Exam 2 Review Answer.docx - Exam Two Review This review...

Exam Two Review
This review covers Ch 4-6
1. How would you classify goodwill on the balance sheet?
a. Current asset
b. Long term asset
c. Long term liability
d. Intangible assets
2. How would you classify land on the balance sheet? 3. Which of the following accounts require a subjective estimation by management? 4. Rachel Green has the following information related to her company: Patent $230,000,
Equity Investments $310,000, Unrealized gains from Available-for-sale securities
$440,000, Sales Revenue $754,000, Sales Return and Allowances $100,000, Sales
Discounts $55,000, Operating Expenses $110,000, Investment Revenue $20,000,
Beginning Balance of Retained Earnings at Jan 1 st of $398,000, Dividends declared and
paid of $15,000, Common Stock $120,000. What would Rachel Green record as her total
stockholders’ equity on her balance sheet?
Rev 754000
ret 100000
disc 55000
oper ex 110000
invest 20000
509000
bb re 398000
ni 509000
div 15000
eb 892000

CS 120000
AFS 440000
SE
145200
0
5. Monica Geller loans Joey $150,000 and Joey uses $100,000 to pay off some of his credit
card debt and the remaining $50,000 is used to buy a car. How would Monica Geller
record this loan to Joey on her statement of cash flows?
a. $0 (non-cash activity)
b. $150,000 in the operating section
c. $150,000 in the investing section
d. $100,000 on the operating section and $50,000 in the investing activities