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FSA Quiz

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1. Identify the financial statements in which you would find each of the items listed below. Some items may appear on more than one statement. Indicate all financial statements that apply to each item. The possible choices are:

B - Balance sheet
SE - Statement of Stockholders' Equity
I - Income Statement
CF- Statement of Cash Flows

Financial Statement Item Financial Statement
a. Land, ending balance
b. Proceeds from sale of land
c. Prepaid insurance expense
d. Insurance expense
e. Revenue
f. Unearned revenue

2. For each of the following financial statement items, indicate the correct balance sheet classification, from the list below. You may use each balance sheet classification item only once.

Balance sheet classification
a. Current asset
b. Long term asset
c. Current liability
d. Long term liability
e. Equity
f. None of the above

Financial statement item Balance sheet classification
Interest payable
Treasury stock
Insurance expense
Note payable, due in 2015
Prepaid insurance expense

3. Match the following principles of financial accounting to their definitions:

a. Financial statements are linked within and across time
b. Revenue and expenses are recognized when a cash
transaction is completed
c. Revenue is recognized when earned
d. Recognizes revenue when earned and expenses when incurred, even if no cash is received or paid

1) Revenue recognition principle
2) Articulation of financial statements
3) Cash basis accounting
4)   Accrual accounting

4. Fill in the blanks to complete the Procter & Gamble Balance Sheet ($ millions).

Procter & Gamble
Balance Sheet
Cash  3,313  Current liabilities   ? 
Non-cash assets  ?   Long term liabilities    43,540
   Shareholders' Equity   69,494
Total assets    ?   Total Liabilities and equity   143,992

5. Whole Foods reports the following balances in its stockholders' equity accounts.Fill in the blanks.

      2012 2011 2010
Retained earnings beginning of year  ?   ?   486,299
Net income  ?   182,740  203,828
Dividends  85,300  121,802  ? 
Retained earnings end of year  439,422  410,198  ? 

6. Record the following transactions in the financial statements effects template below.

Balance Sheet Income Statement

Transaction Cash Noncash = Liabil- + Contrib. + Earned 'Rev- Expen- = Net Income

Purchased $5,000 of  inventory on credit
Sell all inventory for  $9,000 on account
Collect $2,000 cash for   accounts receivable
Pay $3,000 cash toward   accounts payable

7. Selected balance sheet income statement data follow for Whole Foods Market,Inc for the year ended September 28, 2008 (in thousands). Use the data to calculate the company's current ratio and quick ratio.

Cash and cash equivalents  30,534
Restricted cash $617
Accounts receivable $115,424
Merchandise inventories $327,452
Current assets $622,606
Current liabilities $666,177

8. The unadjusted trial balance of Pepe's Pizza for fiscal 2011, includes the following items:

Debit Credit
Inventory 23,900 (debit)
Wages payable   $400 (credit)
Prepaid insurance 1,900 (debit)
Taxes payable 0

Your analysis reveals additional information as follows:
• the cost of i nventory items on hand is $11,600 (do not worry about the sale of these items- the sale has already been recorded, however the cost has not been recorded as an expense yet)
• employee wages for the two weeks prior to year end were $3,900 and these will not be paid until the 2012 fiscal year (this amount is in addition to what is on the unadjusted trial balance)
• the unexpired portion of the company's insurance policy at year end was $2,300
• the company's tax accountant reports that the company will owe $27,000 for income taxes for fiscal 2011.

Prepare the actual journal entries for any required accounting adjustments (use journal entries and not T

9. BloomFree is an organic floral shop. After its first quarter of operations (March 31, 2011), the company's accountant prepared the following trialbalance, in alphabetical order. The accountant also tells you that net income for the quarter was $10,000 (this is a correct number and can be proved using the below information). Use the trialbalance along with the net income information to prepare a balance sheet for BloomFree.

Accounts payable
Accounts receivable

Bank loan for van



Common stock

Cost of goods sold


Delivery van


Gas for van


Tax expense


Insurance expense




Prepaid insurance


Rent expense


Salaries expense



Taxes payable



10. The 2011 income statement of Snap-On Incorporated includes the amounts shown below. The company paid dividends of $70 (in millions). Prepare the closing entries for the company for 2011 (assume this company has accounts called operating expenses and operating revenue).

(in millions)

Cost of goods sold
Other operating expenses
Interest expense
Other operating revenue
Income tax expense

11. Selected balance sheet and income statement data follow for E.l. DuPont et Nemours and Company (in millions). Use the data to calculate a) return on equity (ROE), b) return on net operating assets (RNOA), and c) the company's nonoperating return.

2010 Net income $2,008

2010 NOPAT $2,254
2010 Operating assets $36,150
2010 Operating liabilities $419,007
2009 Net operating assets $18,772
2010 Average Shareholders' equity $9,131

12. Use the income statement for Staples, Inc. to compute a) the tax shield and b) NOPAT. The company's combined federal and state statutory tax rate is 37.5%.

STAPLES, INC. AND SUBSIDIARIES Consolidated Statement of Income for January 31, 2011

Sales  23,083,775
Cost of goods sold and occupancy costs  16,836,839
Gross profit  6,246,936
Operating and selling expenses   4,631,219
General and administrative expenses  173,524
 Amortization of intangibles  70,265
Total operating expenses  4,875,008
Operating income  1,371,928
Other nonoperating income (expense): 
Interest income  28,485
Interest expense  (149,774)
Miscellaneous expense  (7,555)
Income before income taxes and minority interest  1,243,084
Income tax expense  428,863
Income before minority interests  814,221
Minority interest expense  8,957
Net Income  805,264

13. Use the balance sheets for the fiscal 2007 (year ended February 2, 2008) for Staples, Inc. to compute a) operating assets, b) operating liabilities, and c) net operating assets (NOA).

STAPLES, INC. AND SUBSIDIARIES Consolidated Balance Sheets
(in Thousands)

14. On December 31, 2009, Tri-State Construction Inc. signs a contract with the state of Texas Department of Transportation to manufacture a bridge over the Rio Grande. Tri-State anticipates the construction will take three years. The company's accountants provide the following contract details relating to the project:

Contract price $210 million
Estimated construction costs $150 million
Estimated total profit $ 60 million

During the three-year construction period, Tri-State incurred costs as follows:

2010 $ 15 million
2011 $ 90 mil lion
2012 $ 45 million

Compute the revenue recognized, construction costs expensed. and income earned for each year using the percentage of completion method.

15. Omnicare, Inc. reports the following in its 2008 10-k report (in thousands). Use the information to calculate basic and diluted earnings per share (EPS) numbers.

Net income $156,108
Weight-average common shares: basic $117,466
Weighted-average common shares: diluted $118,313

15. 4 pts.OMNICARE, INC. reports the following in its 200810-K report (in thousands).Use the information to calculate basic and diluted earnings per share (EPS) numbers.

Net income $156,108
Weighted-average common shares: Basic 117,466
Weighted-average common shares: Diluted 118,313

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