Journal Entries

Question

Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?

A.  Operating activities section

B.  Investing activities section

C.  Financing activities section

D.  Does not represent a cash flow

Question

In performing a vertical analysis, the base for cost of goods sold is

A.  total selling expenses

B.  net sales

C.  total revenues

D.  total expenses

Question

Blanco, Inc. has the following income statement (in millions):

BLANCO, INC.

Income Statement

For the Year Ended December 31, 2011

Net Sales ………………………… $200

Cost of Goods Sold ………………………… 120

Gross Profit ………………………… 80

Operating Expenses ………………………… 44

Net Income ………………………… $ 36

Using vertical analysis, what percentage is assigned to Net Income?

A.  100%

B.  82%

C.  18%

D.  25%

Question

Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?

A. Cash ………………………………………………….. $4,500  

  Common Stock 4,500

B. Cash ……………………………… $4,500  

  Common Stock 1,000

  Paid-In Capital in Excess of Par 3,500

C. Cash …………………. $4,500  Common Stock 1,000

  Paid-In Capital in Excess of Stated Value 3,500

D. Common Stock ………………………………………………….. $4,500  

  Cash 4,500

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