1.Which of the following would not be on the statement of cash flows? a. cash fl
ID: 2456028 • Letter: 1
Question
1.Which of the following would not be on the statement of cash flows?
a. cash flows from financing activities
b. cash flows from investing activities
c. cash flows from contingent activities
d. cash flows from operating activities
2. The order of presentation of activities on the statement of cash flows is
a. operating, investing, and financing
b. operating, financing, and investing
c. financing, investing, and operating
d. financing, operating, and investing
3. Assume the following sales data for a company:
Current year
$325,000
Preceding year
250,000
What is the percentage increase in sales from the preceding year to the current year?
a. 30%
b. 76.9%
c. 50%
d. 70%
4. The relationship of $325,000 to $125,000, expressed as a ratio, is
a. 0.45
b. 2.0
c. 2.6
d. 2.5
5. Accounts payable
$ 40,000
Accounts receivable
65,000
Accrued liabilities
7,000
Cash
30,000
Intangible assets
40,000
Inventory
72,000
Long-term investments
110,000
Long-term liabilities
75,000
Marketable securities
36,000
Notes payable (short-term)
30,000
Property, plant, and equipment
625,000
Prepaid expenses
2,000
Based on the above data, what is the amount of quick assets?
a.$131,000
b.$66,000
c.$205,000
d.$203,000
6. Which of the following measures a company's ability to pay its current liabilities?
a. current ratio
b. inventory turnover
c. earnings per share
d. number of times interest charges earned
Accounts payable
$ 30,000
Accounts receivable
35,000
Accrued liabilities
7,000
Cash
25,000
Intangible assets
40,000
Inventory
72,000
Long-term investments
100,000
Long-term liabilities
75,000
Marketable securities
36,000
Notes payable (short-term)
20,000
Property, plant, and equipment
400,000
Prepaid expenses
2,000
7. Based on the above data, what is the amount of quick assets?
a.$168,000
b.$61,000
c.$60,000
d.$96,000
8. Compute conversion costs given the following data: Direct Materials, $347,500; Direct Labor, $196,300; Factory Overhead, $187,900; and Selling Expenses, $45,290.
a. $187,900
b. $543,800
c. $731,700
d. $384,200
9. Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
a. factory overhead cost
b. product costs
c. miscellaneous expense
d. period cost
10. Given the following data:
Work in process, beginning
$14,000
Work in process, ending
20,000
Direct labor costs
4,000
Cost of goods manufactured
8,000
Factory overhead
8,000
Direct materials used is
a.$4,000
b.$2,000
c.$14,000
d.$8,000
Current year
$325,000
Preceding year
250,000
Explanation / Answer
1. c . Cash flow from contingent activities would not be on the statement of cash flows.
2. a. order of presentation on activities is Operating, Investing and Financing
3. Increase in sales from the preceeding year to the current year = $ (325,000-250,000)
= $ 75,000
Therefor percentage increase in sales = (Increase in Sales/ Sales in preceeding year ) *100
= (75,000/250,000)*100
= 30 % (a)
4. Relationship of $325,000 to $125,000 expressed as a ratio is = 325,000/125,000
=2.6 (c)
5. Quick assets =
Accounts Receivables $65,000
+ Cash $30,000
+ Marketable Securities $36,000
Therefore, Quick assets = $131,000 (a)
6. Current ratio is the measure of a company's ability to pay its current liabilities (a).
7. Quick Assets =
Accounts Receivable $35,000
Cash $ 25,000
Marketable Securities $36,000
Therefore, Quick assets = $ 96,000 (d)
8. Conversion cost = Direct Labor + Manufacturing Overhead
= $ ( 196,300+ 187,900)
= $ 384,200 (d)
9. Cost other than direct materials cost and direct labor cost incurrred in the manufacturing process are classified as (a) Factory overhead cost
10. Closing WIP = Opening WIP+ Manufacturing Cost - Cost of Goods Manufactured
20,000 = 14,000 + Manufacturing Cost - 8,000
Thus, Manufacturing Cost = $14,000
Now, Manufacturing Cost = Direct Material + Direct Labor Costs+ Factory Overhead
or $14,000 =Direct Material + $ (4,000+ 8000)
or Direct Material = $ 2,000 (b)
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