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Accounting Questions

(See attached file for full problem description)

1. Which of the following transactions would be considered a financing activity in preparing a statement of cash flows?
a. Amortizing a discount on bonds payable
b. Recording net income from operations
c. Selling common stock
d. Purchasing inventory

2. The net income for the year ended December 31, 2004, for Ryan Company was $720,000. Additional information is as follows:

Capital expenditures $1,200,000
Depreciation on plant assets 450,000
Cash dividends paid on common stock 180,000
Increase in noncurrent deferred tax liability 45,000
Amortization of patents 21,000

Based on the information given above, what should be the net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2004?
a. $1,056,000.
b. $1,146,000.
c. $1,191,000.
d. $1,236,000.

3. Which of the following items represents a potential use of cash?
a. Patent amortization
b. Sale of plant assets at a loss
c. Net loss from operations
d. Declaration of a stock dividend

4. Information form Kojak Company's balance sheet is as follows:

Current assets:
Cash $ 12,000,000
Short-term investments 20,000,000 Accounts receivable 50,000,000
Inventories 66,000,000
Prepaid expenses 2,000,000 Total current assets $150,000,000

Current liabilities:
Notes payable $ 1,000,000
Accounts payable 18,000,000
Accrued expenses 13,000,000
Income taxes payable 3,000,000
Current portion of long-term debt 5,000,000
Total current liabilities $ 40,000,000

What is the acid-test (quick) ratio?
a. 1:25 to 1
b. 2.05 to 1
c. 2.10 to 1
d. 3.75 to 1

5. The calculation of the number of times interest is earned involves dividing
a. net income by annual interest expense.
b. net income plus income taxes by annual interest expense.
c. net income plus income taxes and interest expense by annual interest expense.
d. none of the above.

6. If a firm has Preferred stock, state the Earnings per Share calculation.

8. If someone is going to pay you $5,000 in four years from now, what is the present value of that payment is the current interest is 5%?


Solution Summary

The solution has various multiple choice questions in accounting