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Posted On: 2018-02-14 06:06:18
 
Question
Week8 Final Exam Part 1 and Part 2
 
Question 1 (TCO A) An advantage of the corporate form of business is _____. (Points : 5)
it is simple to establish
the corporate tax rate is less than the personal tax rate
corporations must pay dividends
the shareholders are not responsible for the corporation’s debts
 

Question 2  (TCO A) Which one of the following statements is correct with regard to Dividends? (Points : 5)
Dividends are increased by credits.
Dividends are subtracted on the Income Statement.
Common stock dividends are required to be paid.
Dividends reduce stockholders’ equity.
 

Question 3 (TCOs A, B) Below is a partial list of account balances for LBJ Company:
Cash $12,000
Prepaid insurance 1,300
Accounts receivable 7,000
Accounts payable 5,000
Notes payable 9,000
Common stock 22,000
Dividends 2,000
Revenues 45,000
Expenses 35,000
What did LBJ Company show as total debits? (Points : 5)
$57,300
$81,000
$55,300
$56,000
 

Question 4 (TCOs B, E) Which of the following statements is incorrect with regard to accrual accounting? (Points : 5)
Accrual accounting is consistent with the matching principle.
Accrual accounting does not record expenses until they are paid.
Accrual accounting is more complex than cash basis accounting.
Accrual accounting is required by GAAP.
 

Question 5 (TCO D) Three different companies each utilize a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5)
FIFO will have the highest ending inventory
FIFO will have the highest cost of goods sold
LIFO will have the lowest cost of goods sold
LIFO will have the highest ending inventory
 

Question 6 (TCOs A, E) Equipment was purchased for $85,000. Freight charges amounted to $2,550 and there was a cost of $10,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $5,000 salvage value at the end of its 6-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5)
$13,333
$16,258
$15,425
$13,578
 
Question 7 (TCOs D, G) When the market rate of interest is equal to the stated rate of interest on the bond, the bond will require _____. (Points : 5)
a debit to Discount on Bonds Payable
a credit to Discount on Bonds Payable
a credit to Bonds Payable
a debit to Bonds Payable

Question 8 (TCO C) Accounts receivable arising from sales to customers amounted to $50,000 and $45,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $150,000. Based on these transactions, the cash flows from operating activities to be reported on the statement of cash flows would be _____. (Points : 5)
$195,000
$145,000
$115,000
$155,000
 

Question 9 (TCO F) Which one of the following tools uses the percentage change formula to make year-over-year comparisons of sales growth? (Points : 5)
Horizontal analysis
Common-size analysis
Vertical analysis
Ratio analysis

Question 10 (TCO F) When performing a common-size Income Statement, the 100% figure is _____. (Points : 5)
net sales
total liabilities plus stockholders’ equity
net income
total assets

Question 11 (TCO F) Ratios are most useful in expressing _____. (Points : 5)
cause-and-effect relationships
the relationships between numbers
the delta between numbers
the root cause of the problem

Question 12 (TCO F) Creditors are usually most concerned with analyzing _____. (Points : 5)
the company stock price
turnover
liquidity
profitability

Question 13 (TCO F) Shareholders are usually most interested in evaluating _____. (Points : 5)
profitability
leverage
turnover
the ability to pay debts as they come due

Question 14 (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5)
multiply the stated rate times the bond’s face value
calculate the present value of the principal only
calculate the present value of both the principal and the interest
calculate the present value of the interest only
 
 
Page 2
Question 1. 1. (TCO A) Below you will find selected information (in millions) from Coca-Cola Co.’s 2012 Annual Report:
Income Taxes Payable
$471
Short-term Investments and Marketable Securities
8,109
Cash
8,442
Other non-current Liabilities
10,449
Common Stock
1,760
Receivables
4,812
Other Current Asset
2,973
Long-term Investments
10,448
Other Non-current Assets
3,585
Property, Plant and Equipment
23,486
Trademarks
6,527
Other Intangible Assets
20,810
Allowance for Doubtful Accounts
53
Accumulated Depreciation
9,010
Accounts Payable
8,680
Short Term Notes Payable
17,874
Prepaid Expenses
2,781
Other Current Liabilities
796
Long-Term Liabilities
14,736
Paid-in-Capital in Excess of Par Value
11,379
Retained Earnings
55,038
Inventories
3,264
Treasury Stock
35,009
Other information taken from the Annual Report:
Sales Revenue for 2012
$48,017
Cost of Goods Sold for 2012
19,053
Net Income for 2012
9,019
Inventory Balance on 12/31/11
3,092
Net Accounts Receivable Balance on 12/31/11
4,920
Total Assets on 12/31/11
79,974
Equity Balance on 12/31/11
31,921
 
Required:
1. Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also separate the current liabilities from the non-current liabilities and provide a total for each.
2. Using the Balance Sheet from your answer above, calculate the Current Ratioand Return on common stockholders’ equity ratio. (Make sure to show all your work).  (Points : 36)
 
Question 2  (TCO B) The following selected data was retrieved from the Walmart, Inc. financial statements for the year ending January 31, 2013:
Accounts Payable
$38,080
Accounts Receivable
6,768
Cash
7,781
Common Stock
3,952
Cost of Goods Sold
352,488
Income Tax Expense
7,981
Interest Expenses
2,064
Membership Revenues
3,048
Net Sales
466,114
Operating, Selling and Administrative Expenses
88,873
Retained Earnings
72,978
 
Required:
Using the information provided above:
1. Prepare a multiple-step income statement
2. Calculate the Profit Margin, and Gross profit rate for the company. Be sure to provide the formula you are using, show your calculations, and discuss your findings/results.  (Points : 36)
 
Question 3 (TCO C) Please review the following real-world Hewlett Packard Statement of Cash flows and address the two questions below:
Cash flow from operating activities
In millions
In millions
 
For the year ended 2012
For the year ended 2011
Net (loss) earnings
$(12,650)
$7,074
Depreciation and amortization
5,095
4,984
Impairment of goodwill and purchased intangible assets
18,035
885
Stock-based compensation expense
635
685
Provision for doubtful accounts
142
81
Provision for inventory
277
217
Restructuring charges
2,266
645
Deferred taxes on earnings
(711)
166
Excess tax benefit from stock-based competition
(12)
(163)
Other, net
265
(46)
Accounts and financing receivables
1,269
(227)
Inventory
890
(1,252)
Accounts payable
(1,414)
275
Taxes on earnings
(320)
610

Solutions
File name: Week8 Final Exam part1 and part2.doc Fi
Price $50
Attachment 1: Week8 Final Exam part1 and part2.doc
Solution Posted By: Homeworkhelp    Posted on: 14-02-2018