QUESTIONS 43 THROUGH 60 RELATE TO FINANCIAL REPORTING AND ANALYSIS. (2...

5-year Treasury note classified as available-for-sale. On its income statement, the company should report the coupon

interest received from:

both of these securities.

A)

neither of these securities.

B)

only one of these securities.

C)

Question #52 of 120 Question ID: 1146098

Acme Corp. purchased a new stamping machine for $100,000, paid $10,000 for shipping, and paid $5,000 to have it

installed in their plant. Based on an estimated salvage value of $25,000 and an economic life of six years, the difference

between straight-line depreciation and double-declining balance depreciation in the second year of the asset's life

is closest to:

$7,220.

$10,556.

$16,666.

Question #53 of 120 Question ID: 1146089

How will a firm's operating cash flow be affected by a decrease in accounts receivable and by an increase in accounts

payable?

Both will increase operating cash flow.

Both will decrease operating cash flow.

One will increase operating cash flow and one will

decrease operating cash flow.

Question #54 of 120 Question ID: 1146094

From the point of view of a financial analyst, when evaluating companies that use different inventory cost assumptions, in

a period of:

stable prices, LIFO inventory is preferred to FIFO

inventory.

increasing prices, FIFO cost of sales is preferred to

LIFO cost of sales.

Question #55 of 120 Question ID: 1146109

In general, as compared to companies with operating leases, companies with finance leases report:

lower working capital and asset turnover.

higher debt-to-equity ratios and return on equity in the

early years.

higher expenses in the early years and over the life of

the lease.

Question #56 of 120 Question ID: 1146102

Longboat, Inc., sold a luxury passenger boat from its inventory on December 31 for $2,000,000. It is estimated that

Longboat will incur $100,000 in warranty expenses during its 5-year warranty period. Longboat's tax rate is 30%. To

account for the tax implications of the warranty obligation prior to incurring warranty expenses, Longboat should:

record a deferred tax asset of $30,000.

record a deferred tax liability of $30,000.

make no entry until actual warranty expenses are

incurred.

Question #57 of 120 Question ID: 1151635

During 20X3, Rory, Inc., reported net income of $15,000 and had 2,000 shares of common stock outstanding for the entire

year. Rory also had 2,000 shares of 10%, $50 par value preferred stock outstanding during 20X3. During 20X1, Rory

issued 100, $1,000 par, 6% bonds for $100,000. Each of the bonds is convertible to 50 shares of common stock. Rory's

tax rate is 40%. Assuming these bonds are dilutive, 20X3 diluted EPS for Rory is closest to:

$0.71.

$1.23.

$2.50.

Question #58 of 120 Question ID: 1146106

A firm issues a 4-year semiannual-pay bond with a face value of $10 million and a coupon rate of 10%. The market

interest rate is 11% when the bond is issued. The balance sheet liability at the end of the first semiannual period

$9,650,700.

$9,683,250.

$9,715,850.

Question #59 of 120 Question ID: 1146091

The presentation format of balance sheet data that standardizes the first-year values to 1.0 and presents subsequent

years' amounts relative to 1.0 is:

an indexed balance sheet.

a vertical common-size balance sheet.

a horizontal common-size balance sheet.

Question #60 of 120 Question ID: 1146103

For 20X1, Belcher Motors reported a decrease in its deferred tax liabilities, a decrease in its deferred tax assets, and an

increase in its valuation allowance. To an analyst, this would most likely suggest that the company has:

decreased its estimate of future profitability.

increased the estimated useful life of some capitalized

assets.

increased its estimate of the period over which unearned

revenue will be recognized.

Question #61 of 120 Question ID: 1146133