Reference no: EM13214869

Accounts receivable arising from sales to customers amounted to $40,000 and $55,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $180,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

$220,000.

$165,000.

$180,000.

$195,000.

Bush Company reported net income of $60,000 for the year. During the year, accounts receivable decreased by $8,000, accounts payable increased by $4,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is

$77,000.

$59,000.

$55,000.

$48,000.

Adama Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable increased $15,000, merchandise inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities

provided net cash of $21,000.

used net cash of $17,000.

used net cash of $29,000.

provided net cash of $24,000.

The net income reported on the income statement for the current year was $220,000.
Depreciation recorded on plant assets was $35,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $2,000 and $12,000 respectively. How much cash was provided by operating activities?

$235,000

$220,000

$200,000

$255,000

The net income reported on the income statement for the current year was $245,000.
Depreciation was $40,000. Account receivable 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 by operating activities?

$339,000

$323,000

$311,000

$296,000

If a gain of $12,000 is incurred in selling (for cash) office equipment having a book value of $110,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

$110,000.

$12,000.

$98,000.

$122,000.

If a loss of $25,000 is incurred in selling (for cash) office equipment having a book value of $90,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

$115,000.

$25,000.

$65,000.

$90,000.

Wilson Company reported net income of $105,000 for the year ended December 31, 2014. During the year, inventories decreased by $15,000, accounts payable decreased by $20,000, depreciation expense was $18,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2014 using the indirect method was

$109,000.

$118,000.

$101,000.

$120,000.

The third (final) step in preparing the statement of cash flows is tolist the noncash activities.  analyze changes in noncurrent asset and liability accounts. determine net cash provided by operating activities. compare the net change in cash with the change in the cash account reported on the balance sheet.
Which one of the following items is not necessary in preparing a statement of cash flows?

Determine the change in cash

Determine the cash provided by operations

Determine the cash in all bank accounts

Determine cash from financing and investing activities

Lake Company reported the following on its income statement:

Income before income taxes $600,000
Income tax expense
Net income $450,000

An analysis of the income statement revealed that interest expense was $60,000. Lake Company's times interest earned was

7.5 times.

10 times.

8.5 times.

11 times.

The debt to assets ratio measures

the percentage of the total assets provided by creditors.

whether interest can be paid on debt in the current year.

the proportion of interest paid relative to dividends paid.

the company's profitability.

Trading on the equity (leverage) refers to the

amount of working capital.

amount of capital provided by owners.

use of borrowed money to increase the return to owners.

number of times interest is earned.

The current assets of Myers Company are $250,000. The current liabilities are $100,000. The current ratio expressed as a proportion is

2.5 : 1

250%.

.25 : 1

$250,000 ÷ $100,000.

The current ratio may also be referred to as the

acid-test ratio.

contemporary ratio.

working capital ratio.

short run ratio.

A weakness of the current ratio is

that it is rarely used by sophisticated analysts.

that it can be expressed as a percentage, as a rate, or as a proportion.

the difficulty of the calculation.

that it doesn't take into account the composition of the current assets.

A supplier to a company would be most interested in the company's

profit margin.

current ratio.

earnings per share.

asset turnover.

Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

Asset turnover

Accounts receivable

Current ratio

Acid-test ratio

Ratios are used as tools in financial analysisbecause they may provide information that is not apparent from inspection of the
individual components of the ratio. instead of horizontal and vertical analyses.

because they are prescribed by GAAP.

because even single ratios by themselves are quite meaningful.

The ratios that are used to determine a company's short-term debt paying ability are

times interest earned, acid-test ratio, current ratio, and inventory turnover.

times interest earned, inventory turnover, current ratio, and accounts receivable turnover.

current ratio, acid-test ratio, accounts receivable turnover, and inventory turnover.

asset turnover, times interest earned, current ratio, and accounts receivable turnover.

Which of the following are period costs?

Direct labor and manufacturing overhead.

Selling expenses.

Direct materials and direct labor.

Raw materials.

Sales commissions are classified as

period costs.

indirect labor.

overhead costs.

product costs.

Product costs consist of

period costs.

direct materials and direct labor only.

direct materials, direct labor, and manufacturing overhead.

selling and administrative expenses.

Which one of the following represents a period cost?

Labor costs associated with quality control.

Fringe benefits associated with factory workers.

The VP of Sales' salary and benefits.

Overhead allocated to the manufacturing operations.

 

Product costs are also called capitalizable costs.

direct costs.

inventoriable costs.

overhead costs.

For inventoriable costs to become expenses under the expense recognition principle,

the product must be expensed based on its percentage-of-completion.

the product to which they attach must be sold.

all accounts payable must be settled.

the product must be finished and in stock.

As inventoriable costs expire, they become

sales revenue.

cost of goods sold.

selling expenses.

gross profit.

A manufacturing company calculates cost of goods sold as follows:

Beginning FG inventory + cost of goods purchased - ending FG inventory.

Ending FG inventory - cost of goods manufactured + beginning FG inventory.

Beginning FG inventory + cost of goods manufactured - ending FG inventory.

Beginning FG inventory - cost of goods manufactured - ending FG inventory.

A manufacturing company reports cost of goods manufactured as a(n)

component of the raw materials inventory on the balance sheet.

administrative expense on the income statement.

current asset on the balance sheet.

component in the calculation of cost of goods sold on the income statement.

The subtotal, "Cost of goods manufactured" appears on

a merchandising company's income statement.

both a manufacturing and a merchandising company's income statement.

a manufacturing company's income statement.

neither a merchandising nor a manufacturing company's income statement.

Cost of raw materials is debited to Raw Materials Inventory when the

materials are ordered.

materials are put into production.

materials are received.

bill for the materials is paid.

Which of the following is not included in factory labor costs?

Net earnings.

Employer payroll taxes.

Gross earnings.

Fringe benefits.

All of the following would be entries in assigning accumulated costs to the Work In Process
Inventory except

raw materials are used.

the purchase of raw materials.

overhead is applied.

factory labor is used.

Factory labor costs

are accumulated in a control account.

are based on workers' net pay.

do not include pension costs.

include vacation pay.

Factory Labor is a(n)

subsidiary account.

manufacturing cost clearing account.

expense account.

control account.

Lincoln Manufacturing has the following labor costs:

Factory-Gross wages $450,000
Factory-Net wages 420,000
Employer Payroll Taxes
Payable 40,000

The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

$490,000.

$420,000.

$450,000.

$460,000.

The entry to record the acquisition of raw materials on account is

Work in Process Inventory
Accounts Payable
Manufacturing Overhead
Raw Materials Inventory Accounts Payable
Accounts Payable
Raw Materials Inventory
Raw Materials Inventory
Accounts Payable

The following information is available for completed Job No. 404: Direct materials, $60,000; direct labor, $90,000; manufacturing overhead applied, $120,000; units produced, 6,000 units; units sold, 5,000 units. The cost of the finished goods on hand from this job is

$225,000.

$45,000.

$270,000.

$54,000.

Athletics, Inc. completed Job No. C04 during 2014. The job cost sheet listed the following:
Direct materials $55,000
Direct labor $30,000
Manufacturing overhead applied $27,000
Units produced 4,000 units
Units sold 1,500 units
How much is the cost of the finished goods on hand from this job?

$70,000

$42,000

$112,000

$112,000

Alpine Inc. uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2014 totaled $20,000 of materials, $8,000 of direct labor costs, and $8,000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $9,000, and the ending balance is $15,000. During the year, the company completed 20 machines. How much is the cost per machine?

$1,760

$1,500

$1,880

$1,320