Exam 3: Understanding Financial Statements and Cash Flows

California Retailing Inc.has sales of $4,000,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000.The firm's interest expense is $250,000,and the corporate tax rate is 40%.The firm paid dividends to preferred stockholders of $40,000,and the firm distributed $60,000 in dividend payments to common stockholders.What is California Retailing's "Addition to Retained Earnings"?

California Retailing Inc.has sales of $4,000,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000.The firm's interest expense is $250,000,and the corporate tax rate is 40%.What is California Retailing's net income?

The balance sheet reflects the accounting equation: Assets = Liabilities + Owners' Equity.

Financing activities have no impact on the income statement,but rather are reflected in changes in long-term debt and short-term debt on the balance sheet.

A firm's financing costs include

Which of the following best describes cash flow from financing activities?

Which of the following accounts does NOT belong in the equity section of a balance sheet?

What information does a firm's statement of cash flows provide to the viewing public?

Corporation B reported earnings per share of $10.Corporation B has 100,000 shares of common stock outstanding and reported an increase in owners equity of $400,000 for the period.Corporation B paid $50,000 in interest expense during the period.Corporation B paid dividends per share of

Earnings available to common shareholders represents income that may be reinvested in the firm or distributed to its owners.

A balance sheet is a statement of the financial position of the firm on a given date,including its asset holdings,liabilities,and equity.

All of the following are income statement items EXCEPT

Which of the following statements concerning net income is MOST correct?

An income statement may be represented as follows:

The two principal sources of financing for corporations are

A corporation's operating profit margin is equal to

Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000; Rogue's operating profit margin is equal to

The accounting book value of an asset represents the historical cost of the asset rather than its current market value or replacement cost.

The retained earnings balance on IBM's balance sheet at the end of 2010 is equal to IBM's 2010 net income minus dividends paid in 2010.

Which of the following represents an attempt to measure the net results of the firm's operations (revenues versus expenses)over a given time period?