Your Name Here Quiz 3: Ch 14 15 16 17 Name: __________________________ Date: ___

Your Name Here Quiz 3: Ch 14 15 16 17 Name: __________________________ Date: _____________ You must complete answer all questions – be a very careful reader 5 Questions: 4 essays; plus 1 Problem Ch 14 15 16 17 … please try to complete the quiz in one setting Save the exam file as a word document with your name in the file name & Quiz 3 such as Ben_Ford_Quiz_3 UMUC – ACCT 301 Due Monday February 29, 2016 This quiz is to be completed without the assistance of any other person. You may use only the resources provided by your instructor for this class. ** Save this file and include your name in the file name: Ben_Ford_Quiz_3 You may create an Excel and / or Word File for your work. Please verify that each page prints out formatted with your name and page number on the page. Excel files should show gridlines. Excel ‘page format’ has options for grid lines (sheet) and headers/footers. At a minimum, use print preview so you can see how the work will print out. I pledge on my honor that I have not given or received any unauthorized assistance on this examination. In addition, I pledge that I will not disclose to, or discuss the contents of this examination with, students who have not taken it. _________________________________________________________________________ Signed Good Luck!!! Answer all questions! Prepare and present calculations for partial credits for questions with calculations and presentations. Page 1 of 3 Your Name Here Quiz 3 Ch 14 15 16 17 Quiz 3: Ch 14 15 16 17 – Your Name ____________________ (also include your name in the file name) Q1 Will the income statement include cash dividends declared and paid in the reporting period? Yes or No? Q2 Explain the journal entries, for the receipt of cash, and for the first interest payment, in your own words, when, as a borrower, our company does the following: A. Issues Bonds at Face Value B. Issues Bonds at a discount C. Issues Bonds at a premium (Hint: your answer for each independent situation [A, B, and C] should include the phrases “Credit to Bonds Payable” and “Contract Interest Rate”) Q3 Explain the change in the investment account for the year, for each of the following independent situations, when the investment is accounted for using the equity method: A. The company they invested in has a net loss for the year B. The company they invested in pays earns a profit and pays a cash dividend Q4 What do we learn by using the vertical analysis process for a company when analyzing the income statement and the balance sheet? That is, how would you explain to someone what you learn about a company by completing a vertical analysis of their SEC 10K (a) income statement and (b) balance sheet? Go to next page for Question 6 5 requiring you to complete a Statement of Cash Flows using the indirect method. Q5 Page 2 of 3 Your Name Here Quiz 3: Ch 14 15 16 17 Wheelhorse Products’ comparative balance sheets are presented below. Wheelhorse Products Inc. Comparative Balance Sheets 31-Dec 2015 Cash Accounts receivable $24,680 2014 $10,820 22,000 23,630 2,800 2,400 Land 14,540 15,410 Buildings Accumulated depreciation— buildings 58,000 42,400 (15,20 0) (12,79 0) Prepaid Insurance Total Accounts payable Unearned revenue $106,820 $81,870 $12,520 $8,945 $2,400 $18,000 Common stock 50,000 20,000 Retained earnings 41,900 34,925 Total $106,820 $81,870 Additional information: Net income was $18,475. Dividends declared and paid were $11,500. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $20,000 Required: Prepare a statement of cash flows for the year ended December 31, 2015 using the indirect method. (Hint: for any accounts where the balance changed, create a T account or record other analysis for your review. You might make a column of changes, so you can see if a balance increased or decreased and by how much. You do not need to turn this in but you can. You may wish to use Excel for this problem. Copy and paste the balance sheet into your Excel file. If you use Excel you can submit a separate file for the statement of cash flow problem. Page 3 of 3