Exam 3: The Balance Sheet and Financial Disclosures

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken. -

An example of an error would be:

New Oaks Winery requires two months to make wine, two years to age it, one month to bottle it, two months to sell it, and one month to collect the receivable. Its operating cycle is:

As controller for Henderson, you are attempting to reconstruct and revise the following balance sheet prepared by a staff accountant. Additional information ($ in 000s): 1. Certain records that included the account balances for the franchise and shareholders' equity items were lost. However, a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.5. That is, total liabilities are 150% of total shareholders' equity. Retained earnings at the beginning of the year was $4,300. Net income for 2018 was $2,500, and $800 in cash dividends were declared and paid to shareholders. 2. The investments represent treasury bills purchased in December 2018 that mature in January 2019. These are considered cash equivalents. 3. Interest on both the note and the bonds is payable annually. 4. The note payable is due in annual installments of $800 each. 5. Deferred revenue will be recognized equally over the next 18 months. 6. The common stock represents 500,000 shares of no par stock authorized, 300,000 shares issued and outstanding. Required: Prepare a complete, corrected, classified balance sheet.

Bronco Electronics' current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement: Required: Compute the following for Bronco: -Shareholders' equity

Payment terms, interest rates, and other details of long-term liabilities usually are reported in disclosure notes.

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Current assets

Listed below are ten terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Retained earnings

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken. -

The principal concern with accounting for related-party transactions is:

Notes payable that are due in two years are:

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken. -

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Intangible asset

A company that borrows funds at 6% and then generates a return on those funds of 9% typically has:

Balance sheets prepared under IFRS often report long-term items before current items.

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2018: What amount should be included in the current liabilities section of Janson's December 31, 2018, balance sheet?

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken. -

Recent financial statement data for Harmony Health Foods (HHF) Inc. is shown below. - HHF's debt to equity ratio is (Round your answer to two decimal places.):

Intangible assets usually are reported in the balance sheet as current assets.

An example of vertical analysis would be comparing inventory this year to inventory last year to calculate the percentage change in inventory.