Exam 2: A Further Look at Financial Statements

The most important information needed to determine if companies can pay their current obligations is the

The relationship between current assets and current liabilities is important in evaluating a company's

The assumption that requires only those things that can be expressed in money are included in the accounting records is the

The ability of a business to pay obligations that are expected to become due within the next year or operating cycle is

The debt to assets ratio is a

The excess of current assets over current liabilities is called working capital.

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

The economic entity assumption is that a company will remain in operations for the foreseeable future.

Based on the following data, what is the amount of working capital? Accounts payable. \6 4,000 Accounts receivable 114,000 Cash 70,000 Intangible assets 100,000 Inventory. 138,000 Long-term investments 160,000 Long-term liabilities 200,000 Short-term investments. 80,000 Notes payable (short-term) 56,000 Property, plant, and equipment 1,340,000 Prepaid insurance 2,000

Trademarks would appear in which balance sheet section?

The advantage of accounting information is that it provides exact and completely reliable measures.

Cash and supplies are both classified as current assets.

The periodicity assumption states

A useful measure of solvency is the

The two fundamental qualities of useful information are

Use the following data to determine the total dollar amount of assets to be classified as current assets. Koonce Office Supplies Balance Sheet December 31, 2017 Cash \ 195,000 Accounts payable \ 210,000 Accounts receivable 150,000 Salaries and wages payable 30,000 Inventory 165,000 Mortgage payable 240,000 Prepaid insurance 90,000 Total liabilities \ 480,000 Stock investments 255,000 Land 270,000 Buildings \ 315,000 Common stock \3 60,000 Less: Accumulated Retained earnings 750,000 depreciation (60,000) 255,000 Total stockholders' equity \1 ,110,000 Trademarks 210,000 Total liabilities and Total assets \ 1,590,000 stockholders' equity \1 ,590,000

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at

Using the following balance sheet and income statement data, what is the total amount of working capital? Current assets \ 32,000 Net income \ 42,000 Current liabilities 16,000 Stockholders' equity 78,000 Average assets 160,000 Total liabilities 42,000 Total assets 120,000 Average common shares outstanding was 15,000.

Kingery Corporation has current assets of $1,800,000 and current liabilities of $750,000. If they issue $150,000 of new stock what will their new current ratio be? (rounded)