答案和详解如下： 21.Which of the following statements is correct when inventory prices are falling? A) LIFO results in lower COGS, lower earnings, lower taxes, and higher cash flows. B) LIFO results in higher COGS, lower earnings, higher taxes, and higher cash flows. C) LIFO results in lower COGS, higher earnings, higher taxes, and lower cash flows. D) LIFO results in higher COGS, higher earnings, higher taxes, and higher cash flows. The correct answer was C) Remember, prices are falling. 22. Lowe Corporation Balance Sheet
(in thousands $) | Assets | Liabilities & Owners’ Equity | Cash | $ 500 | Accounts payable | $ 2,000 | Marketable Securities | 1,000 | Notes payable | 1,500 | Accounts Receivable | 3,000 | Total current liabilities | $ 3,500 | Inventory | 1,500 | |
| Total current assets | $ 6,100 | |
| | | Long-term debt | $ 500 | | | |
| | | Preferred stock (100K shs) | 1,000 | | | Common stock (20M shs) | 2,000 | Net Prop., Plant, & Eq. | $ 4,000 | Retained earnings | 5,600 | Prepaid pension cost | 500 | Total stockholders’ equity | 8,600 | Intangible assets | 3,000 | |
| Total assets | $ 13,600 | Total liabilities & equity | $ 13,600 | | | |
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Footnote disclosures: §
One of Lowe’s major customers, who accounts for $500 in receivables, has just filed bankruptcy. §
Inventories are valued at cost as determined by last in, first out (LIFO) method. The LIFO reserve is $300. §
Additional operating facilities and equipment are financed with operating leases that have a present value of $1,000. §
Intangible assets represent $3,000 of goodwill from previous acquisitions. §
Due to a decrease in interest rates, long-term debt has a current market value of $600. §
The current market price of Lowe’s preferred stock is $2/share. §
Lowe’s is expected to incur expenses with a present value of $300 to remedy an environmental problem at one of its sites. Lowe's total long-term obligations on the adjusted balance sheet total which of the following? A) $1,900. B) $1,800. C) $2,100. D) $2,400. The correct answer was A) Original LTD is $500; LTD is adjusted to market value +100; operating leases are capitalized by adding 1,000; the environmental obligation is a liability +300. 23.What is Lowe's ratio of long-term debt to equity based on the historical cost balance sheet? A) 0.06. B) 0.03. C) 0.30. D) 0.60. The correct answer was A) (taken directly from historical balance sheet) 500/8600. 24.What is Lowe's adjusted inventory based on the FIFO method? A) $1,800. B) $300. C) $1,500. D) $1,200. The correct answer was A) LIFO inventory of 1,500 + LIFO reserve of 300 = 1,800 FIFO inventory. 24.Inventories are listed on the balance sheet at $600,000, retained earnings are $1.9 Million. In the notes to financial statements, you find a LIFO reserve of $125,000. Also, the probability of a LIFO liquidation is high. Assuming a tax rate of 36 percent, what will be the adjusted value of retained earnings? A) $1,820,000. B) $1,980,000. C) $1,855,000. D) $1,945,000. The correct answer was B) The adjustment to retained earnings will be: $125,000*(1-.36). 25.International Motors (IM) currently shows a pension asset of $1.2 billion on its balance sheet. Upon further inspection it is discovered that IM’s pension is actually under funded by $1.3 billion. What adjustments would an analyst make to modify the balance sheet of IM to include this discrepancy? A) Increase long-term liabilities by $1.3 billion, and reduce equity by $1.3 billion. B) Increase long-term liabilities by $2.5 billion, and reduce equity by $2.5 billion. C) Eliminate the pension asset, increase long-term liabilities by $2.5 billion, and reduce equity by $2.5 billion. D) Eliminate the pension asset, increase long-term liabilities by $1.3 billion, and reduce equity by $2.5 billion. | 
发表于 2008-5-20 18:08
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