DOC PREVIEW
GSU ACCT 2101 - Final exam review 2015problems key

This preview shows page 1-2-22-23 out of 23 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 23 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 23 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 23 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 23 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 23 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

2102 Review for Final Exam 1. Accounts Receivable beginning is $40,000 and ending is $60,000. What is the adjustment to Net Income to get to Operating Cash Flow?a. $20,000 addition to Net Incomeb. $40,000 addition to Net Incomec. $20,000 subtraction to Net Incomed. $40,000 subtraction to Net IncomeBillings are in Net Income. Collections are in Operating Cash Flow. The adjustment changes billings (in Net Income) to collections (in Operating Cash Flow).Billings must have been bigger than collections to make AR grow. Bigger by how much? $20,000 (increase in AR). Billings is bigger so must be REDUCED to get to amount in operating cash flow. C12. Wages Payable was $20,000 lower at the end of the month than the beginning of the month. What is the adjustment to net income in the Cash Flow Statement?a. $20,000 addition to Net Incomeb. $40,000 addition to Net Incomec. $20,000 subtraction to Net Incomed. $40,000 subtraction to Net IncomeExpenses reduce Net Income. Payments reduce Operating Cash Flow. The reconciliation goes from NI to OCF. Which is bigger, expense or payment? Payables only go down with PAYMENTS. So, payments are bigger. The reduction to OCF is bigger than the reduction in NI. So you subtract. CSo how do you go from (257,000) to (277,000)? You have to subtract $20,000.23. Prepaid Rent rose by $10,000 during the period. What is the adjustment to Net Income in the indirect method on the Cash Flow Statement?a. $10,000 addition to Net Incomeb. $20,000 addition to Net Incomec. $10,000 subtraction to Net Incomed. $20,000 subtraction to Net IncomeOnly way to get prepaid to grow is to pay more than expired (charged to rent expense). So, subtractions from NI were smaller than subtractions from OCF. Needto subtract increase in Prepaid. C34. Inventory went up by $45,000 this period. Payments to vendors for inventory were $350,000 this period. What is theadjustment to Net Income in the indirect method on the Cash Flow Statement?a. $45,000 addition to Net Incomeb. $90,000 addition to Net Incomec. $45,000 subtraction to Net Incomed. $90,000 subtraction to Net IncomeCOGS reduces NI by $305,000 - see question 4.Payments reduce OCF by $350,000.So you have a negative $305,000 in NI but a negative $350,000 in OCF.How can you go from (305,000) to (350,000)? Subtract $45,000. C45. Which of these is true about total current assets?a. presented in reverse order of liquidityb. cash or expected to be cash within a yearc. always greater than current liabilitiesd. included in the computation of quick ratioB56. What is the statement of shareholder’s equity?a. extra balance sheetb. extra income statementc. report of comprehensive incomed. summary of changes in equityD67. A company has a $260,000 loss on discontinued operations and a tax rate of 30%. What is the change reflected in the discontinued item section of the Income Statement to reflect this item?a. reduction of $182,000b. increase of $182,000c. reduction of $338,000d. increase of $338,000260,000 x 70%, reduction because a loss A78. Trio Partners has three partners, Alfa, Bo and Cee. The partnership earned $30,000 this year. Their partnership agreement calls for Partner Bo to receive a salary allowance of $3,000 and then distribute the rest evenly to all partners. If partner Bo’s capital account was $12,000 before the income distribution, what is partner Bo’s new capital balance after income distribution?a. $15,000b. $24,000c. $21,000d. $25,00030,000 – 3,000 = 27,000 / 3 = 9,000 each. Bo starts with 12,000 + 3,000 + 9,000 = 24,000, B89.Roadmaster, Inc. has $2,000,000 in debt and $3,000,000 in stockholders' equity. If the debt carries an interest rate of 14%, and the stockholders are demanding a 15% rate of return, Roadmaster’s cost of capital is: A) 14.2% B) 14.5% C) 14.6% D) 15.0% 2,000,000/5,000,000 = 40% Debt 3,000,000/$5,000,000 = 60% Equity14% (.4) + 15% (.6) = 5.6 + 9 = 14.6% C910. Text Book Corp sells 200,000 common shares to the public on January 1, 2005. Test Book Corp then buys back 5,000 shares on October 1, 2005 to use for management bonuses. How many shares are issued/outstanding?a. 200,000 issued /195,000 outstandingb. 195,000 issued /195,000 outstandingc. 195,000 issued /200,000 outstandingd. 200,000 issued /200,000 outstandingA Treasury shares are issued but not outstanding10Waldo Inc.Data for 2102 Practice Exam2012 2011Accounts Payable $ 90,000 $ 70,000 Accounts Receivable, net $ 100,000 $ 90,000 Accum Deprec, equipment $ 35,000 $ 20,000 Additional paid in capital $ 30,000 $ 30,000 Cash $ 10,000 $ 20,000 Common stock, par $ 50,000 $ 50,000 Dividends Payable $ 12,000 $ - Equipment $ 90,000 $ 40,000 Insurance Payable $ 10,000 $ 5,000 Intangibles $ 80,000 $ 90,000 Inventories $ 90,000 $ 50,000 Marketable Securities $ 77,000 $ 67,000 Mortgage $ 80,000 $ 50,000 Paid in cap, treas stk $ 4,000 $ 4,000 Prepaid Rent $ 16,000 $ 6,000 Retained earnings $ 124,000 $ 110,000 ST Notes $ 20,000 $ 20,000 Taxes Payable $ 10,000 $ 6,000 Treasury stock $ 2,000 $ 2,000 Sales $ 800,000 $ 600,000 COGS $ 400,000 $ 300,000 Operating Expenses $ 232,000 $ 162,000 Interest Expense $ 24,000 $ 23,000 Gain on sale of intangible $ 2,000 Income tax expense $ 104,000 $ 89,000 Net Income $ 42,000 $ 26,000 11Waldo Inc. Worksheet(create 5 balance sheet sections, sort the accounts, check by balancing)Current Assets 2012 2011Cash $ 10,000 $ 20,000 Marketable Securities $ 77,000 $ 67,000 Accounts Receivable, net $ 100,000 $ 90,000 Inventories $ 90,000 $ 50,000 Prepaid Rent $ 16,000 $ 6,000 total current assets $ 293,000 $ 233,000 Long Term AssetsEquipment $ 90,000 $ 40,000 Accum Deprec, equipment $ (35,000) $ (20,000)Intangibles $ 80,000 $ 90,000 TOTAL ASSETS $ 428,000 $ 343,000 Current LiabilitiesAccounts Payable $ 90,000 $ 70,000 Dividends Payable $ 12,000 $ - Insurance Payable $ 10,000 $ 5,000 ST Notes $ 20,000 $ 20,000 Taxes Payable $ 10,000 $ 6,000 total current liab $ 142,000 $ 101,000 Long Term LiabilitiesMortgage $ 80,000 $ 50,000 EquityCommon stock, par $ 50,000 $ 50,000 Additional paid in capital $ 30,000 $ 30,000 Paid in cap, treas stk $ 4,000 $ 4,000


View Full Document

GSU ACCT 2101 - Final exam review 2015problems key

Download Final exam review 2015problems key
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Final exam review 2015problems key and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Final exam review 2015problems key 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?