财务报表分析：存货、长期资产、递延税项和表内及表外负债(一)及答案解析.doc

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1、财务报表分析：存货、长期资产、递延税项和表内及表外负债(一)及答案解析(总分：49.00，做题时间：90 分钟)一、B单项选择题/B(总题数：1，分数：49.00)QuestionThe following information has been gathered regarding Williams Investing, which uses thestraight-line method for depreciation.Depreciable life of 8 years on its assets.Net book value of assets is $ 40 million.A

2、ccumulated depreciation is $ 28 million.Salvage value is $12 million.It recently revised the estimates for the remaining useful life of its assets from 4 years to 6 years.Net income before the change is $13 million. The effective tax rate for the firm is 40 percent.（分数：49.00）(1).Depreciation expense

3、 for Williams Investing will decrease by: A. $ 2.3 million. B. $ 3.6 million. C. $ 1.4 million.（分数：1.00）A.B.C.D.(2).Net income for Williams Investing will increase by: A. 13.85%. B. 10.62%. C. 15.39%.（分数：1.00）A.B.C.D.(3).A firm ended the last period with inventory of $ 4.0 million and a last in, fir

4、st out (LIFO) reserve of $175000. During the year, it made purchases of $ 2. 0 million and reported sales of $ 5.5 million with a gross margin of 0.32. At the end of the year, it reported a LIFO reserve of $ 75000. What is the value of the firm s cost of goods sold (COGS) on a first in, first out (F

5、IFO) basis ? A. $ 384000O. B. $ 3740000. C. $ 3640000.（分数：1.00）A.B.C.D.(4).Which of the following statements about a company that capitalizes significant costs this year is least likely correct? Compared with expensing, a company that capitalized these costs would: A. show smoother reported income a

6、nd lower return on assets in future years. B. have higher cash flow from operations and lower cash flow from investing. C. have lower profitability ratios this year and higher cash flows from operations.（分数：1.00）A.B.C.D.(5).Which of the following situations will most likely require a company to reco

7、rd a valuation allowance on its balance sheet? A. To report depreciation, a firm uses the double-declining balance method for tax purposes and the straight-line method for financial reporting purposes. B. A firm with deferred tax assets expects an increase in the tax rate. C. A firm is unlikely to h

8、ave future taxable income that would enable it to take advantage of deferred tax assets.（分数：1.00）A.B.C.D.(6).The best way to compute an inventory turnover ratio is to use: A. LIFO for COGS and FIFO for average inventory. B. FIFO for both COGS and average inventory. C. LIFO for both COGS and average

9、inventory.（分数：1.00）A.B.C.D.(7).During periods of rising prices and stable or growing inventories, the most informative inventory accounting method for income statement purposes is: A. FIFO because it allocates historical prices to cost of good sold (COGS) and provides a better measure of current inc

10、ome. B. LIFO because it allocates historical prices to cost of good sold (COGS) and provides a better measure of current income. C. LIFO because it allocates current prices to cost of good sold (COGS) and provides a better measure of current income.（分数：1.00）A.B.C.D.(8).TY Corp. is a manufacturing fi

11、rm with a reputation for very aggressive financial management. The company has a very high ROE of 28 percent and a spectacular return on assets of 42 percent.Which of the following is the most likely explanation of these ratios? TY Corp. : A. has just started using accelerated depreciation methods.

12、B. leases most of its fixed assets. C. does not capitalize most of its product development costs.（分数：1.00）A.B.C.D.(9).Ralph & Sons, Inc., uses the straight-line method of depreciation for its long-lived assets. After a recent meeting with the independent accountants where industry depreciation pract

13、ices were discussed, Ralph decided to switch to the double-declining balance method. In the year in which the switch occurs, Ralph should report this change as: A. a change in accounting principle and report its effect on prior period results as a non-recurring item, net of tax. B. an accounting err

14、or and directly adjust retained earnings. C. a change in accounting principle and report its effect on prior earnings as part of operating earnings.（分数：1.00）A.B.C.D.(10).Selected financial data from Krandall, Inc. s balance sheet for the year ended December 31 was as follows (in $ ) : Cash $1100000

15、Accounts Payable $ 400000Accounts Receivable 300000Deferred Tax Liability 700000Inventory 2400000 Long-term Debt 8200000Property, Plant & Eq. U8000000/U Conunon Stock 1000000Total Assets 11800000 Retained Earnings U1500000/ULIFO Reserve at Jan. 1 600000Total Liabilities & Equity11800000LIFO Reserve

16、at Dec. 31 900000Krandall uses the last in, first out (LIFO) inventory cost flow assumption. The tax rate is 40 percent. If Krandall used first in, first out (FIFO) instead of LIFO and paid any additional tax due, its assets-to-equity ratio would be closest to: A. 4.06. B. 3.63. C. 3.73.（分数：1.00）A.B

17、.C.D.(11).A company issued a bond with a face value of $ 67831, maturity of 4 years, and 7 percent coupon, while the market interest rates are 8 percent.What is the unamortized discount when the bonds are issued? A. $498.58. B. $ 15726.54. C. $ 2246. 65.（分数：1.00）A.B.C.D.(12).Lakeside Co. recently de

18、termined that one of its processing machines has become obsolete three years early and, unexpectedly, has no salvage value. Which of the following statements is most consistent with this discovery? A. Historically, economic depreciation was understated. B. Lakeside Co. will owe back taxes. C. Histor

19、ically, economic depreciation was overstated.（分数：1.00）A.B.C.D.(13).In 2005, Carpet Company decides to change from the straight-line method of depreciation to the sum of the year s digits method. The following information is available : Pre-2005 2005Straight Line Depreciation $ 1600000 $ 400000Sum of

20、 the Years Digits $ 2300000 $ 500000On its 2005 financial statements, Carpet will report: A. $ 400000 depreciation expense in the 2005 income statement and $ 800000 separately as a change in accounting principle net of taxes. B. $ 500000 depreciation expense in the 2005 income statement and $ 700000

21、 separately as a change in accounting principle net of taxes. C. $1200000 depreciation expense in the 2005 income statement and include a footnote of explanation including the tax effect.（分数：1.00）A.B.C.D.(14).Annual interest expense is the: A. sum of the annual coupon payments. B. amount paid to cre

22、ditors in excess of par. C. book value of the debt times the market interest rate when it was issued.（分数：1.00）A.B.C.D.(15).Selected information from the financial statements of Salvo Company for the years ended December 31,2003 and 2004 is as follows ( in $ millions) : 2003 2004Sales $ 21 $ 23Cost o

23、f Goods Sold (8) (9)Gross Profit 13 14Cost of Franchise (6) 0Other Expenses (6) (6)Net Income $ 1 $ 8 Cash $ 4 $ 5 Accounts Receivable 6 5Inventory 9 7Property, Plant & Equip. 12 15(net)Total Assets $ 31 $ 32 Accounts Payable $ 7 $ 5 Long-term Debt 10 5Common Stock 8 8Retained Earnings 6 14Total Lia

24、bilities and Equity $ 31 $ 32Salvos return on average total equity for 2004 was ( $8/( ( $8 + $6) + ( $8 + $14) )/2 =) 44.4 percent.If Salvo had amortized the cost of the franchise acquired in 2003 over six years instead of expensing it, Salvo s return on average total equity for 2004 would have dec

25、reased from 44.4 percent to: A. 38.9 percent. B. 35.6 percent. C. 31.1 percent.（分数：1.00）A.B.C.D.(16).Are the following statements about trade debt and customer advances true or false? Statement 1: Trade debt is reported in the balance sheet at the present value of the future expected cash flows disc

26、ounted at the firm s weighted-average cost of capital. Statement 2: For analytical purposes, customer advances should be viewed as a prediction of future revenues rather than as an expected cash outflow.Statement 1 Statement 2A. False TrueB. False FalseC. True True A. B. C. （分数：1.00）A.B.C.D.(17).Whi

27、ch of the following is not the result of using an straight line depreciation method instead of accelerated depreciation method in the early years of assets life? A. lower depreciation expense. B. higher assets. C. lower net income.（分数：1.00）A.B.C.D.(18).A manufacturing firm reports the following in i

28、ts financial statements:Gross plant and equipment $ 2700000Depreciation expense $ 235000Accumulated depreciation $1850000The average depreciable life of plant and equipment is: A. 7.87 years. B. 3.62 years. C. 11.49 years.（分数：1.00）A.B.C.D.(19).If a lease is capitalized, as compared to being treated

29、as an operating lease, the effect on the current ratio and the debt/equity ratio will be: Current Ratio Debt/Equity Ratio A. decrease decrease B. decrease increase C. increase decrease（分数：1.00）A.B.C.D.(20).Which of the following definitions used in accounting for income taxes is least accurate? A. A

30、n income tax expense is an expense resulting from current period pretax income and change in deferred taxes. B. A valuation allowance is a reserve against deferred tax assets based on the likelihood that those assets will not be realized. C. A deferred tax liability is a balance sheet amount related

31、 to the difference between tax expense and taxes payable that is expected to be recovered from future operations.（分数：1.00）A.B.C.D.(21).During periods of decreasing prices, what type of inventory accounting method should a firm use to report higher net income? The company should use: A. FIFO because

32、during periods of decreasing prices, the COGS will be lower, resulting in a higher net income. B. FIFO because during periods of decreasing prices, the COGS will be higher, resulting in a higher net income. C. LIFO because during periods of decreasing prices, the COGS will be lower, resulting in a h

33、igher net income.（分数：1.00）A.B.C.D.(22).During an accounting period a company has the following sequence of transactions with a beginning inventory of zero: Purchases Sales100units at $ 210 80units at $ 24090units at $ 225 90units at $ 250The company s cost of goods sold (COGS) using FIFO for invento

34、ry accounting, and its ending inventory using LIFO, are closest to:FIFO COGS LIFO ending inventoryA. $ 36750 $ 4200B. $ 36750 $ 4500C. $ 37050 $ 4200 A. B. C. （分数：1.00）A.B.C.D.(23).Which of the following statements about leases is least accurate? A. If a lease is a capital lease and the lessor is no

35、t a dealer in the leased asset, the lease is a direct financing lease. B. If the lease is a capital lease and the lessor is a dealer or seller of the leased equipment, the lease is a sales-type lease on the books of the lessor. C. In a direct financing lease, the gross profit is recognized at the le

36、ase inception, while in a sales-type lease it is not.（分数：1.00）A.B.C.D.(24).Pischke Motors provided you with the following financials:Beginning LIFO Reserve $ 2484Cost of Goods Sold (COGS) using LIFO $ 3988COGS using FIFO of $ 2004What is the ending LIFO reserve? A. $ 4468. B. $ 500. C. $ 2484.（分数：1.

37、00）A.B.C.D.(25).In general, as compared to companies with operating leases, companies with capital leases report : A. lower working capital and asset turnover. B. lower cash flow from operations, higher cash flow from financing. C. higher debt to equity and return on equity ratios (in the early year

38、s)（分数：1.00）A.B.C.D.(26).Which accounting methods are preferable for income statements and balance sheets? A. LIFO for the balance sheet and FIFO for the income statement. B. LIFO for both income statements and balance sheets. C. LIFO for income statements and FIFO for the balance sheet.（分数：1.00）A.B.

39、C.D.(27).Given the following inventory information about the Buckner Company:Year-end LIFO inventory of $ 6500.Year-end LIFO reserve of $ 2500.The current year s LIFO cost of goods sold is $15000.After tax income is $1600.The previous years LIFO reserve was $ 2000.What is the firm s after tax net in

40、come on a FIFO basis if the firm s tax rate is 40 percent? A. $ 2100. B. $1300. C. $1900.（分数：1.00）A.B.C.D.(28).During deflation and decreasing inventory quantities, a company using last-in first-out (LIFO) rather than first-in first-out (FIFO). What is the effect on inventory turnover and net profit

41、 mar-gin?Inventory Turnover Net Profit MarginA. higher lowerB. higher higherC. lower higher A. B. C.（分数：1.00）A.B.C.D.(29).Calculate the average age of the fixed assets: A. 4 years. B. 4.5 years. C. 5.5 years.（分数：1.00）A.B.C.D.(30).An impairment write-down results in a decrease in all of the following

42、 financial statement items and ratios EXCEPT: A. future depreciation expense. B. stockholders equity. C. the debt-to-equity ratio.（分数：1.00）A.B.C.D.(31).Longboat, Inc. sold a luxury passenger boat from its inventory on December 31,2005 for $ 2000000. It is estimated that Longboat will incur $ 100000

43、in expenses servicing the warranty during its 5-year obligation. Longboat s tax rate is 30 percent.To account for the tax implications of the warranty obligation, Longboat should: A. record a decrease in taxes payable of $ 30000. B. record a deferred tax asset of $ 30000. C. record a deferred tax li

44、ability of $ 30000.（分数：1.00）A.B.C.D.(32).Which of the following is least likely to be an incentive for structuring a lease as an operating lease instead of a capital lease? A. The period of use is short relative to the overall life of the asset. B. The lessee is in a high tax bracket and the lessor

45、is in a low tax bracket. C. The corporate bond indenture contains specific covenants relating to financial policies that the company must follow.（分数：1.00）A.B.C.D.(33).The Latham Corporation entered into a lease for 5 years that requires payments of $10000 per year. If the lease is classified as a ca

46、pital lease, what is the amount recorded as debt for this lease at the end of one period if the appropriate discount rate is 10 percent? A. $ 30326. B. $ 37908. C. $ 31699.（分数：1.00）A.B.C.D.(34).An analyst is comparing a firm to its competitors. The firm has a deferred tax liability and is expected t

47、o continue to grow in the foreseeable future. How should the liability be treated for analysis purposes? A. It should be treated as equity at its full value. B. It should be treated as a liability at its full value. C. The present value should be treated as a liability with the remainder being treat

48、ed as equity.（分数：1.00）A.B.C.D.(35).The year-end financial statements for a firm using last in first out (LIFO) acounting show an inventory level of $5000, cost of goods sold (COGS) of $16000, and inventory purchases of $14500. If the LIFO reserve is $ 4000 at year-end and was $1500 at the beginning

49、of the year, what would the COGS have been using FIFO accounting? A. $18500. B. $11000. C. $13500.（分数：1.00）A.B.C.D.(36).Debt covenants are restrictions imposed by bondholders on the issuer in order to protect the bondholders position. Which of the following is least likely to be an area in which restrictions are imposed by debt