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

The statement of cash flows summarizes a firm's cash flows and outflows over a period of time.

After grouping assets as current and noncurrent what further classifications within those categories are made when compiling a balance sheet? Assume U.S. GAAP.

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 \ 2,472 Accounts payable \ 5,020 Short-term investment 1,486 Other current liabilities 2,747 Receivables, net 1,300 Total current liabilities 7,767 Merchandise inventories 5,184 Noncurrent liabilities 2,489 Other current assets 1,397 Shareholders' Equity 5,000 Total current assets \ 11,839 Total liabilities and shareholders' equity \ 15,256 Noncurrent assets 3,417 Total assets \ 15,256 Revenues \ 40,339 Costs and Expenses 38,889 Operating Income \ 1,450 Other income/expense (including interest expense of \ 90) (73) Income before income tax 1,377 Income tax expense (161) Net income \ 1,216 Previous Year's Financial Data Total Assets \ 14,113 Shareholder's' Equity \ 3,709 The return on assets for Matthews Corporation is ________. (Round your answer to two decimal places, X.XX.)

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

Teague Industries Presented below is selected financial data for Teague Industries for the current year: Current assets: Current liabilities Cash and cash equivalents \ 3,513 Accounts payable \ 5,335 Short-term investments 1,565 Other current liabilities 2,892 Receivables, net 1,811 Total current liabilities 8,227 Merchandise inventories 6,265 Noncurrent liabilities 5,176 Other current assets 1,915 Shareholders' Equity 6,230 Total current assets 15,069 Total liabilities and shareholders' equity \ 19,633 Noncurrent assets 4,564 Total assets \ 19,633 Revenues \ 50,826 Costs and Expenses 45,963 Operating Income 4,863 Other income/expense (including interest expense of \ 60 ) (36) Income before income tax 4,827 Income tax expense (1,459) Net income \ 3,368 Previous Years' Financial Data Total Assets \ 17,420 Shareholders' Equity 4,020 The return on equity for Teague Industries is ________. (Round your answer to two decimal places, X.XX.)

Bookworm Booksellers reported sales revenue of $350,000 for the fiscal year ended July 31. The accounts receivable balance at the beginning of the year was $23,000 and $42,000 at the end of the year. On the statement of cash flows, what amount of cash would be shown as collected from customers?

Which of the following events would not be treated as a subsequent event?

Describe the statement of cash flows and its purpose including what a financial statement user can determine or assess by reviewing a well-prepared statement of cash flows.

A firm that responds quickly to unexpected circumstances exhibits a high level of financial flexibility.

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 \ 2,472 Accounts payable \ 5,010 Short-term investment 1,456 Other current liabilities 2,717 Receivables, net 1,270 Total current liabilities 7,727 Merchandise inventories 5,134 Noncurrent liabilities 2,469 Other current assets 1,367 Shareholders' Equity 4,970 Total current assets 11,699 Total liabilities and shareholders' equity \ 15,166 Noncurrent assets 3,467 Total assets \ 15,166 Revenues \ 40,339 Costs and Expenses Operating Income \ 1,450 Other income/expense (including interest expense of \ 90) Income before income tax \ 1,387 Income tax expense Net income Previous Year's Financial Data Total Assets Shareholders' Equity The return on equity for Matthews Corporation is ________. (Round your answer to two decimal places, X.XX.)

Hitchcock Enterprises sold a vacant plot of land for $20,000. The company had paid $4,000 for the land ten years ago. On the statement of cash flows, this transaction would be reported as a(n) ________.

Which of the following statements is not true regarding related-party transactions and IFRS?

Baton Rouge Corporation Presented here are cash flows (in $ Millions) for Baton Rouge Corporation's most recent fiscal year: Customers \3 ,500 Interest on investments 700 Sale of old equipment 3,900 Sale of company's capital stock 400 Long-term debt proceeds 2,500 Interest on debt \ 365 Income tax 170 Principal payments on debt 1,300 Purchase of building 900 Purchase of inventory 1,200 Dividends on capital stock 400 Operating expenses 770 Net cash flows provided (used) by investing activities are ________.

Which of the following items is not required to be presented in management's report on internal control?

Presented below are the comparative balance sheets and income statement for Pierce Manufacturing Corporation (in $ millions) for the year ended December 31, Year 2: $\quad$$\quad$$\quad$$\quad$$\quad$$\text {Pierce Manufacturing Corporation}$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Balance Sheet}$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {At December 31, Year 2}$ Assets Cash \ 330 \ 220 Accounts Receivable 825 913 Inventory 704 660 Prepaid Insurance 55 22 Property Plant and Equipment 2,310 1,980 Less: Accumulated Depreciation Totals Liabilities and Shareholders' Equity Accounts Payable \ 330 \ 396 Other Current Liabilities 330 440 Income Taxes Payable 220 165 Notes Payable-long term 880 660 Common Stock 990 880 Retained earnings Totals Pierce Manufacturing Corporation Income Statement For Year Ending December 31, Year 2 Sales \ 7,700 Cost of Goods Sold Gross Profit \ 4,004 Expenses Administrative Expenses \ 1,980 Insurance Expense 110 Depreciation Income before income taxes \ 1,650 Income tax expense Net income Prepare the operating section of the statement of cash flows using the direct method and a reconciliation using the indirect method.

Which of the following statements regarding balance sheet presentation is true?

Which financial statement is the last to be prepared?

Teague Industries Presented below is selected financial data for Teague Industries for the current year: Current assets: Current liabilities Cash and cash equivalents \ 3,583 Accounts payable \ 5,305 Short-term investments 1,625 Other current liabilities 2,892 Receivables, net 1,871 Total current liabilities 8,197 Merchandise inventories 6,185 Noncurrent liabilities 5,226 Other current assets 1,935 Shareholders' Equity 6,290 Total current assets 15,199 Total liabilities and shareholders' equity \ 19,713 Noncurrent assets 4,514 Total assets \ 19,713 Revenues \ 50,826 Costs and Expenses 45,963 Operating Income 4,863 Other income/expense (including interest expense of \ 80 ) (56) Income before income tax 4,807 Income tax expense (1,459) tincome \ 3,348 Previous Years' Financial Data Total Assets \ 17,420 Shareholders' Equity 3,960 The current ratio for Teague Industries is ________. (Round your answer to two decimal places, X.XX.)

Presented below are the comparative December 31 financial statements for Martin Industries, Inc. (in $ Millions). Prepare a statement of cash flows for December 31, Year 2 using the indirect method. Martin Industries, Inc. Balance Sheets At December 31, Year 2 and Year 1 Cash \ 96,719 \ 28,694 Accounts Receivable 100,000 85,313 Inventory 206,250 181,250 Prepaid Insurance 1,875 2,500 Long-term Investments 19,375 106,250 Land, Buildings, and Equipment 1,562,500 1,406,250 Accumulated Depreciation (762,500) (715,000) Total Assets \ 1,224,219 \ 1,095,257 Accounts Payable \ 95,425 \ 185,838 Salaries Payable 25,000 30,625 Notes Payable (long-term) 31,250 93,750 Bonds Payable 250,000 - Common Stock 375,000 375,000 Retained Earnings Additional information for Year 2 (1) Sold available for sale securities costing $86,875 for $92,500. (2) Equipment costing $25,000 with a book value of $6,250 was sold for $7,500 (3) Issued 8% bonds at face value for $250,000. (4) Purchased new equipment for $181,250 and paid cash. (5) Paid cash dividends of $25,000. (6) Net income was $62,500.

If an entity can borrow funds to meet an unexpected financial crisis, it exhibits high ________.