BBK51 Class Quiz 21-24

30 terms by nkirn

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The record date is the date
a. on which the board of directors declares the dividend.
b. used to determine who will receive the dividend
c. on which the dividend is paid
d. None of these.

B

A corporation reported a net income of $90,000 for its fiscal year and declared and paid cash dividends of $60,000. A stock dividend recorded at $30,000 was also distributed during the year. If the beginning balance of the Retained Earnings account was $140,000, the ending balance is
A. $230,000
B. $170,000
C. $140,000
D. $130,000

C

Whitewash Development Corporation has outstanding 10,000 shares of $10 par 5% cumulative preferred stock, and 100,000 common shares at $1 par value. Year 1 the firm paid no dividends. After the end of year 2 the corporation declared and paid dividends of $2,500 total. After year 3 the firm declared and paid total dividends of $50,000. The amount per share to be paid to common shareholders after year 3 is:
A. $1.25
B. $0.50
C. $0.375
D. $1.00

C

Which of the following statements regarding the income statements of corporations is correct?
A. Some corporations include cost of goods sold with the operating expenses.
B. Some corporations show income tax expense as an operating expense rather than as a deduction from net income before income tax.
C. If a gain or loss results from a transaction that is highly unusual, is clearly unrelated to routine operations, and is not expected to occur again in the near future, the gain or loss is shown in a separate section called Extraordinary, Nonrecurring
D. All of these statements are correct.

D

A corporation reacquired 400 shares of its $100 par-value common stock for $105 a share. The entry to record this transaction includes a
A. debit to Treasury Stock�Common for $40,000
B. debit to Treasury Stock�Common for $42,000
C. credit to Paid-in Capital for Treasury Stock Transactions�Common for $40,000
D. credit to Treasury Stock�Common for $42,000.

B

The Treasury Stock account is shown on the balance sheet as
A. an asset
B. an addition to the Common Stock and Preferred Stock accounts in the Stockholders' Equity section
C. a deduction from the Retained Earnings in the Stockholders' Equity section
D. a deduction from the sum of all other items in the Stockholders' Equity section

D

Whitewash Development Corporation has outstanding 10,000 shares of $10 par value 5% cumulative preferred stock, and 100,000 common shares at $1 par value. Year 1 the firm paid no dividends. After the end of year 2 the corporation declared and paid dividends of $2,500 total. After year 3 the firm declared and paid total dividends of $50,000. At the end of year 2, total dividends of ____ were in arrears.
A. $5,000
B. $2,500
C. $0
D. $7,500

D

If the corporation's income tax computed at the end of the year is less than the total of quarterly deposits, the necessary adjustment will result in a
A. debit to Income Tax Expense.
B. credit to Income Tax Payable.
C. debit to Income Tax Refund Receivable.
D. credit to Income Tax Refund Receivable.

C

The entry to record the declaration of a cash dividend consists of a debit to
A. Dividend Expense and a credit to Cash.
B. Retained Earnings and a credit to Common Stock Dividend Distributable.
C. Dividends Payable and a credit to Retained Earnings.
D. Retained Earnings and a credit to Dividends Payable.

D

Income tax expense is reported on the income statement as
A. a deduction at the bottom of the income statement
B. an operating expense
C. Either of the above
D. Neither of the above

C

1. A corporation received $50,000 in cash when it sold a building and paid $90,000 in cash when it purchased some new machinery. As a result, the statement of cash flows would report
a.$40,000 as the net cash used in financing activities
b.$40,000 as the net cash provided by investing activities
c.$40,000 as the net cash used in investing activities
d.$40,000 as the net cash provided by financing activities

C

The net cash provided by operating activities is affected by
a.a change in merchandise inventory.
b.a purchase of land for cash
c.the issue of bonds payable for cash
d.proceeds of cash investments by stockholders

A

When the net cash provided by operating activities is determined, the amortization of bond premium
a.should be added to the net income
b.should be subtracted from the net income
c.should not be used in the calculation
d.be subtracted from the net cash amount after other calculations have been made

B

Transactions for the acquisition or disposal of long-term assets are
a. operating activities
b.investing activities
c.financing activities
d.outflows or uses of cash

B

Doff Manufacturing Co. sold equipment that cost $12,000 for $3,000. Depreciation of $10,000 had been taken on the equipment. How is the Cash Flows from Operating Activities affected?
A. The loss of $1,000 is added to Net Income
B. The gain of $ 1,000 is added to Net Income
C. The gain of $ 1,000 is deducted from Net Income
D. The loss of $1,000 is deducted from Net Income

C

Polyglot Services, Inc. sold equipment that cost $45,600 for $12,450. Depreciation on the equipment from purchase to date of sale amounted to $35,000. What amount is reported in the Cash Flows from Investing Activities section of the Statement of Cash Flows?
A.$12,450
B.$ 0
C.$ 1,850
D.$ 10,600

A

Eleemosynary Organization acquired land valued at $56,000 for 4,200 shares of its stock. Where on the Statement of Cash flows does this transaction activity appear?
A .Operating Activities
B .Investing Activities
C .Financing Activities
D .Disclosures

D

Chattel Company sold for $7,000 equipment that originally cost $40,000 and had depreciation in the amount of $34,000 taken. What amount is reported in the Cash Flows from Financing Activities section of the Statement of Cash Flows?
A. $ 6,000
B. $ 5,000
C. $ 0
D. $ 1,000

C

Cash and cash equivalents, as used on the statement of cash flows, consist of
A. only currency and bank accounts
B. only bank accounts
C. currency, bank accounts, and all investments
D. currency, bank accounts and short-term, highly liquid investments

D

When the net cash provided by operating activities is determined, an increase in income taxes payable should
A. be subtracted from the net cash amount after other calculations have been made
B. be subtracted from the net income
C. not be used in the calculation
D. be added to the net income

D

Low inventory turnover compared with the industry average might reflect
A. obsolete goods
B. poor purchasing procedures
C. excess merchandise
D. All of these

...

What is a ratio that measures financial strength?
A. ratio of stockholders' equity to total liabilities
B. current ratio
C. working capital
D. rate of return on sales

...

3. A firm has net sales of $90, Cost of Goods Sold of 54, Earnings Before Interest and Taxes of 11, Bond Interest of 2, and Income Taxes of 3. In addition, the firm has Current Assets of $37 which includes ending Merchandise Inventory of 12 (beginning inventory was 14), Fixed Assets of 13 (after Accumulated Depreciation of 7), Current Liabilities of 20, Long-term Liabilities of 10, and Total Common Stockholder's Equity of 20. It's Inventory Turnover is:
A. 4.5 times
B. 4.15 times
C. 3.86 times
D. 7.5 times

...

4. Trend analysis looks at
A. selected ratios over a period of time
B. two years of information for comparison
C. two or more companies for comparison
D. profitability by industry

...

A company has total assets of $120,000, current assets of $80,000, total liabilities of $50,000, and current liabilities of $25,000. What is the current ratio?
A. 4.80 to 1
B. 3.20 to 1
C. 2.40 to 1
D. 1.60 to 1

...

6. Which of the following is most likely to indicate that a firm is experiencing difficulty in collecting its receivables?
A. Its accounts receivable turnover decreases from 10 to 8
B. Its accounts receivable turnover increases from 8 to 10
C. Its average collection period decreases from 36 to 32
D. Its average collection period increases from 25 to 28

...

7. A firm has cash of $10, accounts receivable of 15, and merchandise inventory of 12. The firm also has current liabilities of $20 and long-term liabilities of $10. Its working capital is:
A. $7
B. $5
C. $27
D. $17

...

8. If total merchandise available for sale is 72 percent of net sales and cost of goods sold is 64 percent of net sales, gross profit on sales is
A. 8 percent of net sales
B. 36 percent of net sales
C. 28 percent of net sales
D. 20 percent of net sales

...

9. A firm has net sales of $90, Cost of Goods Sold of 54, Earnings Before Interest and Taxes of 11, Bond Interest of 2, and Income Taxes of 3. In addition, the firm has Current Assets of $37 which includes ending Merchandise Inventory of 12 (beginning inventory was 14), Fixed Assets of 13 (after Accumulated Depreciation of 7), Current Liabilities of 20, Long-term Liabilities of 10, and Total Common Stockholder's Equity of 20. Its Asset Turnover is:
A. 3.0 times
B. 2.43 times
C. 1.8 times
D. 6.92

...

10. In a vertical analysis of data, the cost of goods sold most likely would be expressed as a percentage of
A. net sales
B. net income
C. gross profit on sales
D. total expenses

...

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