Corporate Finance_Final Exam
pdf
keyboard_arrow_up
School
California Polytechnic State University, Pomona *
*We aren’t endorsed by this school
Course
MISC
Subject
Finance
Date
Jan 9, 2024
Type
Pages
6
Uploaded by alexana0808
UOG-Corporate Finance
NAME
:
STUDENT ID
:
1. All of the following information, except one, should be disclosed as supplemental
information in the statement of cash flows. Which one is the exception?
A. Cash flow per share
B. Conversion of debt to equity
C. Issuance of common stock to purchase assets
D. Exchange of long-term assets
2. Golden Co. is using the indirect method to prepare its Y1 statement of cash flows.
On 7/1/Y1, Golden Co. sold an equipment with a gain. How should Golden Co. deal
with this gain for its Y1 statement of cash flows?
A. Deduct from sale proceeds to calculate net cash provided by investing activities
B. Report as a cash outflow from investing activities
C. Deduct from net income to calculate net cash provided by operating activities
D. Add to net income to calculate net cash provided by operating activities
3. Golden Co. is preparing its Y1 statement of cash flows. During Y1, Golden has
cash inflows of $30,000 from held-to-maturity securities related transactions. Golden
also
has
cash
inflows
of
$26,000
from
available-for-sale
securities
related
transactions. In its Y1 statement of cash flows, Golden Co. should report net cash
from investing activities with an amount of ______.
A.
$0
B.
$26,000
C.
$30,000
D.
$56,000
4. Which of the following is a nonfinancial performance measure?
A. Customer retention ratio.
IMPORTANT
:
1.
The exam consists of 20 MCQ problems. Make sure that you have a complete
exam.
2.
To receive credit for your answers on the problems you must show and clearly
label all of your computations. Your grade will be influenced by the orderliness and
clarity of your answers.
3.
When you finish the exam, please turn it in to the teacher.
UOG-Corporate Finance
B. Return on asset.
C. Net profit margin.
D. Economic value-added.
5. Star Co. is a retail store specializing in contemporary furniture. The following
information is taken from Star's June budget:
Sales $540,000
Cost of goods sold 300,000
Merchandise inventory–June 1 150,000
Merchandise inventory–June 30 180,000
Accounts payable for purchases–June 1 85,000
Accounts payable for purchases–June 30 75,000
What amount should Star budget for cash disbursements for June purchases?
A. $260,000
B. $280,000
C. $320,000
D. $340,000
6. The essence of responsibility accounting is
A. Developing performance reports emphasizing costs and revenues that managers
can control.
B. Allocating service department costs to production departments so that production
department managers know all costs for which they are responsible.
C. Determining who is to blame for unfavorable variances.
D. Investigating all variances, regardless of their status as favorable or unfavorable.
7.As part of the annual budgeting process, Fair Theatre Company compiled
the following information for its next play production:
Fixed expenses
$48,000
Variable expenses
$10 per ticket
Ticket price
$16
How many tickets would Fair need to sell for the play's run to obtain a $24,000 profit?
UOG-Corporate Finance
A. 4,500
B. 7,200
C. 8,000
D. 12,000
8. An increase in the federal debt may create inflationary pressures for which of the
following reasons?
A. Businesses may have difficulty raising investment capital.
B. The government may need to cut spending.
C. Lenders may charge higher interest rates.
D. The economy's money supply may increase.
9. Which of the following quantitative factors, when compared to its industry average,
could be an indicator of potential corporate failure?
A. High cash flow to total liabilities
B. High retained earnings to total assets
C. High fixed cost to total cost structure
D. High fixed assets to non-current liabilities
10. According to the COSO Enterprise Risk Management Framework, each of the
following is considered by management as part of a risk assessment, except
A. Inherent risk.
B. Unknown risk.
C. Actual residual risk.
D. Target residual risk.
11. A manufacturer actively monitors a foreign country's political events whenever a
supply chain disruption occurs within the country that exceeds 90 days. According to
the COSO Enterprise Risk Management principles, the manufacturer is following
which of the following risk-response strategies?
A. Share.
B. Avoid.
C. Accept.
D. Reduce.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
UOG-Corporate Finance
12. According to the COSO Enterprise Risk Management Framework, uncertainty in
enterprise risk management refers to
A. The impact of events or the time it would take to recover.
B. The state of not knowing how or if potential events may manifest.
C. The possibility that events will occur and affect the achievement of objectives.
D. The boundaries of acceptable variation in performance related to achieving
business objectives.
13. A company has the following financial information:
Net operating profit after taxes $18,000
Capital expenditures 10,000
Depreciation expense 8,000
Change in working capital 4,000
What amount is the company's free cash flow?
A. $4,000
B. $8,000
C. $12,000
D. $16,000
14. Under which of the following circumstances does substantial doubt exist about an
entity's ability to continue as a going concern?
A. The entity is not in compliance with statutory capital requirements.
B. The entity's CFO has retired, and there is no definitive succession plan in place.
C. The entity projects that it will have negative cash flows from operating activities
over the next 12 months.
D. It is probable that the entity will be unable to meet its obligations coming due within
12 months of financial statement issuance.
15. The following is information about three companies:
ABC Co.
XYZ Co.
KLM Co.
Total assets
$109,000
$450,000
$850,000
Total liabilities
44,000
150,000
450,000
Total equity
65,000
300,000
400,000
Which company would be considered least risky from a creditor’s viewpoint?
A. KLM, because the debt ratio is the highest.
B. ABC, because the debt ratio is average.
C. XYZ, because the debt ratio is the lowest.
UOG-Corporate Finance
D. XYZ, because the debt ratio is the highest.
16. A corporation declared a 10% stock dividend on 15,000 shares outstanding of $5
par common stock when the fair value was $10 per share. Which change in the
corporation's stockholders' equity accounts is correct?
A. Retained earnings is decreased by $15,000.
B. Additional paid-in-capital is increased by $15,000.
C. Common stock is decreased by $7,500.
D. Common stock is increased by $15,000.
17. With respect to litigation involving a nonissuer that could give rise to a risk of
material misstatement, an auditor should obtain audit evidence relevant to each of the
following matters, except
A. The period in which the underlying cause for legal action occurred.
B. The amount or range of potential loss resulting from the litigation.
C. The degree of probability of an unfavorable outcome.
D. The objectivity and experience of the entity's legal counsel.
18. An overall response to address a high assessed risk of material misstatement at
the financial statement level of a nonissuer may include
A. Increasing reliance on results of internal control testing.
B. Emphasizing the need for more accounting staff.
C. Incorporating additional predictability into the selection of procedures.
D. Providing more supervision of the audit team
19. Marble Co. prepared its statement of cash flows using the following amounts
Net decrease in fixed assets $ (3,750)
Depreciation expense 13,000
Gain on sale of equipment, (net book value, $3,250) 1,250
Capital expenditures 12,500
Marble reported net income of $20,000 at year end. What amount should Marble
report as net cash provided by operating activities?
A. $19,500
B. $29,250
UOG-Corporate Finance
C. $31,750
D. $33,000
20. Glass Co. had net income of $70,000 during the year. Depreciation expense was
$10,000. The following information is available:
Accounts receivable increase $20,000
Equipment gain on sale (sale price $100,000) 10,000 increase
Nontrade notes payable increase 50,000
Equipment purchases 40,000 increase
Accounts payable increase 30,000
What amount should Glass report as net cash provided by investing activities in its
statement of cash flows for the year?
A. $(40,000)
B. $10,000
C. $50,000
D. $60,000
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Documents
Related Questions
Answer only please. Answer all parts of question please.
arrow_forward
Please help me
arrow_forward
vishu
Subject-Accounting
arrow_forward
Write an X in the appropriate column to show whether each of the following cash flows should be classified as an operating, investing, or financing. Also, indicate whether it represents a cash inflow or outflow. You may copy/paste the table below into your submission box. Cash Flow Operating Investing Financinga. Received cash from issuance of common stock ________ ________ ________ b. Net Income ________ ________ ________ c. Received cash from sale of used equipment ________ ________ ________ d. Paid cash dividends ________ ________ ________ e. Paid cash to settle a note payable ________ ________ ________ f. Paid cash to purchase new computer ________ ________ ________ g. Paid cash to pay…
arrow_forward
Hh1.
Account
arrow_forward
Which of the following shows how incurring cash expenses will affect a company's financial statements?
A.
B.
C.
D.
Assets
T
1
Balance sheet
= Liabilities +
ΝΑ
+
ΝΑ
+
ΝΑ
ΝΑ
=
=
=
=
+
+
Equity
+
-
Rev.
ΝΑ
ΝΑ
ΝΑ
ΝΑ
Income Statement
1
-
-
-
Exp.
+
+
+
+
=
=
=
=
=
Net Inc.
+
-
Statement of
Cash Flows
OA
OA
OA
FA
-
-
-
-
arrow_forward
When preparing the operating section of the cash flow statement using the indirect method, which of the
following financial statements or sections in the financial statement are used?
O Long-term liabilities and stockholders' equity from the balance sheet.
O Long-term assets from the balance sheet.
O Income statement plus long-term assets from the balance sheet.
O Income statement plus current assets and current liabilities from the balance sheet.
ASUS
f4
f5
f6
f7
[X
f8
f9
f10
f11
%24
&
4.
5
7
Y
G
H.
因
6
近
F.
图
arrow_forward
Answer full question.
arrow_forward
204.
Subject :- Accounting
arrow_forward
Which of the following shows how paying cash to purchase suppites will affect a company's financial statements?
Multiple Choice
Assets
Assets
Balance Sheet
Llab, +
NA
Assets
Balance Sheet
Liab. + Equity
NA
Balance Sheet
Assets - Llab
-10
NA
Equity
NA
Balance Sheet
Llab.
NA
Equity
NA
Equity
Rev
NA
Rev.
NA
Rev
NA
Rev.
NA
Income Statement
Exp
NA
Net Inc.
NA
Income Statement
- Exp.
Net Inc.
Income Statement
Exp
NA
-Net Inc.
NA
Income Statement
Exp
NA
Net Inc.
NA
Statement of
Cash Flows
- OA
Statement of
Cash Flows
NA
Statement of
Cash Flows
NA
Statement of
Cash Flows
arrow_forward
On the statement of cash flows, the investing activities section would include
a. cash paid for dividends
Ob. cash paid for retirement of bonds payable
Oc. cash received from the issuance of capital stock
Od. cash received from the sale of investments
arrow_forward
Question Content Area
On the statement of cash flows, the financing activities section would include all of the following except
a. cash paid for dividends
b. cash received from the sale of bonds payable
c. cash paid for the purchase of treasury stock
d. cash paid for the interest on bonds payable
arrow_forward
Write an X in the appropriate column to show whether each of the following cash flows should be classified as an operating, investing, or financing. Also, indicate whether it represents a cash inflow or outflow. Cash Flow Operating Investing Financinga. Received cash from issuance of common stock __ __ __b. Net Income __ __ __c. Received cash from sale of used equipment __ __ __ d. Paid cash dividends __ __ __e. Paid cash to settle a note payable __ __ __f. Paid cash to purchase new computer __ __ __g. Paid cash to pay inventories __ __ __h. Received cash from issuance of bonds payable __ __ __i. Received cash from sale of investment __ __ __j. Paid cash to repurchase stocks __ __ __
arrow_forward
View Policies
Current Attempt in Progress
The following information is available for Ivanhoe Company for the year ended December 31, 2022.
Beginning cash balance
Accounts payable decrease
Depreciation expense
Accounts receivable increase
Inventory increase
Net income
Cash received for sale of land at book value
Cash dividends paid
Income taxes payable increase
Cash used to purchase building
Cash used to purchase treasury stock
Cash received from issuing bonds
Cash Flows from Operating Activities
Net Income
$78,750
Adjustments to reconcile net income to
6,475
Net Cash Provided by Operating Activities
283,500
14,350
19,250
497,175
61,250
21,000
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g.-15
parenthesis e.g. (15,000).)
8,225
505,750
45,500
Ivanhoe Company
Statement of Cash Flows-Indirect Method
For the Year Ended December 31, 2022
350,000
MacBook Air
arrow_forward
Please do not give solution in image format thanku
arrow_forward
Please help me with all answers thanku
arrow_forward
Classifying Items in the Statement of Cash Flows
The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement.
(a)
(b)
1. Payments of short-term debt.
Answer
Answer
2. Repurchases of common stock.
Answer
Answer
3. Purchases of property and equipment.
Answer
Answer
4. Sale of investments classified as long-term.
Answer
Answer
5. Proceeds from the issuance of common stock.
Answer
Answer
6. Increase in prepaid expenses and other current assets.
Answer
Answer
7. Acquisition for cash of a competitor.
Answer
Answer
8. Increase in current income tax payable.
Answer
Answer
9. Decrease in accounts payable.
Answer
Answer
10. Dividends paid to stockholders.
Answer
Answer
11.…
arrow_forward
Place an X' in the appropriate columns for each of the following situations to indicate how
amounts are classified and how or whether cash is affected:
Operating Investing Financing
Activity
Effect on Cash
Outflow
Situation
Inflow
No
Activity
Activity
(-)
Effect
a. Paying off accounts
payable with cash.
b. Retirement of common
stock with cash.
c. Issuance of bonds for
cash.
d. Acquired land by issuing
common stock.
e. Paid cash for inventory.
f. Collection of accounts
receivable with customer
cash.
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Related Questions
- Write an X in the appropriate column to show whether each of the following cash flows should be classified as an operating, investing, or financing. Also, indicate whether it represents a cash inflow or outflow. You may copy/paste the table below into your submission box. Cash Flow Operating Investing Financinga. Received cash from issuance of common stock ________ ________ ________ b. Net Income ________ ________ ________ c. Received cash from sale of used equipment ________ ________ ________ d. Paid cash dividends ________ ________ ________ e. Paid cash to settle a note payable ________ ________ ________ f. Paid cash to purchase new computer ________ ________ ________ g. Paid cash to pay…arrow_forwardHh1. Accountarrow_forwardWhich of the following shows how incurring cash expenses will affect a company's financial statements? A. B. C. D. Assets T 1 Balance sheet = Liabilities + ΝΑ + ΝΑ + ΝΑ ΝΑ = = = = + + Equity + - Rev. ΝΑ ΝΑ ΝΑ ΝΑ Income Statement 1 - - - Exp. + + + + = = = = = Net Inc. + - Statement of Cash Flows OA OA OA FA - - - -arrow_forward
- When preparing the operating section of the cash flow statement using the indirect method, which of the following financial statements or sections in the financial statement are used? O Long-term liabilities and stockholders' equity from the balance sheet. O Long-term assets from the balance sheet. O Income statement plus long-term assets from the balance sheet. O Income statement plus current assets and current liabilities from the balance sheet. ASUS f4 f5 f6 f7 [X f8 f9 f10 f11 %24 & 4. 5 7 Y G H. 因 6 近 F. 图arrow_forwardAnswer full question.arrow_forward204. Subject :- Accountingarrow_forward
- Which of the following shows how paying cash to purchase suppites will affect a company's financial statements? Multiple Choice Assets Assets Balance Sheet Llab, + NA Assets Balance Sheet Liab. + Equity NA Balance Sheet Assets - Llab -10 NA Equity NA Balance Sheet Llab. NA Equity NA Equity Rev NA Rev. NA Rev NA Rev. NA Income Statement Exp NA Net Inc. NA Income Statement - Exp. Net Inc. Income Statement Exp NA -Net Inc. NA Income Statement Exp NA Net Inc. NA Statement of Cash Flows - OA Statement of Cash Flows NA Statement of Cash Flows NA Statement of Cash Flowsarrow_forwardOn the statement of cash flows, the investing activities section would include a. cash paid for dividends Ob. cash paid for retirement of bonds payable Oc. cash received from the issuance of capital stock Od. cash received from the sale of investmentsarrow_forwardQuestion Content Area On the statement of cash flows, the financing activities section would include all of the following except a. cash paid for dividends b. cash received from the sale of bonds payable c. cash paid for the purchase of treasury stock d. cash paid for the interest on bonds payablearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College