A2301-F09-FinalExamSolutions

A2301-F09-FinalExamSolutions - Managerial Accounting Acct...

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Managerial Accounting Acct 2301 - Fall 2009 Final Exam – Version 1 Name: _________________________________ This exam contains 34 multiple-choice questions. Please select the best answer for each question and record your selection in the appropriate space on your scantron. Minor rounding ( $5) is acceptable for PV problems. 1. Raising cash by issuing capital stock is an example of a. An operating activity b. An investing activity c. A financing activity d. A noncash transaction e. None of the above 2. An increase in inventories is deducted from net income to arrive at operating cash flow because a. Cash payments to customers were larger than the purchases made during the period b. Cash payments to customers were less than the purchases made during the period c. Purchases are larger than the cost of goods sold by the amount that inventories increased d. Purchases are less than the cost of goods sold by the amount that inventories increased e. All of the above 3. Daniels Company provided the following account balance information for the years 2007 and 2008: Account Title 12/31/07 12/31/08 Accounts Receivable $3,700 $4,600 Inventory $2,500 $3,000 Prepaid Expense $2,300 $ 500 Accounts Payable $4,300 $5,800 Unearned Revenue $3,200 $1,900 (Note: Unearned Revenue is a short-term liability.) Net income for 2008 was $10,000, which included depreciation expense of $2,500 and a gain of $500 from the sale of capital assets. What is the company’s net cash flows from operating activities for 2008? a. $12,600 b. $13,100 c. $10,600 d. $14,600 e. None of the above
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4. During the year, Hobart Company’s equipment account increase by $10,000. The company sold equipment for $12,000 which had an original cost of $8,000. The net book value of the equipment was $2,000. The company also purchased new equipment during the year. What is the amount of net cash flow from investing activities? a. Net cash inflow of $6,000 b. Net cash outflow of $6,000 c. Net cash inflow of $10,000 d. Net cash outflow of $10,000 e. None of the above 5. Danforth Company’s retained earnings balance on 1/1/08 was $100,000 and the balance on 12/31/08 was $118,000. The company reported net income of $25,000 for 2008. Additionally the company issued capital stock of $20,000, reduced long-term debt by $12,000, and paid dividends to its shareholders. What is the company’s net cash flow from financing activities for 2008? a. Net cash inflow of $26,000 b. Net cash inflow of $16,000 c. Net cash inflow of $33,000 d. Net cash inflow of $1,000 e. None of the above 6. Jenkins Company paid the following during 2008: cash to suppliers/vendors - $25,000; cash dividends - $15,000; cash for salaries - $30,000; cash to purchase new equipment - $50,000. Based on this information, what is the amount of cash used by investing activities for 2008? a.
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This document was uploaded on 10/27/2011 for the course BUSINESS ALL at Texas Tech.

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A2301-F09-FinalExamSolutions - Managerial Accounting Acct...

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