Author: Anonymous

Identify the account used by businesses to record the transfer of assets from a business to its stockholders:

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

Vasquez Company reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, and a $100,000 decrease in notes payable. Calculate the cash provided (used) in operating activities using the indirect method.

The current ratio is computed by dividing current liabilities by current assets.

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $118,500. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee’s annual FICA taxes amount is:

The evaluation of company performance and financial condition focuses solely on past performance.

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:

The debt ratio of Jackson’s Shoes is .9 and the debt ratio of Billy’s Catering is 1.0. Based on this information, an investor can conclude:

The payment of cash dividends to shareholders is classified as a financing activity.

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.