September 2023 ACCT 504 Accounting and Finance Managerial Use and Analysis Final Exam Set 4

2024 ACCT 504 Accounting and Finance Managerial Use Final Exam Set 4 Devry Assignment Help

ACCT 504 Accounting and Finance Managerial Use and Analysis Final Exam Set 4 2023

ACCT 504 (Accounting and Finance, Managerial Use and Analysis) Final Exam Set 4 1. (TCO A) Which of the following is an advantage of the sole proprietorship relative to the corporate form of business organization? (Points : 5) 2. (TCO A) Dividends _____. (Points : 5) 3. (TCOs A, B) Below is a partial list of account balances for LBJ Company: Cash $15,000 Prepaid insurance 5,000 Accounts receivable 2,500 Accounts payable 3,000 Notes payable 6,000 Common stock 10,000 Dividends  500 Revenues 15,000 Expenses 13,000 What did LBJ Company show as total debits? (Points : 5) 4. (TCOs B, E) Why is the accrual basis of accounting preferred by GAAP? (Points : 5) 5. (TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the highest amount of net income?(Points : 5) 6. (TCOs A, E) Equipment was purchased for $75,000 on January 1, 2011. Freight charges of $3,200 were incurred and there was a cost of $6,000 for installation. It is estimated the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense for 2011 using the straight-line method will be _____. (Points : 5) 7. (TCO D,G) Payne Corporation issues 100 twenty-year, 6%, $1,000 bonds dated July 1, 2010, at 94. The journal entry to record the issuance will show a _____. (Points : 5) 8. (TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $100,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points : 5) 9. (TCO F) If you are making comparisons within a company to detect changes in financial relationships and significant trends, you are performing what type of analysis? (Points : 5) 10. (TCO F) The formula for performing horizontal analysis is _____. (Points : 5) 11. (TCO F) Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time _____.(Points : 5) 12. (TCO F) A common measure of liquidity is _____. (Points : 5) 13. (TCO F) Short-term creditors would be most interested in which of the following ratios? (Points : 5) 14. (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5) 1. (TCO A) Use the following partial financial statement information below to calculate the liquidity and profitability ratios. This information can be used to correctly solve each of the ratios below. Average common shares outstanding 35,000 Current liabilities $25,000 Capital expenditures $20,000 Net income $50,000 Cash provided by operations $77,000 Net sales $100,000 Preferred stock dividends paid $30,000 Total liabilities $50,000 Current assets $20,000 Total assets $80,000 Instructions: Compute the following. a) Current ratio b) Working capital c) Earnings per share d) Debt-to-total-assets ratio e) Free cash flow 2. (TCO D) The Oxford Company has budgeted sales revenues as follows. Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit, with 60% paid in the month of purchase and 40% in the month following purchase. Budgeted inventory purchases are $260,000 in October, $180,000 in November, and $84,000 in December. Other budgeted cash receipts include (a) the sale of plant assets for $49,400 in November and (b) the sale of new common stock for $67,400 in December. Other budgeted cash disbursements include (a) operating expenses of $27,000 each month, (b) selling and administrative expenses of $50,000 each month, (c) dividends of $76,000 to be paid in November, and (d) purchase of equipment for $24,000 cash in December. The company has a cash balance of $40,000 at the beginning of December and wishes to maintain a minimum cash balance of $40,000 at the end of each month. An open line of credit is available at the bank and carries an annual interest rate of 12%. Assume that all borrowing is done on the first day of the month in which financing is needed and that all repayments are made on the last day of the month in which excess cash is available. Also assume that $14,000 of financing was obtained on November 1. Requirements: Use this information to prepare a schedule of expected cash payments for purchases of inventory for the months of November and December only. This question does not require creation of an entire cash budget so please only create the schedule that is asked for in the question because otherwise you will be wasting valuable time. 3. (TCOs B, E) The following items are taken from the financial statements of Lansing Company for 2010. 4. (TCO D) Your friend James has hired you to evaluate the following internal control procedures. 5. (TCOs D, E) Please prepare the following journal entries. Indicate which account should be debited with the abbreviation DR in front of the account name and which account should be credited with the abbreviation CR in front of the account name along with the dollar amount of the debit and credit. 6. (TCO C) Please indicate which section of the statement of cash flows should contain each of the following items and whether each item would result in an inflow or outflow of cash. The sections are Operating, Investing, and Financing.

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