Question

QUESTION 1

1. Select the Sources of Funds that would be included on the Statement of Cash Flows.

   		Increase in Bank Notes
   		Decrease in Bank Notes
   		Net Income
   		Increase in Accounts Payable
   		Increase in Investments
   		Depreciation
   		Decrease in Investments
   		Capital Expenditures

1. Calculate the Ending Cash Balance given the following information:

   Beginning Cash Balance (1/1/XX): $20,000

   Sources of Funds: $15,000

   Uses of Funds: $25,000

   Ending Cash Balance: ?

QUESTION 3

1. Dallas Company had NET sales of $1,000,000 for the year, cost of goods sold of $500,000, and interest expense of $100,000 for last year. What is the Gross Profit if sales were $500,000 for the current year if the relationships remain the same?

QUESTION 4

1. Calculate the change in retained earnings given the following information:

   Net Income : $256,000

   Cash Dividends: $156,000

QUESTION 5

1. A 5 year fixed asset was purchased on Jan 1 of Year 1 and immediately placed into service. The cost was $750,000 and had no salvage value. What is the Net Book Value at the end of year 5 using straight line depreciation?

QUESTION 6

1. The difference between revenues achieved and expenses incurred is:

   		Net Income Before Tax
   		Net Income
   		Net Loss
   		Gross Margin

QUESTION 7

1. Revenue is always the same as receiving the cash for products and services.

   True

   False

QUESTION 8

1. What is the portion of prior capital expenditures that has been allocated to the current year and is recorded?

   		Depreciation Expense
   		Cost of Goods Sold
   		Cash Dividends
   		Federal Income Tax

  

QUESTION 9

1. The income statement account that states the cost of purchasing goods that are sold to a customer?

   		Cost of Goods Sold
   		Revenue
   		Gross Margin
   		Fixed Cost

  

QUESTION 10

1. Cash flow can be impaired by slowing down payments to suppliers.

   True

   False

QUESTION 11

1. What causes a decrease in Accounts Receivable?

   		Customer purchase items on Credit
   		Payments from customers on prior purchase
   		Customers purchase items with Cash
   		Company spending cash on Inventory

QUESTION 12

1. Short term debt is debt a company owes that is due within 1 year.

   True

   False

QUESTION 13

1. Discuss in detail how the Statement of Cashflows, Income Statement, and Balance Sheet all flow to each other. Fore example, be detailed about from the moment an entity purchases a product using cash to the moment they record a transfer to stock holders equity. Describe using Accounts payable, receivables, COGS, Net Income, etc.

Answer 1

1) Sources of Funds

• Increase in Bank Notes
• Net Income
• Increase in Accounts Payable
• Decrease in Investments

2)

Beginning Cash Balance	$   20,000.00
Sources of Funds	$   15,000.00
Uses of Funds	$ (25,000.00)
Ending Cash Balance	$   10,000.00

3) Gross Profit For 500,000 Sales= 500,000 *50% =250,000

4) Change in Retained Earnings = 256,000 -156,000 = 100,000

5)Nil

6)Net Income

7) False

8)Depreciation Expense

9)Cost of Goods Sold

10)False

11)Payments from customers on prior purchase

12)True