Exam 5: Balance Sheet and Statement of Cash Flows

Use the following information for questions The following trial balance of Scott Corp.at December 31, 2007 has been properly adjusted except for the income tax expense adjustment. Cash \ 75,000 Accounts receivable (net) 2,695,000 Inventory 2,085,000 Property, plant, and equipment (net) 7,366,000 Other financial data for the year ended December 31, 2007: -Included in accounts receivable is $1,200,000 due from a customer and payable in quarterly installments of $150,000.The last payment is due December 29, 2009. -The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $20,000 is classified as a current liability. -During the year, estimated tax payments of $525,000 were charged to income tax expense.The current and future tax rate on all types of income is 30%. In Scott's December 31, 2007 balance sheet, -The current assets total is

On the balance sheet, an adjunct account reduces either an asset, a liability, or an owners' equity account.

Which of the following is a current asset?

The current assets section of the balance sheet should include

In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?

Because of the historical cost principle, fair values may not be disclosed in the balance sheet.

Which of the following is not a long-term investment?

Free cash flow is net income less capital expenditures and dividends.

For Nicholson Company, the following information is available: Capitalized leases \ 200,000 Trademarks 65,000 Long-term receivables 75,000 In Nicholson's balance sheet, intangible assets should be reported at

Equity or debt securities held to finance future construction of additional plants should be classified on a balance sheet as

Liquidity refers to the ability of an enterprise to pay its debts as they mature.

A generally accepted account title is

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should generally be classified as cash inflows from

Joe Novak Corporation reports the following information: Net cash provided by operating activities \ 215,000 Average current liabilities 150,000 Average long-term liabilities 100,000 Dividends declared 60,000 Capital expenditures 110,000 Pavments of debt 35,000 Joe Novak's cash debt coverage ratio is

Joe Novak Corporation reports the following information: Net cash provided by operating activities \ 215,000 Average current liabilities 150,000 Average long-term liabilities 100,000 Dividends paid 60,000 Capital expenditures 110,000 Payments of debt 35,000 Joe Novak's free cash flow is

The basis for classifying assets as current or noncurrent is the period of time normally required by the accounting entity to convert cash invested in

Which of the following is not a method of disclosing pertinent information?

Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.

In preparing a statement of cash flows, cash flows from operating activities

Which of the following is not an acceptable major asset classification?