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business
managerial accounting 12th
Managerial Accounting The Cornerstone Of Business Decision Making 9th Edition Maryanne Mowen, Don Hansen, Dan Heitger - Solutions
15-4 Fractions or percentages computed by dividing one account or line-item amount by another are calleda. returns.b. industry averages.c. common-size statements.d. dividend yields.e. ratios.
15-3 Referring to Exhibit 2.2, which of the four data analytic types does horizontal analysis represent?a. Prescriptiveb. Diagnosticc. Predictived. Numerice. Descriptive
15-2 An advantage of common-size analysis is thata. the size of dollar amounts impact the analysis.b. larger companies will have higher common-size percentages.c. it focuses only on vertical analysis.d. the effects of size are eliminated.e. it focuses only on horizontal analysis.
15-1 In examining Luke Company’s current-period income statement, you notice that research and development expenses are 62% of sales revenue. Luke has most likely provideda. a horizontal analysis.b. a vertical analysis using sales as the base.c. a horizontal analysis using sales as the base.d. a
Shera Company just completed its second year of operations. The comparative income statements for these years are as follows:20X1 20X2 Sales revenue $500,000 $800,000 Cost of goods sold 300,000 464,000 Gross margin $200,000 $336,000 Operating expenses 80,000 164,000 Interest expenses 20,000 20,000
How to compute the dividend yield and the dividend payout ratio?
How to compute the price-earnings ratio?
How to compute earnings per share?
How to calculate the average common stockholders’ equity and the return on stockholders’ equity?
How to calculate the average total assets and the return on assets?
How to calculate the return on sales,?
How to calculate the debt ratio and the debt-to-equity ratio?
How to calculate the times-interest-earned ratio?
How to calculate the average inventory, the inventory turnover ratio, and the inventory turnover in days?
How to calculate the average accounts receivable, the accounts receivable turnover ratio, and the accounts receivable turnover in days?
How to calculate the current ratio and the quick (or acid-test) ratio?
How to prepare income statements using net sales as the base: vertical analysis?
How to prepare common-size income statements using base period horizontal analysis?
Fred Jackson, president and owner of Bailey Company, is concerned about the company’s ability to obtain a loan from a major bank. The loan is a key factor in the firm’s plan to expand its operations. Demand for the firm’s product is high—too high for the current production capacity to
The comparative balance sheets and income statement of Piura Manufacturing follow.Additional transactions for 20X2 were as follows:a. Cash dividends of $8,000 were paid.b. Equipment was acquired by issuing common stock with a par value of $6,000. The fair market value of the equipment is $32,000.c.
Refer to the information for Blalock Company.The following balance sheets were taken from the records of Blalock Company:Additional transactions were as follows:a. Sold equipment costing $12,000, with accumulated depreciation of $9,000, for $2,000.b. Retired bonds at a price of $60,000 on December
Refer to the information for Blalock Company.The following balance sheets were taken from the records of Blalock Company:Additional transactions were as follows:a. Sold equipment costing $12,000, with accumulated depreciation of $9,000, for $2,000.b. Retired bonds at a price of $60,000 on December
The following balance sheets are taken from the records of Golding Company (numbers are expressed in thousands):Additional information is as follows: (a) equipment costing $10,000,000 was purchased at year-end; no equipment was sold; and (b) net income for the year was $25,000,000, and $10,000,000
The income statement for Mendelin Corporation is as follows:Additional information is as follows:a. Interest expense includes $1,800 of discount amortization.b. The prepaid insurance expense account decreased by $2,000 during the year.c. Wages payable decreased by $3,000 during the year.d. Accounts
Refer to the information for Brierwold Corporation.Balance sheets for Brierwold Corporation follow:Additional transactions were as follows:a. Purchased equipment costing $50,000.b. Sold equipment costing $60,000, with a book value of $25,000, for $40,000.c. Retired preferred stock at a cost of
Refer to the information for Brierwold Corporation.Balance sheets for Brierwold Corporation follow:Additional transactions were as follows:a. Purchased equipment costing $50,000.b. Sold equipment costing $60,000, with a book value of $25,000, for $40,000.c. Retired preferred stock at a cost of
Problem 14-52 Statement of Cash Flows, Worksheet Refer to the information for Rosie-Lee Company.The following balance sheets and income statement were taken from the records of Rosie-Lee Company:Additional transactions were as follows:a. Sold equipment costing $21,600, with accumulated depreciation
Refer to the information for Rosie-Lee Company.The following balance sheets and income statement were taken from the records of Rosie-Lee Company:Additional transactions were as follows:a. Sold equipment costing $21,600, with accumulated depreciation of $16,200, for $3,600.b. Issued bonds for
Refer to the information for Booth Manufacturing.Booth Manufacturing has provided the following financial statements.Other information includes: (a) equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000) and (b) dividends of $225,000 were declared and
Refer to the information for Booth Manufacturing.Booth Manufacturing has provided the following financial statements.Other information includes: (a) equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000) and (b) dividends of $225,000 were declared and
Problem 14-48 Statement of Cash Flows, Direct Method Refer to the information for Roberts Company.The following financial statements were provided by Roberts Company:At the end of 20X2, Roberts purchased some additional equipment for $20,000.Required:Calculate operating cash flows using the direct
Refer to the information for Roberts Company.The following financial statements were provided by Roberts Company:At the end of 20X2, Roberts purchased some additional equipment for $20,000.Required:Prepare a statement of cash flows using the indirect method. Roberts Company Balance Sheets At
Problem 14-46 Statement of Cash Flows, Direct Method Refer to the information for Solpoder Corporation.Solpoder Corporation has the following comparative financial statements:Dividends of $17,100 were paid. No equipment was purchased or retired during the current year.Required:Prepare a statement
Refer to the information for Solpoder Corporation.Solpoder Corporation has the following comparative financial statements:Dividends of $17,100 were paid. No equipment was purchased or retired during the current year.Required:Prepare a statement of cash flows using the indirect method. Assets Cash
Refer to the information for Piura Merchandising Corporation above.Required:Prepare a schedule of operating cash flows using the direct method.
Refer to the information for Piura Merchandising Corporation above.Required:Prepare a schedule that provides the operating cash flows for the year using the indirect method.
Consider the following independent activities:a. Payment of a cash dividendb. Amortization of intangible assetc. Gain on disposal of equipmentd. Exchange of common stock for lande. Increase in accrued wagesf. Retirement of preferred stock g. Purchase of a new plant h. Depreciation expense i.
Refer to the information for Mizukawa Company above.Required:1. Prepare a schedule that provides operating cash flows for the year 20X2 using the direct method.2. Follow the instructions in E14-40, Requirement 4 for inputting the balance sheet and income statement data. Assume Excel was used in
Refer to the information for Mizukawa Company above.Required:1. Calculate the change in cash flows that serves as the control figure for the statement of cash flows.2. Prepare a schedule that provides operating cash flows for the year 20X2 using the indirect method.3. Ignore Requirement 2. Now
Exercise 14-39 Cash Flow from Financing Activities Tidwell Company experienced the following during 20X1:a. Sold preferred stock for $480,000.b. Declared dividends of $150,000 payable on March 1, 20X2.c. Borrowed $575,000 from a bank on a 2-year note.d. Purchased $80,000 of its own common stock to
Exercise 14-38 Cash Flow from Investing Activities During 20X1, Sanchez Company had the following transactions:a. Sold $450,000 of 10-year bonds issued by Makenzie, Inc.b. Acquired land valued at $135,000 in exchange for machinery.c. Sold equipment with original cost of $810,000 for $495,000;
Exercise 14-37 Operating Cash Flows During the year, Hepworth Company earned a net income of $61,725. Beginning and ending balances for the year for selected accounts are as follows:There were no financing or investing activities for the year. The above balances reflect all of the adjustments
Lemming Company showed $283,500 in prepaid rent on December 31, 20X1. On December 31, 20X2, the balance in the prepaid rent account was $343,200. Rent expense for 20X2 was$708,750.Required:1. What amount of cash was paid for rent in 20X2?2. Conceptual Connection What adjustment in prepaid expenses
Consider the following independent events:a. Gain on sale of an assetb. Increase in accounts receivablec. Decrease in prepaid insuranced. Amortization expensee. Increase in accounts payablef. Uncollectible accounts expense g. Decrease in wages payable h. Increase in inventories i. Depreciation
Stillwater Designs is a private company and outsources production of its Kicker speaker lines.Suppose that Stillwater Designs provided you the following transactions:a. Sold a warehouse for $750,000.b. Reported a profit of $100,000.c. Retired long-term bonds.d. Paid cash dividends of $350,000.e.
During 20X2, Evans Company had the following transactions:a. Cash dividends of $6,000 were paid.b. Equipment was sold for $2,880. It had an original cost of $10,800 and a book value of$5,400. The loss is included in operating expenses.c. Land with a fair market value of $15,000 was acquired by
Belnap Company has provided the following partial comparative balance sheets and the income statement for 20X2.Required:Compute operating cash flows using the direct method. Belnap Company Comparative Balance Sheets At December 31, 20X1 and 20X2 Current assets Accounts receivable Inventories
Refer to the information provided in Brief Exercises 14-28, 14-29, and 14-30.Required:1. Prepare a statement of cash flows for Davis Company for 20X2.2. What is the relationship between the statement of cash flows and the change in cash calculated in Brief Exercise 14-27?
Davis Company earned net income of $900,000 in 20X2. Davis provided the following information:Required:Compute the financing cash flows for the current year. Bonds payable Davis Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 $ $ 385,000 Mortgage payable 100,000 Common
Brief Exercise 14-29 Cash Flows from Investing Activities During the year, Davis Company sold equipment with a book value of $280,000 for $380,000 (original purchase cost of $480,000). New equipment was purchased.Davis provided the following comparative balance sheets:Required:Calculate the
Davis Company provided the following partial comparative balance sheets and the income statement for 20X2.Required:Compute operating cash flows using the indirect method. Davis Company Comparative Balance Sheets At December 31, 20X1 and 20X2 Current assets Accounts receivable Inventories Current
Davis Company provided the following information:Required:1. Calculate the change in cash.2. Explain the role of the change in cash flow in the statement of cash flows. Cash Davis Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 $330,000 20X2 $760,000
During the last 2 years of operations, Lelkes Company had the following transactions:a. Purchased land for $1,000,000.b. Issued bonds with a 5-year maturity date for $3,000,000.c. Reported a loss of $2,000,000 for the most recent year.d. Bought equipment for $500,000.e. Issued common stock for
Brief Exercise 14-25 Worksheet Approach During 20X2, Norton Company had the following transactions:a. Cash dividends of $20,000 were paid.b. Equipment was sold for $9,600. It had an original cost of $36,000 and a book value of$18,000. The loss is included in operating expenses.c. Land with a fair
Tidwell Company has provided the following partial comparative balance sheets and the income statement for 20X2.Required:Compute operating cash flows using the direct method. Current assets Accounts receivable Inventories Current liabilities Accounts payable Tidwell Company Comparative Balance
Refer to the information provided in Brief Exercises 14-20, 14-21, and 14-22.Required:1. Prepare a statement of cash flows for Swasey for 20X2.2. What is the relationship between the statement of cash flows and the change in cash calculated in Brief Exercise 14-19?
Brief Exercise 14-22 Cash Flows from Financing Activities Swasey Company earned net income of $1,800,000 in 20X2. Swasey provided the following information:Required:Compute the financing cash flows for the current year. Bonds payable Swasey Company Comparative Balance Sheets At December 31, 20X1
Brief Exercise 14-21 Cash Flows from Investing Activities During the year, Swasey Company sold equipment with a book value of $560,000 for $760,000(original purchase cost of $960,000). New equipment was purchased.Swasey provided the following comparative balance sheets:Required:Calculate the
Brief Exercise 14-20 Operating Cash Flows: Indirect Method Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2:Required:Compute operating cash flows using the indirect method. Current assets Accounts receivable Inventories Current liabilities
Swasey Company provided the following information:Required:1. Calculate the change in cash.2. Explain the role of the change in cash in the statement of cash flows. Cash Swasey Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 $1,400,000 $2,260,000
Brief Exercise 14-18 Activity Classification During the last 2 years of operations, Haws Company had the following transactions:a. Reported a loss for the year ($800,000).b. Reported profits of $6,000,000 for the most recent year.c. Issued bonds with a 6-year maturity date for $2,000,000.d. Retired
14-17 In a completed worksheet,a. the debit column contains the cash inflows.b. the debit column contains the cash outflows.c. the credit column contains the cash inflows.d. the credit column contains only operating cash flows.e. None of these.
14-16 A worksheet approach to preparing the statement of cash flowsa. is a useful aid.b. uses a spreadsheet format.c. offers an efficient and logical way of organizing the data.d. allows an easy extraction of the needed data.e. All of these.
14-15 Which method calculates operating cash flows by adjusting the income statement on a line-by-line basis?a. Direct methodb. Indirect methodc. Working paper approachd. Income methode. None of these
14-14 Which of the following is a financing activity?a. Increase in inventoriesb. Purchase of landc. Increase in accounts receivabled. Issuance of a mortgagee. All of these
14-13 Which of the following is an investing activity?a. Issuance of a mortgageb. Increase in accounts receivablec. Purchase of landd. Increase in inventoriese. All of these
14-12 The gain on sale of equipment is deducted from net income to arrive at operating cash flows becausea. the sale of long-term assets is an operating activity.b. the gain reveals the total cash received.c. all of the cash received from the sale is reported in the operating section.d. All of
14-11 An increase in inventories is deducted from net income to arrive at operating cash flow becausea. cash payments to customers were larger than the purchases made during the period.b. purchases are larger than the cost of goods sold by the amount that inventories increased.c. cash payments to
14-10 An increase in accounts receivable is deducted from net income to obtain operating cash flows becausea. cash collections increased due to increasing sales.b. cash collections from customers were less than the revenues reported.c. cash collections decreased due to declining sales.d. cash
14-9 Which of the following adjustments to net income is needed to obtain cash flows?a. Eliminate gains on sale of equipment.b. Deduct from net income all noncash expenses (e.g., depreciation and amortization).c. Deduct from net income any increases in current liabilities.d. Add to net income any
14-8 Which of the following adjustments helps to convert accrual income to operating cash flows?a. Deduct from net income all noncash expenses.b. Add to net income a decrease in inventories.c. Add to net income a decrease in accounts payable.d. Deduct from net income an increase in accounts
14-7 The difference between the beginning and ending cash balances shown on the balance sheeta. is added to net income to obtain total cash inflows.b. serves as a control figure for the statement of cash flows.c. is deducted from net income to obtain net cash inflows.d. is the source of all
14-6 Using a historic series of operating cash flows to forecast cash flows for future periods is an example of which of the following data analytic types? (See Exhibit 2.2 for a review of data analytic types.)a. Descriptiveb. Normativec. Prescriptived. Predictivee. Diagnostic
14-5 Uses of cash includea. cash dividends.b. the sale of old equipment.c. the purchase of long-term assets.d. only a and b.e. only a and c.
14-4 Sources of cash includea. profitable operations.b. the issuance of long-term debt.c. the sale of long-term assets.d. the issuance of capital stock.e. All of these.
14-3 Raising cash by issuing capital stock is an example ofa. a financing activity.b. an investing activity.c. an operating activity.d. a noncash transaction.e. None of these.
14-2 Cash outflows from operating activities come froma. collection of sales revenues.b. payment for operating costs.c. acquisition of operating equipment.d. retirement of bonds.e. None of these.
14-1 Cash inflows from operating activities come froma. payment for raw materials.b. gains on the sale of operating equipment.c. collection of sales revenues.d. issuing capital stock.e. issuing bonds.
The following balance sheets are taken from the records of Golding:Dividends paid were $10,000.Required:Prepare the operating section of the statement of cash flows using the direct method. 20X1 20X2 Assets Cash $130,000 $150,000 Accounts receivable 25,000 20,000 Plant and equipment 50,000 60,000
The following balance sheets are taken from the records of Golding, Inc.:Additional information is as follows: The company did not keep any excess inventory on hand during the year. Equipment costing $10,000 was purchased at year-end. No equipment was sold.Net income for the year was $25,000, and
How to prepare a statement of cash flows using a worksheet approach?
How to calculate operating cash flows using the direct method?
How to prepare the statement of cash flows?
How to compute financing cash flows?
How to compute investing cash flows?
How to calculate operating cash flows using the indirect method?
How to compute the change in cash?
How to classify activities and identify them as sources or uses of cash?
What are the advantages of a worksheet approach for preparing the statement of cash flows?
Explain how selling manufacturing equipment for a loss can affect both operating and investing cash.
Refer to the comparative balance sheets for Portermart Company in Exhibit 14.3. Other(20X2) transactions include the following:a. Cash dividends of $10,000 were paid.b. Equipment was sold for $8,000. It had an original cost of $30,000 and a book value of$15,000. The loss is included in operating
Is a company required to use the direct method?
What is the difference between the indirect method and the direct method for calculating operating cash flows?
Exhibit 14.2 showed the following information on current assets and liabilities for Lemmons Company:Required:Calculate operating cash flows using the direct method. Net Changes 20X1 20X2 Debit Credit Current assets Accounts receivable $140,000 $112,500 $27,500 Inventories 50,000 60,000 $10,000
Explain why “gain on sale of equipment” is subtracted from net income in calculating operating cash flows.
Retained earnings were $120,000 at the beginning of the year and $160,000 at the end of the year. Net income for the current year was $100,000. Calculate the dividends paid and explain why they are presented in the financing section of the statement of cash flows.
In 20X2, net income of $180,000 was earned, and dividends of $80,000 were paid. Exhibit 14.2 showed the following information on financing transactions for Lemmons Company:Required:Compute the financing cash flows for 20X2. Net Changes 20X1 20X2 Debit Mortgage payable $100,000 Credit $100,000
Equipment with a book value of $50,000 was sold for $70,000 (original purchase cost of$90,000). New equipment was purchased. Exhibit 14.2 showed the following information on investing transactions for Lemmons Company:Required:Calculate the investing cash flows. Long-Term Assets Plant and equipment
Exhibit 14.2 showed the following information on current assets and liabilities for Lemmons Company:Required:Compute operating cash flows using the indirect method. Net Changes 20X1 20X2 Debit Credit Current assets Accounts receivable $140,000 $112,500 $27,500 Inventories 50,000 60,000 $10,000
Exhibit 14.2 showed the following information on cash and cash equivalents for Lemmons Company:Required:Calculate the change in cash. Net Changes Assets Cash 20X1 $70,000 20X2 Debit $175,000 $105,000 Credit
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