Exam 5: Balance Sheet and Statement of Cash Flows

Companies have the option of disclosing information about the nature of their operations and the use of estimates in preparing financial statements.

Lincoln Corporation reports the following information: Net cash provided by operating activities \ 255,000 Average current liabilities 150,000 Average long-term liabilities 100,000 Dividends paid 60,000 Capital expenditures 110,000 Pavments of debt 35,000 Lincoln's cash debt coverage ratio is

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 final retained earnings balance is

Collection of a loan is reported as an investing activity in the statement of cash flows.

Porter Corporation reports the following information: Net income \ 250,000 Depreciation expense 70,000 Increase in accounts receivable 30,000 Porter should report cash provided by operating activities of

The correct order to present current assets is

The balance sheet is useful for analyzing all of the following except

It is mandatory that the essential provisions of which of the following be clearly stated in the notes to the financial statements?

Working capital is

The statement of cash flows provides answers to all of the following questions except

On January 4, 2007, Gregg Co.leased a building to Cole Corp.for a ten-year term at an annual rental of $75,000.At inception of the lease, Gregg received $300,000 covering the first two years' rent of $150,000 and a security deposit of $150,000.This deposit will not be returned to Cole upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.What portion of the $300,000 should be shown as a current and long-term liability in Gregg's December 31, 2007 balance sheet? Current Liability Lonq-term Liability a. \ 0 \ 300,000 b. \ 75,000 \ 150,000 c. \ 150,000 \ 150,000 d. \ 150,000 \ 75,000

Craig Rusch Corporation reports the following information: Net income \ 500,000 Depreciation expense 140,000 Increase in accounts receivable 60,000 Rusch should report cash provided by operating activities of

Making and collecting loans and disposing of property, plant, and equipment are

Financial flexibility is a company's ability to respond and adapt to financial adversity and unexpected needs and opportunities.

The current cash debt coverage ratio is often used to assess

The primary purpose of a statement of cash flows is to report the cash effects of operations during a period.

Stanton Company has the following items: common stock, $720,000; treasury stock, $85,000; deferred taxes, $100,000 and retained earnings, $363,000.What total amount should Stanton Company report as stockholders' equity?

Land held for speculation is reported in the property, plant, and equipment section of the balance sheet.

Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

For Mitchell Company, the following information is available: Capitalized leases \ 280,000 Trademarks 90,000 Long-term receivables 105,000 In Mitchell's balance sheet, intangible assets should be reported at