Exam 2: Financial Statements and the Annual Report

Marvel Shoes Marvel Shoes reported the following items on its statement of cash flows for the current year: ​ Net cash inflows from operating activities \ 70,000 Net cash out flows from investing activities (20,000) Net cash outflows from financing activities (40,000) Cash balance at the beginning of the year 30,000 ​ -Read the information about Marvel Shoes.What was the amount of net increase or decrease in the cash balance for Marvel Shoes for the current year?

____________________ is the magnitude of an omission or misstatement in accounting information that will affect the judgment of someone relying on the information.

Which of the following is a current asset?

Jackson Transportation purchases many pieces of office furniture with an individual cost below $200 each.Jackson chooses to account for these expenditures as expenses when acquired rather than reporting them as property,plant,and equipment on its balance sheet.The company's accountant and independent CPA agree that no accounting principle has been violated.What accounting justification allows Jackson to expense the furniture?

Huntington Corporation Presented below are all of the items from Huntington Corporation's income statement for the years ending December 31, 2018 and 2017. December 31, 2018 December 31, 2017 Service fees \ 2,300,000 \ 2,100,000 General and administrative expenses 1,900,000 1,500,000 Other income, net 40,000 20,000 Income taxes 150,000 180,000 -Read the information about Huntington Corporation. ? Required Compare the profit margins for 2018 and 2017.Is the company becoming more or less profitable or staying the same? What could be contributing to this?

"Claims to economic resources" are known as

In the Stockholders' Equity section of a classified balance sheet,a distinction is made between amounts invested by owners and amounts accumulated from business earnings.

Powder Corporation began operations on January 2,2016,with a total investment of $150,000 by its stockholders.Net income for its first year of business was $90,000.During 2017 and 2018,net income increased to $188,000 and $217,000,respectively.Powder paid $85,000 in dividends to its shareholders in each of the three years. A) In good form, prepare a statement of retained earnings for the year ended December 31,2017 . B) How much is total retained earnings on December 31,2018? C) Explain the link between the statement of retained eamings and the balance sheet.

Tradewinds Corporation was organized on January 1,2017,with the investment of $500,000 in cash by its stockholders.Tradewinds signed a ten-year,$300,000 promissory note at a local bank during 2017 and received cash in the same amount.The company immediately purchased an office building for $800,000,paying in cash.During its first year,Tradewinds generated $35,000 in cash from operations and paid $30,000 in cash dividends. ​ A)In good form,prepare a statement of cash flows for the year ended December 31,2017. ​ B)What does this statement tell you that an income statement does not?

Which of the following statements is true regarding the multiple-step income statement?

Which of the following events will cause a company's current ratio to rise?

Which of the following best describes a company's operating activities?

The statement of cash flows,like the income statement,reports only operating activities of a company.

Which one of the following is considered a financing activity?

The excess of current assets over current liabilities is referred to as working capital.

Fasoli,Inc. The following balance sheet items from Fasoli,Inc.are listed for December 31,2017: Accounts payable \ 32,650 Interest payable 2,200 Accounts receivable 26,500 Land 250,000 Accumulated depreciation-buildings 40,000 Marketable securities 15,000 Merchandise inventory 112,900 Accumulated depreciation-equipment 12,500 Notes payable, due April 15, 2018 6,500 Office supplies 200 Notes payable, due December 31,2021 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 Salaries payable 7,400 Income taxes payable 7,500 -Read the information about Fasoli,Inc. Required Present the Current Liabilities section (including the total)of a classified balance sheet.

The concept of conservatism is the capacity of information to make a difference in a decision.

A bank loaned $62 million to Apex Corporation to finance the construction of a new distribution warehouse.In which section of Apex's statement of cash flows would you be able to determine whether the company repaid any portion of the debt during the year?

What is the difference between comparability and consistency?

How are assets that are expected to be realized in cash,sold,or consumed within the normal operating cycle of a business or within one year (if the operating cycle is shorter than one year)reported on a classified balance sheet?