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1. Nevada Boot Co. reported net income of $216,000 for its year ended December 31, 2018. Purchases totaled $152,000. Accounts payable balances at the beginning and end of the year were $36,000 and...

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1.   Nevada Boot Co. reported net income of $216,000 for its year ended December 31, 2018. Purchases totaled $152,000. Accounts payable balances at the beginning and end of the year were $36,000 and $33,000, respectively. Beginning and ending inventory balances were $44,000 and $46,000, respectively. Assuming that all relevant information has been presented, Nevada Boot would report operating cash flows of
    
    
    
    
    
    
    
    
    
    
    A. $211,000.
    B. $151,000.
    C. $221,000.
    D. $155,000.
    
    
    
    
    
    
    
    
    
    2.   Present and future value tables of $1 at 3% are presented below:
    N
    FV $1
    PV $1
    FVA $1
    PVA $1
    FVAD $1
    PVAD $1
    1
     XXXXXXXXXX
    0.97087
    1.0000
    0.97087
    1.0300
    1.00000
    2
    1.06090
    0.94260
    2.0300
    1.91347
    2.0909
    1.97087
    3
    1.09273
    0.91514
    3.0909
    2.82861
    3.1836
    2.91347
    4
    1.12551
    0.88849
    4.1836
    3.71710
    4.3091
    3.82861
    5
    1.15927
    0.86261
    5.3091
    4.57971
    5.4684
    4.71710
    6
    1.19405
    0.83748
    6.4684
    5.41719
    6.6625
    5.57971
    7
    1.22987
    0.81309
    7.6625
    6.23028
    7.8923
    6.41719
    8
    1.26677
    0.78941
    8.8923
    7.01969
    9.1591
    7.23028
    9
    1.30477
    0.76642
    10.1591
    7.78611
    10.4639
    8.01969
    10
    1.34392
    0.74409
    11.4639
    8.53020
    11.8078
    8.78611
    11
    1.38423
    0.72242
    12.8078
    9.25262
    13.1920
    9.53020
    12
    1.42576
    0.70138
    14.1920
    9.95400
    14.6178
     XXXXXXXXXX
    13
    1.46853
    0.68095
    15.6178
     XXXXXXXXXX
    16.0863
     XXXXXXXXXX
    14
    1.51259
    0.66112
    17.0863
     XXXXXXXXXX
    17.5989
     XXXXXXXXXX
    15
    1.55797
    0.64186
    18.5989
     XXXXXXXXXX
    19.1569
     XXXXXXXXXX
    16
    1.60471
    0.62317
    20.1569
     XXXXXXXXXX
    20.7616
     XXXXXXXXXX
Amy wants to sell her share of an investment to Ted for $50,000 in three years. If money is worth 6% compounded semiannually, what would Amy accept today?
    
    A. $11,941
    B. $41,000
    C. $8,375
    D. $41,874
    3.   Safari Inc. offers a new employee a lump sum signing bonus at the date of employment. Alternatively, the employee can take $8,000 at the date of employment plus $20,000 at the end of each of his first three years of service. Assuming the employee's time value of money is 10% annually, what lump sum at employment date would make him indifferent between the two options?
    
    A. $57,737
    B. $62,711
    C. $23,026
    D. $8,000
    4.   Shadow Lane's income tax payable account decreased from $14 million to $12 million during 2015. If its income tax expense was $80 million, what would be shown as an operating cash flow under the direct method?
    
    A. A cash outflow of $78 million
    B. A cash outflow of $82 million
    C. A cash outflow of $12 million
    D. A cash outflow of $80 million
    5.   Sasha's Florist reported the following before-tax income statement items for the year ended December 31, 2015:
    Operating Income
    $250,000
    Extraordinary gain
    $70,000
All income statement items are subject to a 40% income tax rate. In its 2015 income statement, Sasha's separately stated income tax expense and total income tax expense would be
    
    A. $100,000 and $100,000, respectively.
    B. $128,000 and $128,000, respectively.
    C. $128,000 and $100,000, respectively.
    D. $100,000 and $128,000, respectively.
    
6.   During its 2016 fiscal year, Jacobsen Inc. reported before-tax income of $620,000. This amount does not include the following two items, both of which are considered to be material in amount:
    Unusual Gain
    $200,000
    Loss on discontinued operations
    (300,000)
The company's income tax rate is 40%.
Jacobsen Inc. prepares its financial statement applying International Financial Reporting Standards (IFRS). In its 2016 income statement, Jacobsen Inc. would report income from continuing operations of
    
    A. $492,000.
    B. $312,000.
    C. $372,000.
    D. $620,000.
    7.   Present and future value tables of $1 at 9% are presented below.
     
    PV of $1
    FV of $1
    PVA of $1
    FVAD of $1
    FVA $1
    1
    0.91743
    1.09000
    0.91743
    1.09000
    1.0000
    2
    0.84168
    1.8810
    1.75911
    2.2781
    2.0900
    3
    0.77218
    1.29503
    2.53129
    3.5731
    3.2781
    4
    0.70843
    1.41158
    3.23972
    4.9847
    4.5731
    5
    0.64993
    1.53862
    3.88965
    6.5233
    5.9847
    6
    0.59627
    1.67710
    4.45892
    8.2004
    7.5233
How much must be invested now at 9% interest to accumulate to $10,000 in five years?
    
    A. $9,176
    B. $5,500
    C. $6,499
    D. $5,960
    
8.   In 2015, Solid Construction Co. (SCC) began work on a two-year fixed price contract project. SCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions):
    Accounts receivable (from construction progress billings)
    $37.5
    Actual construction costs incu
ed in 2015
    $135
    Cash collected on project during 2015
    $105
    Construction in progress, 12/31/15
    $207
    Estimated percentage of completion during 2015
    60%
What were the construction billings by SCC during 2015?
    
    A. $37.5 million
    B. $225 million
    C. $67.5 million
    D. $142.5 million
    9.   Comprehensive income is the change in equity from
    
    A. capital transactions.
    B. nonowner transactions.
    C. owner transactions.
    D. owner or nonowner transactions.
    
10.   On October 28, 2015, Amanda Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2015, the end of the company's fiscal year. The division's loss from operations for 2015 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $3,500,000, respectively. What before-tax amount or amounts should Amanda's report as loss on discontinued operations in its 2015 income statement?
    
    A. $500,000 gain included in continuing operations and a $2,000,000 loss from discontinued operations
    B. $2,000,000 loss
    C. $2,500,000 loss
    D. None
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.   Iris Scott is an artist who sells his work under consignment (he displays his work in local ba
ershops, and customers purchase his work there). Scott recently transfe
ed a painting on consignment to a local ba
ershop. Scott most likely should recognize revenue when
    
    
    
    
    
    
    
    
    
    
    A. the ba
ershop sells the painting.
    B. he paints the painting, because the painting is produced while he works.
    C. he transfers the painting to a ba
ershop.
    D. the ba
ershop's right of return expires.
    
    
    
    
    
    
    
    
    
    12.   Excerpts from Peg Co.'s December 31, 2016 and 2015, financial statements and key ratios are presented below (all numbers are in millions):
     
    2016
    2015
    Accounts receivable (net)
    $20
    $16
    Net sales
    $115
    100
    Cost of goods sold
    $60
    55
    Net income
    $20
    17
    Inventory turnove
    5.22
     
    Return on assets
    10.3%
     
    Equity Multiple
    2.36
     
Peg Co.'s return on equity for 2018 is (rounded)
    
    A. 9%.
    B. 17.4%.
    C. 24.3%.
    D. 22%
    13.   Montana Co. began a construction project in 2015 that will provide it $150 million when it's completed in 2016. During 2015, Montana incu
ed $36 million of costs and estimates an additional $84 million of costs to complete the project. In 2016, Montana incu
ed costs of $58.5 million and estimated an additional $40.5 million in costs to complete the project. Using the percentage-of-completion method, Montana recognized a _______ on the project in 2016.
    
    A. $15 million gross profit
    B. $1.5 million gross profit
    C. $6 million gross profit
    D. $13.5 million gross profit
    14.   Tony signed up and paid $1200 for a 6-month painting course on June 1 with Master Piece Painting (MPP). As of August 1, MPP's accounting records would indicate
    
    A. $400 of revenue, $800 of accounts receivable
    B. $800 of revenue, $400 of accounts receivable
    C. $400 of revenue, $800 of defe
ed revenue
    D. $1,200 of revenue, $1,200 of cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15.   Jing Statistical Services operates a website that links experienced statisticians with businesses that need data analyzed. Statisticians post their rates, qualifications, and references on the website, and Jing receives 25% of the fee paid to the statisticians in exchange for identifying potential customers. VetMed Associates contacts Jing and a
anges to pay a consultant $1,500 in exchange for analyzing some data. Jing's income statement would include _______ with respect to this transaction.
    
    
    
    
    
    
    
    
    
    
    A. revenue of $1,500 and cost of services of $1,125
    B. revenue of $1,875 and cost of services of $1,500
    C. revenue of $1,500
    D. revenue of $375
    
    
    
    
    
    
    
    
    
    16.   In 2015, Solid Construction Co. (SCC) began work on a two-year fixed-price contract project. SCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions):
    Accounts receivable (from construction progress billings)
    $37.5
    Actual construction costs incu
ed in 2015
    $135
    Cash collected on project during 2015
    $105
    Construction in progress, 12/31/15
    $207
    Estimated percentage of completion during 2015
    60%
What's the fixed contract price for SCC's project?
    
    A. $120 million
    B. $345 million
    C. $72 million
    D. $225 million
    17.   Race Corporation's results for the year ended December 31, 2016, include the following material items:
    Sales revenue
    $6,200,000
    
    
    Cost of goods sold
    3,800,000
    Selling and administrative expenses
    1,300,000
    Loss on sale of investments
    200,000
    Loss on discontinued operations
    500,000
    Loss on impairment
    80,000
Race Corporation's income from continuing operations before income taxes for 2016 is
    
    A. $880,000
    B. $320,000
    C. $900,000
    D. $820,000
    18.   On April 1, Bill's Builders LLC entered into a contract of one-month duration to build a barn for Nolan. Bill's is guaranteed to receive a base fee of $5,000 for his services in addition to a bonus depending on when the project is completed. Nolan created incentives for Bill's to finish the barn as soon as it can without jeopardizing the structural integrity of the barn. Nolan offered to pay an additional 30% of the base fee if the project finished 2 weeks early and 10% if the project finished a week early. The probability of finishing 2 weeks early is 30% and the probability
Answered Same DayDec 25, 2021

Solution

Nidhi answered on Dec 28 2021
51 Votes
LIST OF ANSWERS AGAINST ORDER ID 49234
1.    A. $211,000
        
    Amount $
    Net Income
    216,000
    Increase in inventory (46,000-44,000)
    (2,000)
    Decrease in accounts payable (33,000-36,000)
    (3,000)
    Net operating cash flows
    211,000
Under Indirect method to calculate operating cash flows, If the asset increases, the cash flow decreases and vice versa for liability.
2.    D. $41,874
    PV = $50,000*0.83748 = $41,874
    PV of $1; n=6; i=3%
3.    A. $57,737
        Period
    Cash Inflows $
    PV of $1 @ 10% annually
    PV of Cash Inflows $
    Immediate
    8,000
    1.00000
    8,000.00
    Year I End
    20,000
    0.90909
    18,181.80
    Year II End
    20,000
    0.82645
    16,529.00
    Year III End
    20,000
    0.75131
    15,026.20
    
    
    TOTAL
    57,737.00
4.    B. A cash outflow of $82 million
    Cash Outflow = $14 million + $80 million -...
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