Exam 5: Financial Position and Cash Flows

Which of the following is NOT a current liability?

Earnings quality An analysis of the financial statements of Scion Inc. shows that net income is significantly higher than cash flows from operations. What does this indicate about the quality of Scion's earnings? Where else can analysts look for further information?

Ratios that measure the degree of protection for long-term creditors and investors or the ability to meet long-term obligations are called

The financial statement which summarizes operating, investing, and financing activities of an entity for a period of time is the

Which of the following is NOT a method of disclosing additional information in the financial statements?

Cash flows from operating activities – indirect method Carla Limited had the following financial statements: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Carla Limited. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Statement of Financial Position $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ As at December 31 Cash Accounts receivable Inventories Prepaid insurance Equipment Accumulated depreciation-equipment Total assets Accounts payable Wages payable Income taxes payable Long-term note payable Common shares Retained earnings Total liabilities and shareholders' equity \ 15,000 11,750 16,500 2,500 25,500 \ 5,000 2,000 3,000 0 15,000 \ 9,750 8,750 11,750 2,000 33,500 \ 6,750 2,000 1,000 8,750 15,000 Additional information: •Equipment that cost $8,000 was sold for the carrying amount of $3,750. •Dividends declared and paid were $10,000. Prepare the operating activities section of a statement of cash flows using the indirect method.

Statement of cash flows - direct method Carla Limited had the following financial statements: Additional information: -Equipment that cost $8,000 was sold for its carrying amount of $3,750. -Dividends declared and paid were $10,000. Prepare the statement of cash flows using the direct method.

Which of the following statements about IFRS and ASPE accounting and reporting requirements for the statement of financial position is NOT correct?

Which of the following statements about intangible assets is INCORRECT?

Account classification Although the statement of financial position can be classified and presented in several ways, the major subdivisions noted in Illustration 5.1 tend to be closely followed. Explain how following these classifications contributes to the financial statement objectives of representational faithfulness and transparency.

Working capital is

On January 1, 2020, Neptune Inc. leased a building to Saturn Corp. for a ten-year term at an annual rental of $200,000. At inception of the lease, Neptune received $800,000, which covered the first two years rent of $400,000 and a security deposit of $400,000. This deposit will not be returned to Saturn upon expiration of the lease, but will be applied to payment of rent for the last two years of the lease. What portion of the $800,000 should be shown as a current and long-term liability in Neptune's December 31, 2020 statement of financial position? Current Liability Lone-term Liability a) \ 0 \ 800,000 b) \ 200,000 \ 400,000 c) \ 400,000 \ 400,000 d) \ 400,000 \ 200,000

Non-monetary assets

Significant accounting policies may NOT be

Preparing a statement of cash flows under the INDIRECT method involves all of the following EXCEPT determining the

Maggins Inc. gives you the following information pertaining to the year 2020: Net sales............................................................ \8 80,000 Cost of goods sold.............................................. 550,000 Current assets.................................................... 525,000 Current liabilities.............................................. 262,500 Average total assets........................................... 950,000 Total liabilities.................................................. 577,500 Net income....................................................... 165,000 The asset turnover ratio of Maggins Inc. is

An enterprise's ability to pay its debts and related interest is called

Significant changes to the presentation of financial statements (Primary Financial Statements Project) are currently being developed by the IASB. Which of the following best describes the focus of the changes?

Which of the following statements best describes a liability?

Calculation of free cash flow and ratio Dawe Corporation reports the following information: Net cash provided by operating activities............................. \2 85,000 Average current liabilities..................................................... 150,000 Average long-term liabilities................................................. 100,000 Dividends declared................................................................. 60,000 Capital expenditures.............................................................. 110,000 Payments of debt.................................................................. 35,000 Instructions Calculate the following: a) Cash Debt Coverage Ratio b) Free Cash Flow