Exam 3

Front

If you were to perform a vertical analysis of the income statement, you would divide each line item by:

Back

Sales

Front

Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows? Inventory increase, Gain on the sale of land, Accounts receivable increase, Salaries payable increase

Back

Salaries payable increase

Front

Which bond(s) will be issued at a discount? Options: Bond 3, Bonds 3 and 4, Bond 1, Bond 4

Back

Bonds 3 and 4

Front

What is the entry when the board of directors of DEF Co. declared a $0.6 per share cash dividend on its $1 par common stock, with 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock?

Back

Option A

Front

A company issues a $200,000, 6%, six-year note on January 1, 2024. If the monthly payment is $3,220.99, how much of the note’s carrying value will be decreased after the first month’s payment is made on January 31, 2024?

Back

2220.99

Front

Assume net income was $210,000, depreciation expense was $6300, accounts receivable increased by $8500, and accounts payable decreased by $2800. The amount of net cash flows from operating activities is:

Back

205000

Front

What is the receivables turnover ratio for 2024? (Round your answer to one decimal place.)

Back

5.7

Answer explanation

420000 / (82000+66000)*1/2

Front

What is the return on assets for 2024? (Round your answer to one decimal place.)

Back

9.9%

Answer explanation

79000 / (830000+765000)*1/2

Front

What is the profit margin for 2024? (Round your answer to one decimal place.)

Back

18.8%

Answer explanation

79000 / 420000

Front

What is the annual market interest rate on the callable bonds issued by Shaun White Adventure Company (SWAC) on January 1, 2024? Options: 6%, 12%, 7%, 14%

Back

12%

Answer explanation

21108 / (351806*1/2)