11 Jun ACC 291-Which of the following is an operating activity
Question
Which of the following is an operating activity?
a. Payment of a cash dividend
b. Sale of equipment
c. Making a loan to another entity
d. Payment of interest
Which is an example of a cash flow from an investing activity?
a. Receipt of cash from the issuance of bonds payable
b. Payment of cash to repurchase outstanding capital stock
c. Receipt of cash from the sale of equipment
d. Payment of cash to suppliers for inventory
Hanover, Inc. purchased land through the issuance of long-term bonds. How is this reported on the statement of cash flows?
a. Operating activity
b. Significant noncash investing and financing activity that merits disclosure
c. Financing outflow
d. Investing inflow
Under the indirect method of preparing the statement of cash flows, which of the following is added to net income in the operating activities section?
a. Gain on sale of equipment
b. Depreciation expense
c. Decrease in accounts payable
d. Increase in accounts receivable
In what section of the statement of cash flows will the issuance of bonds payable to acquire a building be reported?
a. Cash flows from operating activities
b. Cash flows from investing activities
c. Cash flows from financing activities
d. Noncash investing and financing activities
Which of the following items is reported in the operating activities section of a statement of cash flows prepared using the direct method?
a. Cash payments to suppliers
b. Loss on sale of building
c. Depreciation expense
d. Increase in accounts receivable
In horizontal analysis of a balance sheet, of what amount is each item expressed as a percentage?
a. Current year net income amount
b. Base-year amount
c. Current year stockholders’ equity amount
d. Current year total assets amount
The following schedule is a display of what type of analysis?
Amount Percent
Current assets $200,000 25%
Property, plant, and equipment 600,000 75%
Total assets $800,000 100%
a. Trend analysis
b. Vertical analysis
c. Ratio analysis
d. Horizontal analysis
Ceradyne, Inc. presented the following data for a company:
Current liabilities $360
Long-term debt 480
Common stock 640
Retained earnings 520
Total liabilities & stockholders’ equity $2,000
How would common stock appear on a common size balance sheet using vertical analysis?
a. 32.0%
b. Cannot be determined from the data given
c. 55.1%
d. 75.0%
Practice Question 44
Use the following financial statement information as of the end of each year to answer this question.
2017 2016
Inventory $54,000 $48,000
Current assets 81,000 106,000
Total assets 392,000 336,000
Current liabilities 27,000 36,000
Total liabilities 102,000 88,000
Total stockholders’ equity 290,000 248,000
Preferred stock 10,000 10,000
Net sales 784,000 697,000
Cost of goods sold 306,000 277,000
Net income 34,000 90,000
Tax expense 22,000 18,000
Interest expense 12,000 12,000
Dividends paid to preferred stockholders 2,000 2,000
Dividends paid to common shareholders 1,000 1,000
Compute the profit margin for 2017.
a. 8.4%
b. 4.3%
c. 11.7%
d. 8.9%
Answer:
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