Q1. Do the following characteristics have to be met in order to classify a liability as current on the balance sheet? Characteristic #1 – Settlement is expected within one year or operating cycle, whichever is less.
Characteristic #2 – Settlement will require the use of cash within one year or operating cycle, whichever is greater. Characteristic #1
Characteristic #2
A) No No B) Yes No C) No Yes
Q2. Firebird Company reported the following financial information at the end of 2007:
| in millions
| Merchandise inventory | $240 | Minority interest | 70 | Cash and equivalents | 275 | Accounts receivable | 1,150 | Accounts payable | 225 | Property & equipment | 2,160 | Accrued expenses | 830 | Current portion of long-term debt | 120 | Long-term debt | 1,570 | Retained earnings | 4,230 |
Calculate Firebird’s current assets and working capital. Current assets
Working capital
A) $1,665 million $420 million B) $1,665 million $490 million C) $1,735 million $490 million
Q3. Peterson Painting Company is a commercial painting contractor. At the beginning of 20X7, Peterson’s net working capital was $350,000. The following transactions occurred during 20X7: Performed services on credit | $150,000 | Purchased office equipment for cash | 10,000 | Recognized salaries expense | 54,000 | Purchased paint supplies on on credit | 25,000 | Consumed paint supplies | 20,000 | Paid salaries | 50,000 | Collected accounts receivable | 157,000 | Recognized straight-line depreciation expense | 2,000 | Paid accounts payable | 15,000 |
Calculate Peterson’s working capital at the end of 20X7 and the change in cash for the year 20X7. Working capital
Change in cash
A) $414,000 $82,000 B) $416,000 $82,000 C) $416,000 $80,000
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发表于 2009-1-17 10:36
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