1. (TCO A) Which one of the following is an advantage of corporations relative to partnerships and sole proprietorships? (Points : 5)\tReduced legal liability for investors\tHarder to transfer ownership\tLower taxes\tMost common form of organization\t\t2. (TCO A) When a corporation distributes a dividend, _____. (Points : 5)\tthe most common form of distribution is a cash dividend\tthe Dividends account will be increased with a credit\tthe Retained Earnings account will be directly increased with a debit\tthe Dividends account will be decreased with a debit\t\t3. (TCOs A, B) Below is a partial list of account balances for Cerner Company:\t\tCash $5,000\tPrepaid insurance 500\tAccounts receivable 2,500\tAccounts payable 2,000\tNotes payable 3,000\tCommon stock 1,000\tDividends 500\tRevenues 15,000\tExpenses 12,500\t\tWhat did Cerner Company show as total credits? (Points : 5)\t$21,500\t$21,000\t$20,500\t$22,000\t4. (TCOs B, E) Using accrual accounting, expenses are recorded and reported only _____. (Points : 5)\twhen they are incurred, whether or not cash is paid\twhen they are incurred and paid at the same time\tif they are paid before they are incurred\tif they are paid after they are incurred\t\t5. (TCO D) Three companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5)\tLIFO will have the highest ending inventory\tFIFO will have the highest cost of goods sold\tAll three companies will have the same value for ending inventory.\taverage cost will have an ending inventory value that falls between FIFO and LIFO\t\t6. (TCOs A, E) Equipment with a cost of $192,000 has an estimated salvage value of $18,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? (Points : 5)\t$48,000\t$52,500\t$49,500\t$43,500\t\t7. (TCOs D, G) Joyce Corporation issues 1,000 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 102. The journal entry to record the issuance will show a _____. (Points : 5)\tdebit to Cash of $1,020,000\tdebit to Discount on Bonds Payable for $20,000\tcredit to Bonds Payable for $1,020,000\tcredit to Cash for $1,000,0008. (TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points : 5)\t$240,000\t$250,000\t$310,000\t$230,000\t\t9. (TCO F) One variation of the horizontal analysis is known as _____. (Points : 5)\tnonlinear analysis\tvertical analysis\ttrend analysis\tcommon-size analysis\t\t10. (TCO F) Comparisons of data within a company are an example of the following comparative basis. (Points : 5)\tIndustry averages\tIntercompany\tIntracompany\tInterregional\t\t11. (TCO F) Which one of the following is not a characteristic generally evaluated in ratio analysis? (Points : 5)\tLiquidity\tProfitability\tMarketability of the product\tSolvency\t\t12. (TCO F) Short-term creditors are usually most interested in assessing _____. (Points : 5)\tsolvency\tliquidity\tmarketability\tprofitability\t\t13. (TCO F) Long-term creditors are usually most interested in evaluating _____. (Points : 5)\tliquidity\tmarketability\tprofitability\tsolvency\t\t14. (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5)\tfind out the present value of all of the future cash payments promised by the bond\tcalculate the present value of the principal only\tcalculate the present value of the interest only\tmultiply the bond price by the interest rate\t1. (TCO A) Which one of the following is an advantage of corporations relative to partnerships and sole proprietorships? (Points : 5)\t\tReduced legal liability for investors\tHarder to transfer ownership\tLower taxes\tMost common form of organization\t2. (TCO A) When a corporation distributes a dividend, _____. (Points : 5)\t\tthe most common form of distribution is a cash dividend\tthe Dividends account will be increased with a credit\tthe Retained Earnings account will be directly increased with a debit\tthe Dividends account will be decreased with a debit\t3. (TCOs A, B) Below is a partial list of account balances for Cerner Company:\t\tCash $5,000\tPrepaid insurance 500\tAccounts receivable 2,500\tAccounts payable 2,000\tNotes payable 3,000\tCommon stock 1,000\tDividends 500\tRevenues 15,000\tExpenses 12,500\t\tWhat did Cerner Company show as total credits? (Points : 5)\t\t$21,500\t$21,000\t$20,500\t$22,000\t4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5)\t\tsales under $1,000,000\tno accountants on staff\tinsignificant receivables and payables\tall sales and purchases on account\t5. (TCO D) Three companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5)\t\tLIFO will have the highest ending inventory\tFIFO will have the highest cost of goods sold\tAll three companies will have the same value for ending inventory.\taverage cost will have an ending inventory value that falls between FIFO and LIFO\t6. (TCOs A, E) Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5)\t\t$14,160\t$11,760\t$9,840\t$9,600\t7. (TCOs D, G) Mendez Corporation issues 2,000 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 103. The journal entry to record the issuance will show a _____. (Points : 5)\t\tdebit to Cash of $2,000,000\tdebit to Premium on Bonds Payable for $60,000\tcredit to Bonds Payable for $2,000,000\tcredit to Cash for $2,060,000\t8. (TCO C) Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is_____. (Points : 5)\t\t$120,000\t$125,000\t$155,000\t$115,000\t9. (TCO F) One variation of the horizontal analysis is known as _____. (Points : 5)\t\tnonlinear analysis\tvertical analysis\ttrend analysis\tcommon-size analysis\t10. (TCO F) In a common-size balance sheet, the 100% figure is _____. (Points : 5)\t\ttotal current assets\ttotal property, plant, and equipment\ttotal liabilities\ttotal assets\t11. (TCO F) In vertical analysis, the base amount for studying salary and wages expense is generally _____. (Points : 5)\t\tnet sales\tsalary and wages expense in a previous year\tgross profit\tnet income\t12. (TCO F) A common measure of profitability is the _____. (Points : 5)\t\tcurrent ratio\tcurrent cash debt coverage ratio\treturn on common stockholder’s equity ratio\tdebt to total assets\t13. (TCO F) Return-on-assets ratio is most closely related to _____. (Points : 5)\t\tprofit margin and debt-to-total-assets ratio\tprofit margin and asset-turnover ratio\ttimes interest earned and debt-to-stockholders equity ratio\tprofit margin and free cash flow\t14. (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5)\t\tfind out the present value of all of the future cash payments promised by the bond\tcalculate the present value of the principal only\tcalculate the present value of the interest only\tmultiply the bond price by the interest rate\t1. (TCO A) An advantage of the corporate form of business is that _____. (Points : 5)\tit has limited life\tits owner’s personal resources are at stake\tits ownership is easily transferable via the sale of shares of stock\tit is simple to establish\t2. (TCO A) When a corporation distributes a dividend, _____. (Points : 5)\tthe most common form of distribution is a cash dividend\tthe Dividends account will be increased with a credit\tthe Retained Earnings account will be directly increased with a debit\tthe Dividends account will be decreased with a debit\t3. (TCOs A, B) Below is a partial list of account balances for Denton Company:\t\tCash $7,000\tPrepaid insurance 700\tAccounts receivable 3,500\tAccounts payable 2,800\tNotes payable 4,200\tCommon stock 1,400\tDividends 700\tRevenues 21,000\tExpenses 17,500\t\tWhat did Denton Company show as total credits? (Points : 5)\t$30,100\t$29,400\t$28,700\t$30,800\t4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5)\tsales under $1,000,000\tno accountants on staff\tinsignificant receivables and payables\tall sales and purchases on account\t5. (TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the lowest amount of income tax expense? (Points : 5)\tFIFO\tLIFO\tThe average cost method\tIncome tax expense for the period will be the same under all assumptions.\t6. (TCOs A, E) Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5)\t$14,160\t$11,760\t$9,840\t$9,600\t7. (TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 96. The journal entry to record the issuance will show a _____. (Points : 5)\tdebit to Cash of $500,000\tcredit to Discount on Bonds Payable for $20,000\tcredit to Bonds Payable for $480,000\tdebit to Cash for $480,000\t8. (TCO C) Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points : 5)\t$120,000\t$125,000\t$155,000\t$115,000\t9. (TCO F) Which one of the following is not a tool in financial statement analysis? (Points : 5)\tHorizontal analysis\tCircular analysis\tVertical analysis\tRatio analysis\t10. (TCO F) In vertical analysis, the base amount for studying salary and wages expense is generally _____. (Points : 5)\tnet sales\tsalary and wages expense in a previous year\tgross profit\tnet income\t11. (TCO F) Ratios are most useful in identifying _____. (Points : 5)\ttrends\tdifferences\tcauses\trelationships among different numbers\t12. (TCO F) A common measure of liquidity is _____. (Points : 5)\treturn on assets\tcurrent ratio\tprofit margin\tdebt to equity\t13. (TCO F) Return-on-assets ratio is most closely related to _____. (Points : 5)\tprofit margin and debt-to-total-assets ratio\tprofit margin and asset-turnover ratio\ttimes interest earned and debt-to-stockholders equity ratio\tprofit margin and free cash flow\t14. (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5)\tfind out the present value of all of the future cash payments promised by the bond\tcalculate the present value of the principal only\tcalculate the present value of the interest only\tmultiply the bond price by the interest rate\t\t1. (TCO A) Below you will find selected information (in millions) from Coca-Cola Co.\u2019s 2012 Annual Report:\t…………………………………………………………………………………………………………………………………………………….\t\tRequired:\t1. Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also separate the current liabilities from the non-current liabilities and provide a total for each.\t2. Using the Balance Sheet from your answer above calculate; Current Ratio, Days in Inventory, Average Collection Period, Return on Assets Ratio, Debt to Total Assets and Return on common stockholders\u2019 equity ratio. (Make sure to show all your work)\t\t\t2. (TCO B) The following selected data was retrieved from the Wal-Mart, Inc. financial statements for the year ending January 31, 2013:\t………………………………………………………………………………………………………………………………………………………………………………………………\tRequired:\t\tUsing the information provided above:\t1. Prepare a multiple-step income statement\t2. Calculate the Profit Margin, and Gross profit rate for the company. Be sure to provide the formula you are using, show your calculations, and discuss your findings\/results.\t3. (TCO C) Please review the following real-world Hewlett Packard Statement of Cash flows and address the 2 questions below:\t……………………………………………………………………………………………………………………………………………………………………………………….\tRequired:\t1) Please calculate the percentage increase or decrease in cash for the operating, investing, and financing sections and explain the major reasons for the increase or decrease for each of these sections.\t2) Please calculate the free cash flow for 2012 and explain the meaning of this ratio.\t4. (TCO D) You are CFO of Goforit, Inc., a wholesale distribution company specializing in emerging technologies. Your CEO is a brilliant marketer, but relies on you to explain issues and choices in accounting and finance. She has heard from other members of a CEO organization to which she belongs that a company\u2019s net income can vary widely depending on which accounting choices are made from the \u201cGAAP menu.\u201d\t\tAssuming the goal is to maximize net income, choose an accounting treatment from each of the following scenarios, and explain to your CEO why the choice will produce the desired effect on reported Net Income for the current year. Include in your answer the effect of the choice on both the income statement and balance sheet.\t\tRequired:\ta. Goforit carries significant electronics inventory in a competitive environment where prices are actually falling. Which inventory valuation method would you choose\u2014LIFO, FIFO, or average cost? Assume that unit purchases exceed unit sales.\t\tb. Goforit has a large investment in warehouse equipment including conveyor belts, forklifts, and automated packaging systems. Which depreciation method would you choose: Straight line (SL) or double declining balance (DDB)?\t5. (TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below.\t…………………………………………………………………………………………………………………………………………………………………………………………\tRequired:\t1) Please explain the meaning of each of the Pfizer ratios above.\t2) Please state which company performed better for each ratio.<\/p>\n","protected":false},"excerpt":{"rendered":"
1. (TCO A) Which one of the following is an advantage of corporations relative to partnerships and sole proprietorships? (Points : 5) Reduced legal liability for investors Harder to transfer ownership Lower taxes Most common form of organization 2. (TCO 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-201056","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201056","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=201056"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201056\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=201056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=201056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=201056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}