Exam 3: Understanding Financial Statements and Cash Flows

Please refer to Table 3-1 for the following questions. Table 3-1 Jones Company Financial Information -Based on the information in Table 3-1,the change in cash for 2010 is

International Financial Reporting Standards (IFRS)is a set of principle-based accounting standards that were established by the International Accounting Standards Board (IASB).

A company borrows $2,000,000 and uses the money to purchase high technology machinery for its operations.These are examples of

An income statement reports a firm's cumulative revenues and expenses from the inception of the firm through the income statement date.

A firm's income statement reports the results from operating the business for a period of time,while the firm's balance sheet provides a snapshot of the firm's financial position at a specific point in time.

Which of the following statements about International Financial Reporting Standards (IFRS)is NOT true?

Use the following information to calculate the company's accounting net income for the year.

The Colorado Jet Boat Company had a cash balance of $3 million at the beginning of 2010.During 2010,Sales were $8 million and expenses were $7 million.Therefore

Common-sized income statements restate the numbers in the income statement as a percentage of sales to assist in the comparison of a firm's financial performance across time and with competitors.

Table 3-3 Marlett Company Financial Information Based on the information in Table 3-3,prepare a statement of cash flows for 2010.Assume that there were no changes in any other asset or liability accounts,and that the ending cash balance for 2009 was $100.

It is possible for two companies to have the same financial performance,but their financial statements can be different,depending on how and when the managers choose to report certain transactions.

Examples of uses of cash include

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 gross profit is equal to

Net working capital is equal to

Siskiyou Corp.has cash of $75,000; short-term notes payable of $100,000; accounts receivables of $275,000; accounts payable of $135,000: inventories of $350,000; and accrued expenses of $75,000.What is the firm's net working capital?

Please refer to Table 3-1 for the following questions. Table 3-1 Jones Company Financial Information -Based on the information in Table 3-1,assuming that no assets were disposed of during 2010,the amount of depreciation expense was

Which of the following accounts belongs in the equity section of a balance sheet?

Accounting rules specify that assets on the balance sheet must be reported at current market value,because this is the valuation most useful to potential investors.

If a company's cash balance increases during the year,and the company also reports positive net income,then the company's retained earnings balance must increase.

Prepare an income statement using the information given below.Make sure to identify gross profit,operating income,and net income.