305ex1samp07newf08rev - Sample Exam 1 Questions ACC305...

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Sample Exam 1 Questions ACC305 Anderson Notes: 1) Your actual exam will be similar in that you will be supplied a firm’s B/S, Cash flow statement, and income statement in order to compute ratios. 2) There will be some multiple choice, matching and/or fill in the blank questions such as those given. 3) Do not interpret the number of questions given here as being indicative of the number on your exam. 4) I will hold a review session before the exam. Financial statements for Fin Company are presented below: Fin Company Balance Sheet December 31, 2006 Assets Liabilities & Owners’ Equity Cash $ 40,000 Accounts payable $ 18,000 Accounts receivable 30,000 Taxes payable 3,000 Merch Inv 5,000 Dividends payable 2,000 Buildings and equipment 150,000 Bonds payable 47,000 Accumulated depreciation— buildings and equipment (50,000) Common stock 65,000 Patents 20,000 Retained earnings 60,000 $195,000 $195,000 Fin Company Statement of Cash Flows For the Year Ended December 31, 2006 Cash flows from operating activities Net income $ 50,000 Adjustments to reconcile net income to net cash provided by operating activities: Increase in accounts receivable $(14,000) Increase in merch inventory (3,000) Increase in accounts payable 6,000 Increase in taxes payable 2,000 Increase in dividends payable 2,000 Depreciation—buildings and equipment 8,000 Gain on sale of equipment (4,000) Amortization of patents 1,000 (2,000) Net cash provided by operating activities 48,000 Cash flows from investing activities Sale of equipment 12,000 Purchase of equipment (25,000) Purchase of buildings (48,000 ) Net cash used by investing activities (61,000) Cash flows from financing activities Payment of cash dividend (15,000) Sale of common stock 20,000 Sale of bonds 20,000 Net cash provided by financing activities 25,000
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Net increase in cash 12,000 Cash, January 1, 2006 28 ,000 Cash, December 31, 2006 $ 40 ,000 At the beginning of 2006, Accounts Payable amounted to $12,000, taxes payable was $1,000 and bonds payable was $27,000. Total assets were $112,000 (net). Sales were $307,000, and COGS was $168,850. Interest expense was $1,500; tax expense $16,667. Merch Inv was $2000 at the beginning of the period. The tax rate was .25.
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305ex1samp07newf08rev - Sample Exam 1 Questions ACC305...

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