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

Teague Industries Presented below is selected financial data for Teague Industries for the current year: Current assets: Current liabilities Cash and cash equivalents \ 3,553 Accounts payable \ 5,305 Short-term investments 1,595 Other current liabilities 2,872 Receivables, net 1,841 Total current liabilities 8,177 Merchandise inventories 6,185 Noncurrent liabilities 5,196 Other current assets 1,975 Shareholders' Equity 6,280 Total current assets 15,149 Total liabilities and shareholders' equity \ 19,653 Noncurrent assets 4,504 Total assets \ 19,653 Revenues \ 50,826 Costs and Expenses 45,963 Operating Income 4,863 Other income/expense (including interest expense of \ 50 ) (26) Income before income tax 4,837 Income tax expense (1,419) Net income \ 3,418 Previous Years' Financial Data Total Assets \ 17,220 Shareholders' Equity 3,970 The financial leverage for Teague Industries 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 is working capital for San Marcos Corporation?

Which of the following adjustments to net income is incorrect when using the indirect method for computing cash flows from operating activities?

When preparing the operating section of the statement of cash flows using the direct method, which of the following statements is true?

When preparing the operating activities section of the statement of cash flows under the direct method, an increase in accounts receivable is subtracted from sales.

Johnson Company presented its financial statements to a local bank as part of a loan application. The loan officer was concerned because, even though cash flow had increased during the year and net income was positive, net cash flows from operating activities had a significant negative balance. At the same time, the company had sold a large part of its investment portfolio and issued additional stock to its shareholders. Write a memo to Johnson Company and explain the loan officer's concern. Include the relationship between cash flows from the three types of activities.

When preparing the operating section of the statement of cash flows using the indirect method, which of the following items are added to net income?

Which of the following would be disclosed in the summary of significant accounting policies?

Teague Industries Presented below is selected financial data for Teague Industries for the current year: Current assets: Current liabilities Cash and cash equivalents \ 3,573 Accounts payable \ 5,365 Short-term investments 1,625 Other current liabilities 2,892 Receivables, net 1,861 Total current liabilities 8,257 Merchandise inventories 6,265 Noncurrent liabilities 5,176 Other current assets 1,945 Shareholders' Equity 6,250 Total current assets 15,269 Total liabilities and shareholders' equity \ 19,683 Noncurrent assets 4,414 Total assets \ 19,683 Revenues \ 50,826 Costs and Expenses 45,963 Operating Income 4,863 Other income/expense (including interest expense of \ 50 ) (26) Income before income tax 4,837 Income taxexpense (1,449) Net income \ 3,388 Previous Years' Financial Data Total Assets \ 17,420 Shareholders' Equity 4,040 Statement of Cash Flows (excerpt) For the most recent fiscal year ended December 31 Interest paid $90 The interest coverage ratio for Teague Industries is ________. (Round your answer to two decimal places, X.XX.)

A subsequent event is one that takes place after a company's year-end and after the financial statements are issued.

A company reporting under IFRS must list its liabilities in order of liquidity for each grouping.

Hendrickson Corporation's trial balance for July 31, the end of its fiscal year, included the following accounts: Accounts Receivable \ 21,000 Inventories 57,000 Copyright 18,000 Investments 41,000 Prepaid Insurance 6,000 Note receivable, due in two years 74,000 Cash in Bank 4,500 Investments are treasury bills that were purchased in May and mature on August 15. Prepaid insurance is a three-year policy that was purchased on July 31. The amount that should be classified as current assets in the July 31 balance sheet is ________.

Which of the following is not a cash flow measure?

Which of the following adjustments to net income is correct when using the indirect method for computing cash flows from operating activities?

In order to sustain operations, a firm must have positive cash flows from operating activities over the long run.

Solvency measures a company's ability to meet its long-term obligations as they become due.

The relevance of the balance sheet is limited because many assets are recorded at historical costs.