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Finance & Accounting Assignment (solution)

   

Added on  2021-04-24

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Running head: FINANCE & ACCOUNTINGFinance & AccountingName of the Student:Name of the University:Author’s Note:

1FINANCE & ACCOUNTINGMidterm EXAM By definition, shareholders' equity is:A.net working capital plus total assets.B.total assets plus total liabilities.C.net fixed assets minus total liabilities.D.fixed assets minus long-term debt plus net working capital.Which of the following will result in higher owners' equity, all else equal?A.increase in accounts receivableB.decrease in net working capitalC.increase in accounts payableD.decrease in inventoryOperating cash flow is defined as:A.the change in the net working capital over a stated period of time.B.a firm's net profit over a specified period of time.C.a firm's operating margin.D.the cash that a firm generates from its normal business activities.Financial leverage:A.is the ratio of a firm's revenues to its fixed expenses.B.is inversely related to the level of debt.Cis equal to the market value of a firm divided by the

2FINANCE & ACCOUNTING.firm's book value.D.increases the potential return to the shareholders.Which one of the following statements is correct concerning a firm's fixed assets?A.The market value is affected by the accounting method selected.B.The book value is equal to the market value minus the accumulated depreciation.C.The market value is the expected selling price in today's economy.D.The market value is equal to the initial cost minus the depreciation to date.The recognition principle states that:A.costs should be recorded on the income statement whenever those costs can be reliably determined.B.sales should be recorded when the payment for that sale is received.C.sales should be recorded when the earnings process is virtually completed and the value of the sale can be determined.D.costs should be recorded when paid.Morgantown Movers has net working capital of $11,300, current assets of $31,200, equity of $53,400, and long-term debt of $11,600. What is the amount of the net fixed assets?A.$45,500B.$48,100C.$53,700D.$32,900

3FINANCE & ACCOUNTING8) Red Roofs, Inc. has current liabilities of $24,300 and accounts receivable of $7,800. The firmhas total assets of $43,100 and net fixed assets of $23,700. The owners' equity has a book value of $21,400. What is the amount of the net working capital?A.$6,500B.$5,100C.-$4,900D.$18,8009) The Plaza Cafe has an operating cash flow of $78,460, depreciation expense of $8,960, and taxes paid of $21,590. A partial listing of its balance sheet accounts is as follows:Beginning Balance Ending Balance Current assets $141,680 $138,509 Net fixed assets $687,810 $703,411 Current liabilities $87,340 $91,516 Long-term debt $267,000 $248,000 What is the amount of the cash flow from assets?A.$63,909B.$61,487C.$61,246D.$58,91310) Six months ago, Benders Gym repurchased $20,000 of its common stock. The company pays regular quarterly dividends totaling $8,500 per quarter. What is the amount of the cash flowto stockholders for the past year if no additional shares were issued?A.$30,000B$20,0

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