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Worksheetsus cma sec A qUIZ
Total questions: 28
Worksheet time: 39mins
FURNITURE A/C: IN 2020- $ 500,000 AND IN 2021- $ 450,000. THIS MEANS:
PURCHASE OF FURNITURE $ 50,000
SALE OF FURNITURE $ 50,000
DEPRECIATION $ 50,000
NONE OF THE ABOVE
DURING THE YEAR HELD TO MATURITY SECURITIES WORTH $ 500,000 WERE SOLD AT A LOSS OF $ 40,000. IN STATEMENT OF CASH FLOWS:
CASH INFLOW FROM FINANCING ACTIVITY $ 5,40,000
CASH INFLOW FROM FINANCING ACTIVITY $ 4,60,000
CASH INFLOW FROM INVESTING ACTIVITY $ 5,40,000
CASH INFLOW FROM INVESTING ACTIVITY $ 4,60,000
ALL OF THE FOLLOWING ARE ELEMENTS OF THE INCOME STATEMENT EXCEPT
Expense
Gains & Losses
Shareholders Equity
Revenue
THE FINANCIAL STATEMENT THAT PROVIDES A SUMMARY OF THE FIRM’S OPERATIONS FOR A PERIOD OF TIME IS THE:
Income Statement
Statement of Financial position
Statement of Shareholder’s Equity
Statement of Retained Earnings
THE FINANCIAL STATEMENTS INCLUDED IN THE ANNUAL REPORT TO THE SHAREHOLDERS ARE LEAST USEFUL TO WHICH ONE OF THE FOLLOWING
Stockbrokers
Bankers preparing to lend money
Competing Business
Managers in charge of Operating Activities
The following information is available from Sand Corp.’s accounting records for the year ended December 31, 2021:
Cash received from customers $870,000 Rent received 10,000 Cash paid to suppliers and employees 510,000 Taxes paid 110,000 Cash dividends paid 30,000
Net cash flow provided by operations for 2021 was
$250,000.
$220,000.
$260,000.
$230,000.
All of the following should be classified as investing activities in the statement of cash flows except
cash outflows to purchase manufacturing equipment.
cash inflows from the sale of bonds of other entities
cash outflows to creditors for interest.
cash inflows from the sale of a manufacturing plant.
In preparing its cash flow statement for the year ended December 31, 2021 Reve Co. collected the following data:
Gain on sale of equipment $(6,000) Proceeds from sale of equipment 10,000 Purchase of A.S., Inc. bonds (par value $200,000) $ 180,000 Amortization of bond discount 2,000 Dividends declared(45,000) Dividends paid (38,000) Proceeds from sale of treasury stock (carrying amt $65,000) 75,000
In its December 31, 2021, statement of cash flows, what amount should Reve report as net cash used in investing activities?
$170,000
$176,000
$188,000
$194,000
Three years ago, James Company purchased stock in Zebra Inc. at a cost of $100,000. This stock was sold for $150,000 during the current fiscal year. The result of this transaction should be shown in the Investing Activities Section of James’ Statement of Cash Flows as
Zero
$50,000.
$100,000.
$150,000
In the statement of cash flows, the payment of common share dividends appears in the _____ activities section as a _____ of cash.
Operating, Inflow
Financing, Outflow
Investing, Outflow
Investing, Inflow
In a statement of cash flows (indirect method), depreciation expense should be presented as:
an inflow of cash.
an outflow of cash.
an addition to net income in converting net income to net cash flows from operating activities.
a deduction from net income in converting net income to net cash flows from operating activities.
Consider the following financial data for a company that is preparing its cash flow statement.Amortization expense = $150,000Cash dividends paid to common shareholders = $75,000Net income = $1,500,000Work-in-process inventory increase over the prior year = $300,000Gain on sale of equipment = $50,000Using the indirect method, cash flow from operating activities would be
$1,225,000.
$1,300,000.
$1,350,000
$1,375,000
Which of the following transactions is included in the operating activities section of a cash flow statement prepared using the indirect method?
Gain on sale of plant asset.
Sale of property, plant, and equipment.
Payment of cash dividend to the shareholders.
Issuance of common stock to the shareholders.
Which of the following items is included in the financing activities section of the statement of cash flows?
Cash effects of transactions involving making and collecting loans.
Cash effects of acquiring and disposing of investments and property, plant, and equipment.
Cash effects of transactions obtaining resources from owners and providing them with a return on their investment.
Cash effects of transactions that enter into the determination of net income.
Dividends paid to company shareholders would be shown on the statement of cash flows as:
Operating cash inflows.
Operating cash outflows.
Cash flows from investing activities.
Cash flows from financing activities.
The net income for Cypress Inc. was $3,000,000 for the year ended December 31. Additional information is as follows:
Depreciation on fixed assets$1,500,000Gain from cash sale of land200,000Increase in accounts payable300,000Dividends paid on preferred stock400,000
The net cash provided by operating activities in the statement of cash flows for the year ended December 31 should be
$4,200,000
$4,500,000
$4,600,000
$4,800,000
An item of inventory purchased for $25 had been incorrectly written down at the end of last year to a current replacement cost of $17. The item is currently selling for $50, its normal selling price. The error will affect the financial statements in which one of the following ways?
The income for last year is overstated.
The cost of sales for this year will be overstated.
The income for this year will be overstated
The income for this year will be unaffected.
Which of the following statements about the valuation of inventory are correct, based on U.S. GAAP?
I. Inventories are normally valued at the higher of cost and net realizable value.
II. LIFO (Last-in, first-out) can be used to value inventory under U.S. GAAP.
III. The net realizable value may be used as the inventory value.
I and II only
II and III only
I and III only
I, II and III
On December 1, a company had 1,000 units in inventory valued at $787,500. On December 12, the company purchased 2,000 units for $1,562,400. Sales of 2,400 units were made on December 23, and on December 30, the company purchased another 2,000 units for $1,537,200. If the company uses a periodic system and the weighted-average inventory valuation method, the company’s December 31 balance sheet would report inventory of
$2,025,660.
$2,021,292.
$2,014,740.
$2,007,180.
The inventory method that will yield the same inventory value and cost of goods sold whether a perpetual or periodic system is used is:
average cost
first in first out
last in first out
either first-in, first-out or last-in, first-out
Maple Industries purchased a lathe on June 1, Year 1, the beginning of the fiscal year. The lathe cost $43,200 and has an estimated salvage value of $3,600 and an estimated useful life of 8 years. The lathe has been used throughout the year.
Assuming that Maple Industries recognizes one-half year's depreciation on all assets purchased or sold during the year, the amount of straight-line depreciation that would be taken for financial reporting purposes in the fiscal year ending May 31, Year 2 would be
$2,475
$2,700
$4,950
$5,400
When Pyne Co. decided to go into the business of delivering pizzas at lunch time to a nearby office complex, the company acquired a delivery truck at the cost of $20,000. The truck had an estimated useful life of 5 years and a $2,000 salvage value. The company also acquired a used car for deliveries at a cost of $4,800, with an estimated useful life of 3 years and a $600 salvage value.
The depreciation on Pyne's delivery truck for year two using the double-declining-balance (DDB) method would be
$4,320
$4,800
$6,000
$7,200
When Pyne Co. decided to go into the business of delivering pizzas at lunch time to a nearby office complex, the company acquired a delivery truck at the cost of $20,000. The truck had an estimated useful life of 5 years and a $2,000 salvage value. The company also acquired a used car for deliveries at a cost of $4,800, with an estimated useful life of 3 years and a $600 salvage value.
The depreciation on Pyne's used delivery car for year three using the sum-of-the-years'-digits (SYD) method would be
$700
$800
$1,400
$1,600
Blake Ltd. has determined that an impairment exists on one of its machines, but the company expects to continue using the asset for another three full years as no active market exists for the machine. Selected information on the impaired asset (on the date that impairment was determined to exist) is provided below.
Original cost of machine £22,000
Book (carrying) value of the machine 20,000
Value in use (present value of future cash flows) 15,000
Net selling price 12,000
According to IFRS, what is the amount of the impairment loss to be recorded by Blake?
£3,000.
£5,000.
£7,000.
£8,000.
DEF is the consignee for 1,000 units of product X for ABC Company. ABC should recognize the revenue from these 1,000 units when
The agreement between DEF and ABC is signed.
ABC ships the goods to DEF.
DEF receives the goods from ABC.
DEF sells the goods and informs ABC of the sale.
The practice of recording consideration received from a customer before the performance obligation in the contract has been satisfied as a contract liability is an example of applying the
Going-concern assumption.
Monetary-unit assumption.
Historic cost principle.
Revenue recognition principle.
Temporary and permanent differences between taxable income and pre-tax financial income differ in that:
Temporary differences do not give rise to future taxable or deductible amounts.
Only permanent differences have deferred tax consequences.
Only temporary differences have deferred tax consequences.
Temporary differences include items that enter into pre-tax financial income but never into taxable income.
Which of the following is not a criterion for classifying and accounting for a lease agreement as a finance lease?
The underlying asset is expected to have an alternative use to the lessor at the end of the lease term.
The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or is greater than substantially all of the fair value of the underlying asset.
The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.
The lease grants the lessee an option to purchase the underlying asset and the lessee is reasonably certain to exercise the option.
