1. Which of the following would NOT be considered a significantnon cash transaction?
Issuing debt to purchase plant assets
Exchanging plant assets
Paying stock dividends
All of the above are significant non cash transactions
2. During 2018, ABC Company reports the following activities
1. Net Income was recorded in the amount of $75,000
2. Depreciation expense was $10,000
3. Repaid a loan of $10,000 cash
4. Issued stock in exchange for $30,000
5. Sold equipment which had a book value of $20,000 for $17,000(recognizing a $3,000 loss).
6. Accounts Receivable decreased by $5,000
7. Accounts Payable decreased by $2,000
Calculate the cash provided by operating activities given theabove information.
3. ABC Company reports cash flows from operating activities of$30,000. In addition, ABC Company pays dividends of $5,000 and doesnot purchase any fixed assets during the year. Interest expense forthe year was $7,000. Calculate free cash flows for ABC Company.
4. The net income reported on the income statement for thecurrent year was $245,000. Depreciation was $40,000. Accountreceivable and inventories decreased by $12,000 and $35,000,respectively. Prepaid expenses and accounts payable increased,respectively, by $1,000 and $8,000. How much cash was provided byoperating activities?
5. In calculating cash flows from operating activities using theindirect method, a gain on the sale of equipment is
Ignored because it does not impact cash
Added to net income
Subtracted from net income
Not reported on the Statement of Cash Flows
6. The following data are availablefor ABC Corporation.
Sale ofland $225,000
Sale ofequipment $130,000
Issuance of commonstock 140,000
Purchase ofequipment 70,000
Payment of cashdividends 120,000
Net cash provided by investing activities is:
7. ABC Company issues $50,000 of common stock during the yearfor cash. How would this be reported on the statement of cashflows?
As an addition to financing activities
As an addition to planning activities
As an addition to investing activities
As a subtraction from operating activities
8. XYZ Store had net credit sales of $8,500,000 and cost ofgoods sold of $5,000,000 for the year. The Accounts Receivablebalances at the beginning and end of the year were $600,000 and$760,000, respectively. The accounts receivable turnover was
9. ABC Company reports net income of $50,000 for 2018. Theprofit margin for ABC Company is 5%. Calculate the net sales forABC Company
10. Turnbull Department Store had net credit sales of$18,000,000 and cost of goods sold of $15,000,000 for the year. Theaverage inventory for the year amounted to $2,500,000. The averagenumber of days that it took to convert inventory into cash for ABCwas
11. Each of the following is included in computing the acid-testratio EXCEPT
Net accounts receivable
Cash
Inventory
Short-term investments
12. ABC Corporation had net income of $240,000. The weightedaverage number of shares outstanding in 2017 was 60,000 shares. AleCorporation's common stock is selling for $76 per share on the NewYork Stock Exchange. ABC Corporation's price-earnings ratio is
13. ABC Company reports Sales revenue of the following amountsfor 2016, 2017 and 2018:
2016: $125,000
2017: $210,000
2018: $215,000
Calculate the percentage change in sales revenue from 2016 to2018
14. Horizontal analysis is also called:
Linear anlysis
Common sizing
Trend analysis
Vertical analysis
15. XYZ Company reports cost of goods sold of $80,000 in 2018and of $60,000 in 2017. Calculate the % change in cost of goodssold from 2017 to 2018.
16. ABC, Inc. has the following income statement (inmillions):
ABC,INC.
IncomeStatement
Forthe Year Ended December 31, 2017
NetSales $300
Cost of GoodsSold 180
GrossProfit 120
OperatingExpenses 45
NetIncome $75
Using vertical analysis, what percentage is assigned to NetIncome?
17. Vertical analysis is also called:
Ratio anlysis
Common sizing
Trend analysis
Horizontal analysis
18. Swiss Clothing Store had a balance in the AccountsReceivable account of $920,000 at the beginning of the year and abalance of $980,000 at the end of the year. Net credit sales duringthe year amounted to $6,650,000. The average collection period ofthe receivables in terms of days was
1. Which of the following would NOT be considered a significantnon cash transaction?
Issuing debt to purchase plant assets
Exchanging plant assets
Paying stock dividends
All of the above are significant non cash transactions
2. During 2018, ABC Company reports the following activities
1. Net Income was recorded in the amount of $75,000
2. Depreciation expense was $10,000
3. Repaid a loan of $10,000 cash
4. Issued stock in exchange for $30,000
5. Sold equipment which had a book value of $20,000 for $17,000(recognizing a $3,000 loss).
6. Accounts Receivable decreased by $5,000
7. Accounts Payable decreased by $2,000
Calculate the cash provided by operating activities given theabove information.
3. ABC Company reports cash flows from operating activities of$30,000. In addition, ABC Company pays dividends of $5,000 and doesnot purchase any fixed assets during the year. Interest expense forthe year was $7,000. Calculate free cash flows for ABC Company.
4. The net income reported on the income statement for thecurrent year was $245,000. Depreciation was $40,000. Accountreceivable and inventories decreased by $12,000 and $35,000,respectively. Prepaid expenses and accounts payable increased,respectively, by $1,000 and $8,000. How much cash was provided byoperating activities?
5. In calculating cash flows from operating activities using theindirect method, a gain on the sale of equipment is
Ignored because it does not impact cash
Added to net income
Subtracted from net income
Not reported on the Statement of Cash Flows
6. The following data are availablefor ABC Corporation.
Sale ofland $225,000
Sale ofequipment $130,000
Issuance of commonstock 140,000
Purchase ofequipment 70,000
Payment of cashdividends 120,000
Net cash provided by investing activities is:
7. ABC Company issues $50,000 of common stock during the yearfor cash. How would this be reported on the statement of cashflows?
As an addition to financing activities
As an addition to planning activities
As an addition to investing activities
As a subtraction from operating activities
8. XYZ Store had net credit sales of $8,500,000 and cost ofgoods sold of $5,000,000 for the year. The Accounts Receivablebalances at the beginning and end of the year were $600,000 and$760,000, respectively. The accounts receivable turnover was
9. ABC Company reports net income of $50,000 for 2018. Theprofit margin for ABC Company is 5%. Calculate the net sales forABC Company
10. Turnbull Department Store had net credit sales of$18,000,000 and cost of goods sold of $15,000,000 for the year. Theaverage inventory for the year amounted to $2,500,000. The averagenumber of days that it took to convert inventory into cash for ABCwas
11. Each of the following is included in computing the acid-testratio EXCEPT
Net accounts receivable
Cash
Inventory
Short-term investments
12. ABC Corporation had net income of $240,000. The weightedaverage number of shares outstanding in 2017 was 60,000 shares. AleCorporation's common stock is selling for $76 per share on the NewYork Stock Exchange. ABC Corporation's price-earnings ratio is
13. ABC Company reports Sales revenue of the following amountsfor 2016, 2017 and 2018:
2016: $125,000
2017: $210,000
2018: $215,000
Calculate the percentage change in sales revenue from 2016 to2018
14. Horizontal analysis is also called:
Linear anlysis
Common sizing
Trend analysis
Vertical analysis
15. XYZ Company reports cost of goods sold of $80,000 in 2018and of $60,000 in 2017. Calculate the % change in cost of goodssold from 2017 to 2018.
16. ABC, Inc. has the following income statement (inmillions):
ABC,INC.
IncomeStatement
Forthe Year Ended December 31, 2017
NetSales $300
Cost of GoodsSold 180
GrossProfit 120
OperatingExpenses 45
NetIncome $75
Using vertical analysis, what percentage is assigned to NetIncome?
17. Vertical analysis is also called:
Ratio anlysis
Common sizing
Trend analysis
Horizontal analysis
18. Swiss Clothing Store had a balance in the AccountsReceivable account of $920,000 at the beginning of the year and abalance of $980,000 at the end of the year. Net credit sales duringthe year amounted to $6,650,000. The average collection period ofthe receivables in terms of days was
Related questions
Prepare a statement of cash flows, using the indirect method,with the information which follows:
ABC Company reports the following comparative balance sheet:
| ABC Company | ||
| Balance Sheet | ||
| Dec 2018/2017 | ||
| Assets | 2017 | 2018 |
| Cash | 37,000 | 54,000 |
| Accounts Receivable | 26,000 | 68,000 |
| Inventory | - | 54,000 |
| Prepaid expenses | 6,000 | 4,000 |
| Land | 70,000 | 45,000 |
| Buildings | 200,000 | 200,000 |
| Accumulated Depreciation - buildings | (11,000) | (21,000) |
| equipment | 68,000 | 193,000 |
| Accumulated Depreciation - equipment | (10,000) | (28,000) |
| total assets | 386,000 | 569,000 |
In addition, ABC Company reports the following income statementitems:
SalesRevenue $890,000
COGS $465,000
Operating Expenses 221,000
Interest Expense 12,000
Loss on disposal of equip2,000 $700,000
Income Beforetaxes $190,000
Income TaxExpense $65,000
NetIncome $125,000
You are also given the following information:
Operating expenses include depreciation expense of $33,000
Land was sold at its book value ($25,000) for cash
Cash dividends of $55,000 were paid in 2018
Interest expense of $12,000 was paid in cash
Equipment with a cost of $166,000 was purchased for cash.Equipment with a cost of $41,000 and a book value of $36,000 wassold for $34,000 cash.
Bonds of $10,000 were redeemed at their face value for cash.Bonds of $30,000 were converted into common stock.
Common stock of $130,000 was issued for cash.
Prepare the statement of cash flows for ABC Company using theindirect method.
Calculate the free cash flows for ABC Company given the aboveinformation.
