Exam 2: Financial Statements, Cash Flows, and Taxes

A corporation has year end 2001 and 2002 retained earnings balances of $320,000 and $400,000,respectively. The firm reported net income after taxes of $100,000 in 2002. The firm paid dividendsin 2002 of___________ .

A corporation has a year end 2001 retained earnings balance of $220,000. The firm reported net income after taxes of $50,000 in 2002 and paid dividends in 2002 of $30,000. The firm's retained earnings balance at year end 2002 is ___________ .

Inputs to the statement of cash flows from the income statement include all of the followingEXCEPT

The more risky an investment, the greater the investor's expected return and the greater the probability of less than desireable results.

Corporation X needs $1,000,000 and can raise this through debt at an annual rate of 10 percent, orpreferred stock at an annual cost of 7 percent. If the corporation has a 40 percent tax rate, theafter-tax cost of each is

Both present and prospective shareholders are interested in the firm's current and future level of risk and return. These two dimensions directly affect share price.

RUFF 5ANDPAPER CO. Balance Sheets For the Years Ended 2002 and 2003 2003 2002 Assets Cash 800 600 Marketable securities 200 200 Accounts receivable 1,200 1,000 Inventories 2,000 1,800 Gross fixed asset 3,000 2,800 Less Accumulated amortization 1,000 800 Net fixed assets 2,000 2,000 --- --- Total assets 6,200 5,600 Liabilities Accounts payable 200 100 Notes payable 800 900 Accruals 100 100 Long-term debt 2,000 1,500 Stockholders' equity Common stock 2,500 2,500 Retained eamings 600 500 --- ---- Total liabilities and equity 6,200 5,600 -Use of funds for 2003 totaled ____________

The statement of retained earnings reports all of the following EXCEPT

Publicly owned corporations are required by the provincial securities commissions and stock exchanges to provide their stockholders with an annual stockholders' report.

A corporation raises $500,000 in long-term debt to acquire additional plant capacity. This is considered

The balance sheet is a statement which balances the firm's assets (what it owns) against its debt(what it owes).

All of the following are noncash charges EXCEPT

Cash flows that result from debt and equity financing transactions, including incurrence andrepayment of debt, cash inflows from the sale of stock, and cash outflows to pay cash dividends orrepurchase stock are called

Unlike the United States, in Canada public corporations have no obligation to report their financial results through an annual report to shareholders.

On the balance sheet net fixed assets represent

Business firms are permitted to systematically charge a portion of the market value of fixed assets, as depreciation, against annual revenues.

Retained earnings on the balance sheet represents

A firm has just ended the calendar year making a sale in the amount of $150,000 of merchandisepurchased during the year at a total cost of $112,500. Although the firm paid in full for themerchandise during the year, it has yet to collect at year end from the customer. The net profit and cash flow for the year are

Under the capital cost allowance (CCA) procedures, the depreciable value of a fixed asset is its full cost, including outlays for installation.

A corporation