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According to the Statement of Cash Flows, a decrease in accounts receivable will _____ the cash flow from _____ activities.
Correct answer(s):
- increase; operating
Which one of the following is a source of cash?
Correct answer(s):
- decrease in inventory
Which one of the following is a source of cash?
Correct answer(s):
- acquisition of debt
Which one of the following is a use of cash?
Correct answer(s):
- decrease in common stock
Which one of the following is a source of cash?
Correct answer(s):
- increase in accounts payable
The U.S. government coding system that classifies a firm by the nature of its business operations is known as the:
Correct answer(s):
- Standard Industrial Classification code.
The formula which breaks down the return on equity into three component parts is referred to as which one of the following?
Correct answer(s):
- Du Point identity
Relationships determined from a firm’s financial information and used for comparison purposes are known as:
Correct answer(s):
- financial ratios.
Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a common point in time?
Correct answer(s):
- common-base year statement
A common-size income statement is an accounting statement that expresses all of a firm’s expenses as percentage of:
Correct answer(s):
- sales.
The sources and uses of cash over a stated period of time are reflected on the:
Correct answer(s):
- statement of cash flows.
Activities of a firm which require the spending of cash are known as:
Correct answer(s):
- uses of cash.
During 2009, RIT Corp. had sales of $565,600. Costs of goods sold, administrative and selling expenses, and depreciation expenses were $476,000, $58,800, and $58,800, respectively. In addition, the company had an interest expense of $112,000 and a tax rate of 32 percent. What is the operating cash flow for 2009? Ignore any tax loss carry-back or carry-forward provisions.
Correct answer(s):
- $30,800
Dee Dee’s Marina is obligated to pay its creditors $6,400 today. The firm’s assets have a current market value of $5,900. What is the current market value of the shareholders’ equity?
Correct answer(s):
- $0
Suppose you are given the following information for Bayside Bakery: sales = $30,000; costs = $15,000; addition to retained earnings = $4,221; dividends paid = $469; interest expense = $1,300; tax rate = 30 percent. What is the amount of the depreciation expense?
Correct answer(s):
- $7,000
The 2008 balance sheet of The Sports Store showed $800,000 in the common stock account and $6.7 million in the additional paid-in surplus account. The 2009 balance sheet showed $872,000 and $8 million in the same two accounts, respectively. The company paid out $600,000 in cash dividends during 2009. What is the cash flow to stockholders for 2009?
Correct answer(s):
- -$772,000
The 2008 balance sheet of The Beach Shoppe showed long-term debt of $2.1 million, and the 2009 balance sheet showed long-term debt of $2.3 million. The 2009 income statement showed an interest expense of $250,000. What was the cash flow to creditors for 2009?
Correct answer(s):
- $50,000
The 2008 balance sheet of Global Tours showed current assets of $1,360 and current liabilities of $940. The 2009 balance sheet showed current assets of $1,640 and current liabilities of $1,140. What was the change in net working capital for 2009?
Correct answer(s):
- $80
The Blue Bonnet’s 2008 balance sheet showed net fixed assets of $2.2 million, and the 2009 balance sheet showed net fixed assets of $2.6 million. The company’s income statement showed a depreciation expense of $900,000. What was the amount of the net capital spending for 2009?
Correct answer(s):
- $1,300,000
Webster World has sales of $12,900, costs of $5,800, depreciation expense of $1,100, and interest expense of $700. What is the operating cash flow if the tax rate is 32 percent?
Correct answer(s):
- $5,404