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Exam 5: Communicating and Interpreting Accounting Information

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Question 51

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The Callie Company has provided the following information: Operating expenses were $231,000; Cost of goods sold was $376,000; Net sales were $940,000; Interest expense was $32,000; Gain on sale of a building was $76,000; Income tax expense was $151,000. What was Callie's income from operations?

A) $333,000
B) $188,000
C) $156,000
D) $232,000

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Question 52

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Additional-paid in capital is reported on the balance sheet as a component of shareholders' equity.

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Question 53

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Marino Company has provided the following information: Net sales,$480,000 Net income,$24,000 Average total assets,$200,000 What is Marino's net profit margin ratio?

Which of the following tasks does the Securities & Exchange Commission (SEC) not perform?

Which of the following would not typically be disclosed in the notes to the financial statements?

The form 10-K is the annual report that publically traded companies must file with the Securities & Exchange Commission (SEC).

Intangible assets are reported on the balance sheet as a current asset.

Which of the following is not true about the board of directors?

The following data were taken from the adjusted trial balance of Kent Corporation. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Kent Corporation $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Adjusted Trial Balance Data $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ December 31,2011 $\begin{array} { l r } \text { Accounts Payable } & \$ 12,000 \\ \text { Accounts Receivable } & 13,000 \\ \text { Accumulated Depreciation-Building } & 6,000 \\ \text { Accumulated Depreciation-Furniture \& Fixtures } & 9,000 \\ \text { Building } & 60,000 \\ \text { Capital Stock } & 40,000 \\ \text { Cash } & 24,000 \\ \text { Copyrights } & 22,000 \\ \text { Dividends Declared } & 12,000 \\ \text { Furniture \& Fixtures } & 15,000 \\ \text { Land } & 25,000 \\ \text { Note Payable (10\%, due in 5 years) } & 40,000 \\ \text { Office Supplies } & 1,000 \\ \text { Prepaid Insurance } & 3,000 \\ \text { Retained Earnings (January 1, 2011) } & 23,000 \\ \text { Salaries Payable } & 2,000 \\ \text { Service Revenue } & 85,000 \\ \text { Salaries Expense } & 28,000 \\ \text { Utilities Expense } & 2,000 \\ \text { Depreciation Expense } & 5,000 \\ \text { Insurance Expense } & 2,000 \\ \text { Office Supplies Expense } & 1,000 \\ \text { Interest Expense } & 4,000 \end{array}$ Required: Prepare a classified balance sheet in good form at December 31,2011.(Ignore income taxes).

Which of the following would not be included on an income statement?

Huron has provided the following year-end balances: Cash,$25,000 Patents,$7,900 Accounts receivable,$9,300 Property,plant,and equipment,$98,700 Prepaid insurance,$3,600 Accumulated depreciation,$10,000 Inventory,$37,000 Trademarks,$12,600 Goodwill,$11,000 How much are Huron's net noncurrent assets?

The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $215,000; Net sales were $1,100,000; Interest expense was $71,000; Discontinued operations loss was $87,000; Income tax expense was $58,000. What was Willie's income before taxes?

Twin Lakes,Inc.reported the following December 31 amounts in its financial statements: $\begin{array} { l r r } & 2011 & 2010 \\\text { Sales revenue } & \$ 250.0 & \$ 210.0 \\\text { Gross profit } & 75.0 & 68.0 \\\text { Net income } & 28.0 & 21.0 \\\text { Total assets } & 90.0 & 80.0 \\\text { Total stockholders' equity } & 40.0 & 36.0\end{array}$ Compute the following for the 2011: A.Net profit margin B.Asset turnover C.Return on assets

The Public Company Accounting Oversight Board (PCAOB)sets auditing standards for independent auditors.

The Callie Company has provided the following information: Operating expenses were $231,000; Cost of goods sold was $376,000; Net sales were $940,000; Interest expense was $32,000; Gain on sale of a building was $76,000; Income tax expense was $151,000. What was Callie's gross profit?

Which of the following statements is true?

Which of the following statements regarding international financial reporting standards (IFRS) is false?

Which of the following statements is true?

Which of the following is not reported as an operating expense on the income statement?

FocusMore,Inc.,had the following alphabetical list of accounts taken from its adjusted trial balance at December 31,2011: $\begin{array} { l r } \text { Accounts Payable } & \$ 15,000 \\\text { Accounts Receivable } & 18,000 \\\text { Accumulated Depreciation-Building } & 26,200 \\\text { Advertising Expense } & 12,800 \\\text { Building } & 100,000 \\\text { Common Stock } & 60,000 \\\text { Cash } & 15,000 \\\text { Cost of Goods Sold } & 56,500 \\\text { Depreciation Expense } & 2,000 \\\text { Insurance Expense } & 3,800 \\\text { Insurance Payable } & 1,900 \\\text { Inventory } & 25,000 \\\text { Land } & 30,000 \\\text { Prepaid Insurance } & 4,600 \\\text { Interest Revenue } & 2,500 \\\text { Retained Earnings (Jan. 1, 2011) } & 58,000 \\\text { Salaries Expense } & 48,000 \\\text { Salaries Payable } & 4,600 \\\text { Sales } & 150,000 \\\text { Supplies Inventory } & 1,200 \\\text { Supplies Expense } & 2,000 \\\text { Unearned Rent Revenue } & 700\end{array}$ Required: Prepare a multiple step income statement for 2011.(Include gross profit,but ignore income taxes.)