Matthews Company Presented below is selected financial information for Matthews Corporation for the most recent fiscal year ended December 31 ($ millions) \[\begin{array} { | l | r | l | r | } \hline \text { Current assets: } & & \text { Current liabilities: } & \\ \hline \text { Cash and cash equivalents } & \$ 2,442 & \text { Accounts payable } & \$ 5,000 \\ \hline \text { Short-term investment } & 1,416 & \text { Other current liabilities } & 2,777 \\ \hline \text { Receivables, net } & 1,310 & \text { Total current liabilities } & 7,777 \\ \hline \text { Merchandise inventories } & 5,184 & \text { Noncurrent liabilities } & 2,519 \\ \hline \text { Other current assets } & 1,417 & \text { Shareholders' Equity } & 5,030 \\ \hline \text { Total current assets } & 11,769 & \text { Total liabilities and shareholders' equity } & \$ 15,326 \\ \hline \text { Noncurrent assets } & 3,557 & & \\ \hline \text { Total assets } & \$ 15,326 & & \\ \hline \end{array}\] \[\begin{array} { | l | r | } \hline \text { Revenues } & \$ 40,339 \\ \hline \text { Costs and Expenses } &\underline{ 38,889} \\ \hline \text { Operating Income } & \$ 1,450 \\ \hline \begin{array} { l } \text { Other income/expense (including interest expense of } \\ \$ 90 ) \end{array} & \underline{( 73 ) }\\ \hline \text { Income before income tax } & 1,377 \\ \hline \text { Income tax expense } &\underline{ ( 151 ) }\\ \hline \text { Net income } &\underline{ \$ 1,226 }\\ \hline \end{array}\] $\begin{array}{lrr} \text { Previous Year's Financial Data } &\\ \text { Total Assets } &\underline{\$13,913}\\ \text { Shareholders' Equity} &\underline{\$4,109}\\ \end{array}$ The financial leverage for Matthews Corporation is ________. (Round your answer to two decimal places, X.XX.)

A) 2.86 B) 3.05 C) 3.20 D) 3.39 A) 2.86 B) 3.05 C) 3.20 D) 3.39

Presented below are activities from Prosser Industries, Inc. \[\begin{array} { | l | l | } \hline { \text { Activity } } & \underline { \mathrm { O } , \mathrm { I } , \text { or F } } \\ \hline \text { Purchase of equipment with cash } & \\ \hline \text { Sale of treasury stock } & \\ \hline \text { Payments to employees } & \\ \hline \text { Sale of idle land } & \\ \hline \text { Purchase of inventory with cash } & \\ \hline \text { Payment of dividends to shareholders } & \\ \hline \text { Redemption of bonds payable } & \\ \hline \text { Sale of long-term investments } & \\ \hline \text { Payment of interest on bonds payable } & \\ \hline \end{array}\] Required: Please indicate whether each of these activities is classified as an (O)perating, (I)nvesting, or (F)inancing Activity on the statement of cash flows.

\[\begin{array} { | l | c | } \hline {

Classify the following accounts as assets (A), liabilities (L), or shareholders' equity (SE) and whether they are current (C), non-current (NC), or not applicable (N/A). \[\begin{array} { | l | l | l | } \hline { \text { Account } } & \underline { \mathrm { A } , \mathrm { L } , \mathrm { SE } } & \underline { \mathrm { C } , \mathrm { NC } , \mathrm { N } / \mathrm { A } } \\ \hline \text { Accounts Receivable } & & \\ \text { Accounts Payable } & & \\ \text { Supplies } & & \\ \hline \text { Bonds Payable (due in 10 years) } & & \\ \hline \begin{array} { l } \text { Investment in A Company } \\ \text { (to be sold in 6 months) } \end{array} & & \\ \hline \text { Copyright } & & \\ \hline \text { Additional Paid-in Capital } & & \\ \hline \text { Retained Earnings } & & \\ \hline \text { Land } & & \\ \hline \text { Wages Payable } & & \\ \hline \end{array}\]

\[\begin{array} { | l | l | l | } \hlin

Exam 6: Statements of Financial Position and Cash Flows and the Annual Report

Matthews Company Presented below is selected financial information for Matthews Corporation for the most recent fiscal year ended December 31 ($ millions) Current assets: Current liabilities: Cash and cash equivalents \ 2,442 Accounts payable \ 5,000 Short-term investment 1,416 Other current liabilities 2,777 Receivables, net 1,310 Total current liabilities 7,777 Merchandise inventories 5,184 Noncurrent liabilities 2,519 Other current assets 1,417 Shareholders' Equity 5,030 Total current assets 11,769 Total liabilities and shareholders' equity \ 15,326 Noncurrent assets 3,557 Total assets \ 15,326 Revenues \ 40,339 Costs and Expenses Operating Income \ 1,450 Other income/expense (including interest expense of \ 90) Income before income tax 1,377 Income tax expense Net income Previous Year's Financial Data Total Assets Shareholders' Equity The financial leverage for Matthews Corporation is ________. (Round your answer to two decimal places, X.XX.)

(Multiple Choice)

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Question 21

Which of the following is not a component of shareholders' equity?

(Multiple Choice)

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Question 22

The Management Discussion and Analysis section of the annual report is a part of the audited financial statements.

(True/False)

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Question 23

The FASB prefers the indirect method of preparing the operating activities section of the statement of cash flows.

(True/False)

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Question 24

Hackett, Inc. had property tax payable of $940,000 and $100,000 at the end of 2018 and 2019 respectively. During 2019, Hackett recorded $790,000 in property tax expense on its income statement. Cash outflows for property tax during 2019 were ________.

(Multiple Choice)

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Question 25

Which of the following is not considered an investing activity when preparing the statement of cash flows?

(Multiple Choice)

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Question 26

Which of the following is not considered a financing activity when preparing the statement of cash flows?

(Multiple Choice)

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Question 27

The balance sheet reflects the financial position of an entity over a period of time.

(True/False)

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Question 28

Which of the following is not a current liability?

(Multiple Choice)

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Question 29

Presented below are activities from Prosser Industries, Inc. Activity Purchase of equipment with cash Sale of treasury stock Payments to employees Sale of idle land Purchase of inventory with cash Payment of dividends to shareholders Redemption of bonds payable Sale of long-term investments Payment of interest on bonds payable Required: Please indicate whether each of these activities is classified as an (O)perating, (I)nvesting, or (F)inancing Activity on the statement of cash flows.

(Essay)

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Question 30

Which of the following information is found in the summary of significant accounting policies?

(Multiple Choice)

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Question 31

Classify the following accounts as assets (A), liabilities (L), or shareholders' equity (SE) and whether they are current (C), non-current (NC), or not applicable (N/A). Account Accounts Receivable Accounts Payable Supplies Bonds Payable (due in 10 years) Investment in A Company (to be sold in 6 months) Copyright Additional Paid-in Capital Retained Earnings Land Wages Payable

(Essay)

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Question 32

Purchases of fixed assets are classified as investing activities on the statement of cash flows.

(True/False)

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Question 33

List the types of opinions that may be issued by an auditor on a company's financial statements and explain the circumstances under which it is issued.

(Essay)

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Question 34

Which of the following topics is not required by the Securities and Exchange Commission to be included in the Management Discussion and Analysis section?

(Multiple Choice)

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Question 35

Presented below are selected accounts for San Marcos Corporation for December 31 of the current year. What are total liabilities for San Marcos Corporation?

(Multiple Choice)

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Question 36

Define the Dupont Analysis model and explain the relationship between its components.

(Essay)

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Question 37

If an auditor is unable to form an opinion on the fair presentation of the financial statements, a disclaimer of opinion will be issued.

(True/False)

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Question 38

Explain the difference between the direct and indirect methods of preparing the operating section of the statement of cash flows. Which method is preferred by GAAP?

(Essay)

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Question 39

The only difference between the statement of cash flows under the indirect method and the direct method is in the reporting of cash flows from operating activities.

(True/False)

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Question 40

Exam 6: Statements of Financial Position and Cash Flows and the Annual Report

Which of the following is not a component of shareholders' equity?

The Management Discussion and Analysis section of the annual report is a part of the audited financial statements.

The FASB prefers the indirect method of preparing the operating activities section of the statement of cash flows.

Hackett, Inc. had property tax payable of $940,000 and $100,000 at the end of 2018 and 2019 respectively. During 2019, Hackett recorded $790,000 in property tax expense on its income statement. Cash outflows for property tax during 2019 were ________.

Which of the following is not considered an investing activity when preparing the statement of cash flows?

Which of the following is not considered a financing activity when preparing the statement of cash flows?

The balance sheet reflects the financial position of an entity over a period of time.

Which of the following is not a current liability?

Which of the following information is found in the summary of significant accounting policies?

Purchases of fixed assets are classified as investing activities on the statement of cash flows.

List the types of opinions that may be issued by an auditor on a company's financial statements and explain the circumstances under which it is issued.

Which of the following topics is not required by the Securities and Exchange Commission to be included in the Management Discussion and Analysis section?

Presented below are selected accounts for San Marcos Corporation for December 31 of the current year. What are total liabilities for San Marcos Corporation?

Define the Dupont Analysis model and explain the relationship between its components.

If an auditor is unable to form an opinion on the fair presentation of the financial statements, a disclaimer of opinion will be issued.

Explain the difference between the direct and indirect methods of preparing the operating section of the statement of cash flows. Which method is preferred by GAAP?

The only difference between the statement of cash flows under the indirect method and the direct method is in the reporting of cash flows from operating activities.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

The Statement of Cash Flows

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