Exam 2: Financial Statements and the Annual Report

Hammar Corporation's partial income statement is as follows: Sales \ 2,400,000 Cost of sales 900,000 Selling expenses 121,600 General and admin. expenses 150,000 ​ Required: Determine the profit margin.Would you invest in Hammar Corporation? Explain your answer.

For each item listed, select the section of the balance sheet in which the item would be reported. -Land

Financial statements are intended to tell the reader the value of a company.

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Purchased equipment for cash

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Received cash from bond issuance

Three common categories of long-term assets are: 1) property, plant, and equipment, 2) investments, and 3) intangibles.

Financing activities are needed to provide the funds to start a business.

If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of

Use the information from Hopper Inc.to answer the following question(s). 2017 2016 Operating revenues \ 1,900,000 \ 1,600,000 Operating expenses 1,400,000 1,100,000 Income taxes 200,000 200,000 ​ ​ -Read the information about Hopper.Inc.Which statement best represents Hopper's performance?

Crystal, Inc.reported $52,000 of net income for 2016.Crystal's balance sheet at December 31, 2016 includes the following amounts: Wages payable \ 1,000 Inventory \ 26,000 Prepaid rent 3,000 Land 40,000 Cash 15,000 Accounts receivable 22,000 Accounts payable 25,000 Capital stock 40,000 Retained earnings 29,000 Income taxes payable 11,000 ​ ​ -Read the information about Crystal, Inc.Has Crystal been profitable since it began operations? How do you know?

Match the following characteristics with the statements about each qualitative characteristic's importance. -This quality refers to an amount large enough to affect a decision.

The following balance sheet items from Fasoli, Inc.are listed for December 31, 2016: Accounts payable \ 32,650 Interest payable 2,200 Accounts receivable 26,500 Land 250,000 Accumulated depreciation-buil dings 40,000 Marketable securities 15,000 Merchandise inventory 112,900 Accumulated depreciation-equipment 12,500 Notes payable, due April 15,2017 6,500 Office supplies 200 Notes payable, due December 31,2020 251,630 Paid-in capital in excess of par value 75,000 Buil dings 150,000 Patents 45,000 Capital stock, \ 1 par value 200,000 Prepaid rent 3,800 Cash 60,990 Retained earnings 113,510 Equipment 84,500 Sal aries payable 7,400 Income taxes payable 7,500 -Read the information about Fasoli, Inc. Required: Present the Current Assets section (including the total) of a classified balance sheet.

For each item listed, select the section of the balance sheet in which the item would be reported. -Accounts receivable

Which one of the following is not a major category for long-term assets?

For each item listed, select the section of the balance sheet in which the item would be reported. -Bonds payable

You are comparing three companies that use different depreciation methods.Which of the following would help you the most in making a comparison of the companies?

Listed below is information from the financial records of Smith Corporation at December 31, 2016: Retained earnings \ 37,000 Notes payable - Due July 1,2019 \ 12,000 Accumulated depreciati on 13,000 Interest payable 1,000 Income taxes payable 24,000 Office supplies 2,000 Buildings 48,000 Accounts payable 46,000 Cash 11,000 Inventory 33,000 Accounts receivable 35,000 Land 50,000 Capital stock 60,000 Prepaid rent 4,000 ​ ​ -Read the information about Smith Corporation. ​ Required: Calculate Smith's current ratio at December 31, 2016.What does this ratio tell you about the "composition" of the current assets?

An objective of financial reporting is to reflect economic information concerning a company's cash flows.

Use the information from Hopper Inc.to answer the following question(s). 2017 2016 Operating revenues \ 1,900,000 \ 1,600,000 Operating expenses 1,400,000 1,100,000 Income taxes 200,000 200,000 ​ ​ -Read the information about Hopper, Inc.Which of the following statements is the best answer regarding the company's profit margin?

From the following list, select the proper section from the statement of cash flows in which it would be classified. -Received cash from the sale of a building