Summer 2014 Exam 3 ANSWERS
Name:
Use the following information for the next two questions.
Napier Co. provided the following information on selected transactions during 2013:
Purchase of land by issuing bonds $500,000
Proceeds from issuing bonds 1,000,000
Purchases of inventory 1,900,000
Purchases of treasury stock 300,000
Loans made to affiliated corporations 700,000
Dividends paid to preferred stockholders 200,000
Proceeds from issuing preferred stock 800,000
Proceeds from sale of equipment 100,000
1. The net cash provided (used) by investing activities during 2013 is
a. $100,000.
b. $(600,000).
c. $(1,100,000).
d. $(2,500,000).
e. None of the above.
2. The net cash provided by financing activities during 2013 is
a. $1,100,000.
b. $1,300,000.
c. $1,600,000.
d. $1,800,000.
e. None of the above.
3. Which of the following should be disclosed in a Summary of Significant Accounting Policies?
a. Depreciation method followed
b. Types of executory contracts
c. Amount for cumulative effect of change in accounting principle
d. Claims of equity holders
e. None of the above
Use the following information for the next three questions.
The balance sheet data of Kohler Company at the end of 2013 and 2012 follow: 2013 2012
Cash $ 100,000 $ 140,000
Accounts receivable (net) 240,000 180,000
Merchandise inventory 280,000 180,000
Prepaid expenses 40,000 100,000
Buildings and equipment 360,000 300,000
Accumulated depreciation—buildings and equipment (72,000) (32,000)
Land 360,000 160,000 Totals $1,308,000 $1,028,000
Accounts payable $272,000 $220,000
Accrued expenses 48,000 72,000
Notes payable—bank, long-term 160,000
Mortgage payable 120,000
Common stock, $10 par 836,000 636,000
Retained earnings (deficit) 32,000 (60,000) $1,308,000 $1,028,000
Land was acquired for $200,000 in exchange for common stock, par $200,000, during the year; all equipment purchased was for cash. Equipment costing $20,000 was sold for $8,000; book value of the equipment was $16,000 and the loss
Use the following information for the next two questions.
Napier Co. provided the following information on selected transactions during 2013:
Purchase of land by issuing bonds $500,000
Proceeds from issuing bonds 1,000,000
Purchases of inventory 1,900,000
Purchases of treasury stock 300,000
Loans made to affiliated corporations 700,000
Dividends paid to preferred stockholders 200,000
Proceeds from issuing preferred stock 800,000
Proceeds from sale of equipment 100,000
1. The net cash provided (used) by investing activities during 2013 is
a. $100,000.
b. $(600,000).
c. $(1,100,000).
d. $(2,500,000).
e. None of the above.
2. The net cash provided by financing activities during 2013 is
a. $1,100,000.
b. $1,300,000.
c. $1,600,000.
d. $1,800,000.
e. None of the above.
3. Which of the following should be disclosed in a Summary of Significant Accounting Policies?
a. Depreciation method followed
b. Types of executory contracts
c. Amount for cumulative effect of change in accounting principle
d. Claims of equity holders
e. None of the above
Use the following information for the next three questions.
The balance sheet data of Kohler Company at the end of 2013 and 2012 follow: 2013 2012
Cash $ 100,000 $ 140,000
Accounts receivable (net) 240,000 180,000
Merchandise inventory 280,000 180,000
Prepaid expenses 40,000 100,000
Buildings and equipment 360,000 300,000
Accumulated depreciation—buildings and equipment (72,000) (32,000)
Land 360,000 160,000 Totals $1,308,000 $1,028,000
Accounts payable $272,000 $220,000
Accrued expenses 48,000 72,000
Notes payable—bank, long-term 160,000
Mortgage payable 120,000
Common stock, $10 par 836,000 636,000
Retained earnings (deficit) 32,000 (60,000) $1,308,000 $1,028,000
Land was acquired for $200,000 in exchange for common stock, par $200,000, during the year; all equipment purchased was for cash. Equipment costing $20,000 was sold for $8,000; book value of the equipment was $16,000 and the loss