MGAC01H3 Study Guide - Midterm Guide: Retained Earnings, Promissory Note, Deferred Income

38 views2 pages

cyanhamster282

26 Dec 2016

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

Current assets: cash and other assets ordinarily realizable within one year from the date of the balance sheet or within the normal operating cycle where that is longer than a year. Five major items in the current assets section: 3. accounts receivable: at the estimated amount that is collectible. 4. inventories: generally at the lower of cost and net realizable value. 1. held for sale in the ordinary course of business, 2. in the process of production for such sale, or. 3. in the form of materials or supplies to be consumed in the production process or in the rendering of service. Inventories are valued at the lower of cost and net realizable value. Prepaid exoenses: expenditures already made for benefits (usually services) that will be received within one year or the operating cycle, whichever is longer. Intangible assets: nonmonetary assets that lack physical substance and usually have a higher degree of uncertainty concerning their future benefits.

Related Questions

4)Managers place a high priority on internal control systems because the systems assistmanagers in all of the following except:

A)Protecting assets.

B)Urging adherence to company policies.

C)Promoting efficient operations.

D)Ensuring reliable accounting.

E)Assuring that no loss will occur.

5)A properly designed internal control system:

A)Insures profitable operations.

B)Eliminates the need for an audit.

C)Is not necessary if the company uses a computerized system.

D)Requires the use of non-computerized systems.

E)Lowers the company's risk of loss.

6)A company's internal control system:

A)Eliminates the need for audits.

B)Eliminates the need for managers' certification of controls.

C)Monitors company and employee performance.

D)Eliminates human error.

E)Eliminates the company's risk of loss.

7)The impact of technology on internal controls includes:

A)Elimination of fraud.

B)Elimination of the need to bond employees.

C)Reduced processing errors.

D)Elimination of separation of duties.

E)Elimination of the need for regular audits.

8)Internal control systems are:

A)Required only if a company plans to engage in interstate commerce.

B)Developed by the Internal Revenue Service for all U.S. companies.

C)Required by Sarbanes-Oxley (SOX) to be documented and certified if the

company's stock is traded on an exchange.

D)Developed by the Securities and Exchange Commission for public companies.

E)Developed by the Small Business Administration for non-public companies.

9)Cash equivalents:

A)Include 6-month certificates of deposit.

B)Are short-term, highly liquid investment assets.

C)Include money orders.

D)Include checking accounts.

E)Are recorded in petty cash.

10)Cash equivalents meet all of the following criteria except:

A)Include short-term investments purchased within 3 months of their maturity

dates.

B)Are readily convertible to a known cash amount.

C)Have a market value that is not sensitive to interest rate changes.

D)Include short-term U.S. treasury bills.

E)Are more liquid than cash.

azureporcupine205

What are the Market Value Leverage Ratios (Value of Debt to Value of Equity, Value of Debt to Value of Assets)) for the following 2015 and 2016 financial data? (PLEASE SHOW WORK SO I CAN UNDERSTAND HOW THIS WAS DONE. Thank you)

AMAZON.COM INC (AMZN) CashFlowFlag INCOME STATEMENT
Fiscal year ends in December. USD in millions except per share data.	2015-12	2016-12
Revenue	107006	135987
Cost of revenue	71651	88265
Gross profit	35355	47722
Operating expenses
Sales, General and administrative	20411	27284
Other operating expenses	12711	16252
Total operating expenses	33122	43536
Operating income	2233	4186
Interest Expense	459	484
Other income (expense)	-206	190
Income before income taxes	1568	3892
Provision for income taxes	950	1425
Other income	-22	-96
Net income from continuing operations	596	2371
Net income	596	2371
Net income available to common shareholders	596	2371
Earnings per share
Basic	1.28	5.01
Diluted	1.25	4.9
Weighted average shares outstanding
Basic	467	474
Diluted	477	484
EBITDA	8308	12492

AMAZON.COM INC (AMZN) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. USD in millions except per share data.	2015-12	2016-12
Assets
Current assets
Cash
Cash and cash equivalents	15890	19334
Short-term investments	3918	6647
Total cash	19808	25981
Receivables	6423	8339
Inventories	10243	11461
Deferred income taxes
Total current assets	36474	45781
Non-current assets
Property, plant and equipment
Land	9770	13998
Fixtures and equipment	18417	25989
Other properties	1866	2454
Property and equipment, at cost	30053	42441
Accumulated Depreciation	-8215	-13327
Property, plant and equipment, net	21838	29114
Goodwill	3759	3784
Intangible assets
Deferred income taxes	1084
Other long-term assets	2289	4723
Total non-current assets	28970	37621
Total assets	65444	83402
Liabilities and stockholders' equity
Liabilities
Current liabilities
Accounts payable	20397	25309
Accrued liabilities	10384	13739
Deferred revenues	3118	4768
Total current liabilities	33899	43816
Non-current liabilities
Long-term debt	8235	7694
Capital leases	5948	7519
Deferred taxes liabilities		392
Other long-term liabilities	3978	4696
Total non-current liabilities	18161	20301
Total liabilities	52060	64117
Stockholders' equity
Common stock	5	5
Additional paid-in capital	13394	17186
Retained earnings	2545	4916
Treasury stock	-1837	-1837
Accumulated other comprehensive income	-723	-985
Total stockholders' equity	13384	19285
Total liabilities and stockholders' equity	65444	83402

AMAZON.COM INC (AMZN) Statement of CASH FLOW
Fiscal year ends in December. USD in millions except per share data.	2015-12	2016-12
Cash Flows From Operating Activities
Net income	596	2371
Depreciation & amortization	6281	8116
Investments losses (gains)	5
Deferred income taxes	81	-246
Stock based compensation	2119	2975
Accounts receivable	-1755	-3367
Inventory	-2187	-1426
Accounts payable	4294	5030
Accrued liabilities	913	1724
Other working capital	1292	1955
Other non-cash items	281	-689
Net cash provided by operating activities	11920	16443
Cash Flows From Investing Activities
Investments in property, plant, and equipment	-4589	-6737
Acquisitions, net	-795	-116
Purchases of investments	-4091	-7756
Sales/Maturities of investments	3025	4733
Net cash used for investing activities	-6450	-9876
Cash Flows From Financing Activities
Long-term debt issued	353	621
Long-term debt repayment	-4235	-4361
Excess tax benefit from stock based compensation	119	829
Repurchases of treasury stock
Net cash provided by (used for) financing activities	-3763	-2911
Effect of exchange rate changes	-374	-212
Net change in cash	1333	3444
Cash at beginning of period	14557	15890
Cash at end of period	15890	19334
Free Cash Flow
Operating cash flow	11920	16443
Capital expenditure	-4589	-6737
Free cash flow	7331	9706
Supplemental schedule of cash flow data
Cash paid for income taxes	273	412
Cash paid for interest	478	496

maroonferret916

8. Your company issued bonds at a premium. Which of the following statements is NOT true?
A. The contra account, premium on bonds payable, is amortized each year by shifting part of its balance to interest expense.
B. On the date of issuance, the stated interest rate was greater than the market interest rate.
C. As the current date approaches the maturity date, the carrying value of the bond approaches the face value of the bond.
D. The account used to record the premium has a normal debit balance.

9. Which of the following would help a company improve its quick ratio without necessarily lowering the liability risk to a creditor?
A. Borrowing money on a long-term note just before the end of the accounting period.
B. Shifting resources from long-term assets to short-term assets such as supplies and inventory.
C. Shifting obligations from long-term liabilities to short-term liabilities.
D. Acquiring inventory by issuing a long-term note.

10. Which of the following is not used to calculate the times interest earned ratio?
A. Net income.
B. Income tax expense.
C. Interest earned on investments.
D. Interest expense.

11. Which of the following statements regarding treasury stock is true?
A. When a company reissues treasury stock for more than it originally paid for the stock, it does not report a gain.
B. When a company purchases treasury stock or pays a dividend, it increases total stockholders' equity.
C. Treasury stock is reported as an asset on the balance sheet.
D. Treasury stock is reported as issued and outstanding stock.

16. Typically, all other things equal, a profitable company that pays little or no dividends:
A. is a bad investment.
B. will reinvest profits which can lead to greater growth potential.
C. will experience relatively stable stock prices over time.
D. will appeal to investors who desire distributions of profit.

17. If a corporation declares and distributes a 10% stock dividend on its common shares, the account debited is:
A. Dividends Payable.
B. Common Stock.
C. Share Capital.
D. Retained Earnings.

20. Limited Liability Companies (LLCs) are like general partnerships in that:
A. income tax is not paid by the company itself.
B. the business has a separate legal identity.
C. liability is limited.
D. amounts paid to the owners are recorded as salaries expense.

21. Which of the following statements regarding financing activities is NOT true?
A. Cash dividends paid to a company's stockholders are reported as cash outflows from financing activities.
B. When a company issues stock for cash, it reports a cash inflow from financing activities.
C. When a company repurchases stock with cash, it reports a cash outflow for financing activities.
D. When a company repays a loan, it reports a cash outflow from investing activities.

22. Which of the following statements regarding quality of income ratio is NOT true?
A. A quality of income ratio will increase if a company's working capital management allows current assets such as inventory to increase out of control.
B. Variations in the ratio can be seasonal and are the result of sales fluctuations rather than reasons for alarm.
C. The quality of income ratio measures the portion of income that was generated in cash.
D. The quality of income ratio is useful when compared to industry competitors or to prior periods.

23. Which of the following types of information is not provided by the statement of cash flows?
A. Company management of current assets and liabilities.
B. Expenditures on long-term assets.
C. Current profitability as measured by specific revenues and expenses.
D. Reliance on external financing.

24. Cash and cash equivalents include:
A. assets that have stable long-term value.
B. assets that are short-term, highly liquid, and are purchased within three months of maturity.
C. assets that consistently grow in value over the long run.
D. assets that are expected to be used up within a year.

MGAC01H3 Study Guide - Midterm Guide: Retained Earnings, Promissory Note, Deferred Income

Document Summary

Get access

Related Documents

MGAC01H3 Chapter Notes - Chapter 7: Current Asset, Market Liquidity, Financial Instrument

MGAC01H3 Chapter : tb07.docx

MGAC01H3 Study Guide - Final Guide: Accounts Receivable, Deferral, Accounts Payable

Related Questions