Exam 2: Financial Statements and the Annual Report

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

Hopper,Inc. Use the information from Hopper Inc.to answer the following question(s). Read the information about Hopper,Inc.Which ratio are you able to calculate given only the information provided by Hopper?

____________________ is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

Most businesses have an operating cycle of less than one year.

One primary purpose of a classified balance sheet is to help users evaluate the liquidity of a company.

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

____________________ is the capacity of information to make a difference in a decision

Liquidity relates to a company's ability to do which of the following?

The primary responsibility for the preparation and integrity of the financial statements in an annual report belongs to the company's independent accountants (CPAs).

One significant difference between a classified and a non-classified balance sheet is the distinction between which of the following items?

In the independent auditors' report included with the annual report,management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements.

A construction company that builds skyscrapers is likely to have an operating cycle longer than one year.

Which of the following terms characterizes the time period between the investment of cash in merchandise and the collection of cash from the sale of that merchandise?

The purpose of financial reporting is to provide economic information to external decision makers only.

Marvel Shoes Marvel Shoes reported the following items on its statement of cash flows for the current year: Read the information about Marvel Shoes.What was the cash balance for Marvel Shoes at the end of the current year?

Most financial reports contain the following list of basic elements.For each element identify the person(s)who prepared the element and describe the information a user would expect to find in each element.

Use Rizwi Corporation's list of accounts at December 31,2014 to answer the following question. What is Rizwi Corp.'s current ratio?

The 2014 income statement of Cigmar Enterprises shows operating revenues of $120,500,selling expenses of $35,200,general and administrative expenses of $29,900,interest expense of $1,500,and income tax expense of $10,520.Cigmar's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the year.The company has 20,000 shares of stock outstanding at December 31,2014. REQUIRED: Compute Cigmar's profit margin.What other information would you need in order to comment on whether this ratio is favorable?

Tradewinds Corporation was organized on January 1,2014,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 2014 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 31,2014. B)What does this statement tell you that an income statement does not?

Coglin,Inc.incurred a net loss of $20,000 for 2014.The balance sheet at December 31,2014,for Coglin,Inc. ,includes the following items: