On January 1, Year 1, Colgate Corporation decided to switch from the direct method to the indirect method of preparing the statement of cash flows. Assuming a positive net income figure but a decrease in the cash balance, what can be said about the change in method of preparing the statement?
A. The only difference will be in the cash flows from financing activities section.
B. There will be no difference in the totals on the statement of cash flows.
C. The direct method will yield a larger amount for cash flows from operating activities.
D. The indirect method will yield a larger amount for cash flows from operating activities.
Answer: B
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Smith reported the following for 2012. Beginning market price $20.00 Average market price 24.00 Ending market price 26.00 Earnings per share: Basic 1.80 Diluted 1.60 Cash dividends per share 1.00 The price earnings ratio and dividend payout were:
a. 16.25 and 62.50%. b. 16.25 and 65.00%. c. 17.00 and 62.50%. d. 15.00 and 62.50%. e. 15.00 and 60.00%.
Which step of the control systems process produces a performance evaluation?
a. step 1 b. step 2 c. step 3 d. step 4
The entry to close the Insurance Expense account at the end of the accounting period is to:
A) debit Retained Earnings and credit Prepaid Insurance B) debit Prepaid Insurance and credit Retained Earnings C) debit Insurance Expense and credit Retained Earnings D) debit Retained Earnings and credit Insurance Expense
Refer to the following selected financial information from Gomez Electronics. Compute the company's profit margin for Year 2. Year 2Year 1Net sales$478,500 $426,250 Cost of goods sold 276,300 250,120 Interest expense 9,700 10,700 Net income before tax 67,250 52,680 Net income after tax 46,050 39,900 Total assets 317,100 288,000 Total liabilities 181,400 167,300 Total equity 135,700 120,700
A. 16.7%. B. 14.1%. C. 11.7%. D. 9.6%. E. 33.9%.