Comet Metropolitan’s accountant reported $10,500,000 for the beginning investments balance, sales of investments with a book value of $500,000, and a $15,500,000 ending balance for investments.
What is the value of investments the company purchased during the year?
ANSWER
INCORRECT
·
$5,500,500
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THE CORRECT ANSWER
$5,500,000
·
YOU WERE SURE AND INCORRECT
$5,050,000
·
$5,005,000
·
I DON'T KNOW YET
The company purchased $5,500,000 of investments during the year. The other answers are not correct.
Beginning balance of investments + Purchases of investments – Book value of investments sold = Ending balance of investments
$10,500,000 + ? - $500,000 = $15,500,000
Purchases of investments = $15,500,000 + $500,000 -$10,500,000 = $5,500,000
Whistling Winds Resorts’ salaries and wages payable at the beginning of the period were $75,000, and the company had $600,000 of salaries and wage expenses during the year. The ending balance of wages payable was $65,000.
What were the payments for salaries and wages during the period?
ANSWER
INCORRECT
·
THE CORRECT ANSWER
$600,000
·
$650,000
·
YOU WERE SURE AND INCORRECT
$625,000
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$675,000
·
I DON'T KNOW YET
The payments for salaries and wages for the period were $600,000. The other answers are not correct.
Beginning balance, of salaries and wages payable + Salaries and wages expense – Payments for salaries and wages = Ending balance of salaries and wages payable
$75,000 + $600,000 - ? = $75,000
Salaries and wages payments = $75,000 - $675,000 = $600,000
If an increase in a current asset account occurs, then on the statement of cash flows, the amount ________.
ANSWER
INCORRECT
·
has no effect on net income
·
is netted with current liability changes
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THE CORRECT ANSWER
is subtracted from net income
·
YOU WERE SURE AND INCORRECT
is added to net income
·
I DON'T KNOW YET
If an increase in a current asset account occurs, then on the statement of cash flows, the amount is subtracted from net income. The other answers are not correct.
Which of the following is the original cost of a plant or equipment asset less its accumulated depreciation?
ANSWER
INCORRECT
·
Comparative balance sheets
·
YOU WERE SURE AND INCORRECT
Indirect method
·
THE CORRECT ANSWER
Net book value
·
Free cash flow
·
I DON'T KNOW YET
Net book value is the original cost of a plant or equipment asset less its accumulated depreciation. The other answers are not correct.
Free cash flow represents the amount of excess cash a business generates after taking into consideration the capital expenditures necessary to maintain its business.
A comparative balance sheet is a balance sheet that presents (i.e. compares) two fiscal periods, usually highlighting the changes in each account.
The indirect method is a method of presenting the cash flows from operating activities that begins with the company’s net income, which is prepared on an accrual basis, and then reconciles it back to the cash basis through a series of adjustments.
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