperating Expenses \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 65\t\t\t\t\tNet Income \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 $\u00a0 95\t\t\t\t\t\u00a0\t\t\t\t\tUsing vertical analysis, what percentage is assigned to net income?\t\t\t\t\t\t\t\t\tQuestion 13\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures.\t\t\t\t\t\u00a0\t\t\t\t\tTotal asset \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 \ufffd\u00a0\u00a0$400,000\t\t\t\t\tStockholders’ equity”\ufffdcommon \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 200,000\t\t\t\t\tTotal stockholders’ equity \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd 280,000\t\t\t\t\tSales revenue \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 120,000\t\t\t\t\tNet income \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a025,000\t\t\t\t\tNumber of shares of common stock \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 8,000\t\t\t\t\tCommon dividends \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 9,000\t\t\t\t\tPreferred dividends \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 6,000\t\t\t\t\t\u00a0\t\t\t\t\tWhat is Marsh’s payout ratio?\t\t\t\t\t\t\t\t\tQuestion 14 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA flexible budget\t\t\t\t\t\t\t\t\tQuestion 15 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA comparison with other companies that provides insight into a company’s competitive position is most commonly known as which of the following types of comparisons?\t\t\t\t\t\t\t\t\tQuestion 16\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tAssume the following sales data for a company:\t\t\t\t\t\u00a0\t\t\t\t\t2015 \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 $910,000\t\t\t\t\t2014 \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 $770,000\t\t\t\t\t2013 \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 700,000\t\t\t\t\t\u00a0\t\t\t\t\tIf 2013 is the base year, what is the percentage increase in sales from 2013 to 2014?\t\t\t\t\t\t\t\t\tQuestion 17 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tLaser Performance Inc. has the following information available (amount in thousands).\t\t\t\t\t\u00a0\t\t\t\t\tNet Income \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 $30,000\t\t\t\t\tAverage Total Liabilities \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 80,000\t\t\t\t\tAverage Current Liabilities \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd 36,000\t\t\t\t\tCash Provided by Operations \ufffd \ufffd \ufffd \ufffd \ufffd 48,000\t\t\t\t\tCash Sales \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 130,000\t\t\t\t\tCapital Expenditures \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 22,000\t\t\t\t\tDividends Paid \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd 6,000\t\t\t\t\t\u00a0\t\t\t\t\tWhat is the current cash debt coverage?\t\t\t\t\t\t\t\t\tQuestion 18\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tWhich of the following income statement figures would probably be the best indicator of a company’s future performance?\t\t\t\t\t\t\t\t\tQuestion 19 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tWhich one of the following is not a benefit of budgeting?\t\t\t\t\t\t\t\t\tQuestion 20\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tThe single most important output in preparing financial budgets is the\t\t\t\t\t\t\t\t\tQuestion 21 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tZoum Corporation had the following transactions during 2014:\t\t\t\t\t\u00a0\t\t\t\t\t1 – Issued $125,000 of par value common stock for cash.\t\t\t\t\t2 – Recorded and paid wages expense of $60,000.\t\t\t\t\t3 – Acquired land by issuing common stock of par value $50,000.\t\t\t\t\t4 – Declared and paid a cash dividend of $10,000.\t\t\t\t\t5 – Sold a long-term investment (cost $3,000) for cash of $3,000.\t\t\t\t\t6 – Recorded cash sales of $400,000.\t\t\t\t\t7 – Bought inventory for cash of $160,000.\t\t\t\t\t8 – Acquired an investment in Zynga stock for cash of $21,000.\t\t\t\t\t9 – Converted bonds payable to common stock in the amount of $500,000.\t\t\t\t\t10 – Repaid a 6 year note payable in the amount of $220,000.\t\t\t\t\t\u00a0\t\t\t\t\tWhat is the net cash provided by operating activities?\t\t\t\t\t\t\t\t\tQuestion 22\t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tA critical factor in budgeting for a service firm is to\t\t\t\t\t\t\t\t\tQuestion 23 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tIf the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to\t\t\t\t\t\t\t\t\tQuestion 24 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tWhich one of the following items is not necessary in preparing a statement of cash flows?\t\t\t\t\t\t\t\t\tQuestion 25 \t\t\t\t\t\t\t\t\t\u00a0\t\t\t\t\t\t\t\t\tQuincy Corp. earned controllable margin of $500,000 on sales of $6,400,000. The division had average operating assets of $5,200,000. The company requires a return on investment of at least 8%. How much is residual income?<\/p>\n","protected":false},"excerpt":{"rendered":"
Final\u00a0 Part 1 Question 1 \u00a0 Under the corporate form of business organization Question 2 \u00a0 Accountants do not attempt to measure the change in a plant asset’s market value during ownership because Question 3 \u00a0 Budget reports provide the Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-200174","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=200174"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200174\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}