Self-test comprehensive problems V

Self-test Comprehensive Problems V
综 合 自 测 题 V
Part One (30%)
1. Give the Chinese/English of the following terms: (5%)
cash equivalent ______________ 权 责 发 生 制 _____________
proceeds ______________ 上 市 公 司 _____________
solvency ______________ 金 融 杠 杆 _____________
audit ______________ 流 动 比 率 _____________
trend analysis ______________ 产 权 比 率 _____________
2. Put the following sentences into Chinese: (10%)
1) Income statement shows the result of operation of a business for a certain period
of time, which enables the management to know whether the business is earning
or losing money.
2) The increase or decrease of inventory is determined simply by taking physical
inventory periodically.
3) To the extent that everybody over the age of 16 can open a checking account at
the bank, there is little difference between one’s money in hand and money in the
bank.
4) Many a monetary and fiscal policy acts as “double-edged swords”; their effects
may be favorable or unfavorable to economy.
5) From the producers’ point of view, the higher the price of goods, the better, for
they can increase the revenue from their products.
3. Put the following sentences into English: (15%)
1) 资 产 负 债 表 就 象 一 张 像 片 , 显 示 一 家 企 业 在 某 一 时 点 的 财 务 状 况 。
2) 从 股 份 公 司 经 营 者 的 观 点 看 , 其 公 司 发 行 的 股 票 价 格 越 高 , 他 们 的 责 任 就 越
重 。
3) 加 权 平 均 数 比 简 单 平 均 数 更 加 准 确 , 因 为 它 考 虑 到 各 个 因 素 的 权 重 。
4) 公 司 发 行 债 券 属 于 融 资 活 动 , 发 行 公 司 是 债 务 人 , 债 券 持 有 者 是 债 权 人 。
5) 这 种 处 理 问 题 的 方 法 是 基 于 互 利 互 惠 的 原 则 基 础 之 上 的 , 所 以 它 被 各 方 所
接 受 。
Part Two (70%)

1. Multiple choice questions: (20%)
1) A statement of cash flows would be least useful in answering which of the
following questions?
a. What was the average balance in the cash account during the period?
b. Did operating activities result in a positive or negative net cash flow?
c. How much cash was provided by financing activities during the period?
d. Were cash dividends paid by the company more or less than the net cash
flow from operations?
2) Which of the following does not create a difference between net income and the
net cash flow from operations?
a. Non-operating gains and losses
b. Depreciation expense
c. Timing differences between credit sales and collections from customers
d. Payment of a cash dividend
3) Depreciation expense
a. increase net cash flow from operations.
b. decrease net cash flow from operations.
c. does not affect net income.
d. does not affect net cash flow from operations.
4) Which of the following is not classified among the operating activities in a
statement of cash flows?
a. Payment of salary to employees.
b. Payment of the principal amount owed on a bank loan.
c. Payment of an account payable to a merchandise supplier.
d. Payment of income taxes.
5) A high quality of earnings is indicated by
a. earnings derived largely from newly introduced products
b. declaration of both cash dividends and stock dividends
c. use of FIFO method of inventory during sustained inflation.
d. a history of increasing earnings and conservative accounting methods.
6) Dividend yield on common stocks owned by an investor is computed by
a. dividing annual dividend per share by current market price per share
b. dividing annual dividend per share by the investor’s average cost per share
c. dividing annual dividend per share by the lower of investor’s cost or current
market price per share.
d. dividing annual dividend per share by the price-earning ratio.
7) Extensive use of leverage is usually associated with
a. a low equity ratio.
b. a high current ratio.
c. a low debt ratio.
d. high quality of earnings.
8) At the end of Year 10, Guangli Co. Ltd has a current ratio of 2 to 1. Which of the
following transactions will decrease the current ratio?
a. Issuance of long-term bonds at a premium.

. Sale of merchandise on open account at a price above cost..
c. Sale of plant assets for less than book value
d. Declaration of a cash dividend on common stock.
9) If the account receivable turnover is five times, then the average number of days
to collect accounts receivable is approximately
a. 50 days.
b. 65 days.
c. 73 days.
d. 91 days.
10) Which of the following combinations of situations is worse for the common
stockholders?
a. Return on assets exceeds the cost of borrowing; debt ratio is high.
b. Cost of borrowing exceeds the return on assets; equity ratio is high.
c. Return on assets exceeds the cost of borrowing; equity ratio is high.
d. Cost of borrowing exceeds the return on assets; debt ratio is high.
2. Problems: (50%)
1) The financial statement of Weimin Store provides the following information for
the current year:
End of Year
Beginning of Year
Accounts receivable 35 000 yuan 41 000 yuan
Inventory 41 000 48 000
Prepaid expenses 2 500 1 000
Accounts payable
(for merchandise) 23 000 26 000
Accrued liabilities 4 000 2 000
Net sales 350 000
Cost of goods sold 180 000
Operating expenses (incl.
depreciation of 15 000 yuan) 120 000
Using this information, compute for the current year: (12%)
a. Cash received from customers ________ yuan
Computation:
b. Cash payments for purchases of merchandise ________ yuan
Computation:
c. Cash payments for operating expenses ________ yuan
Computation:
d. Net cash flow from operating activities ________ yuan

Computation:
2) Arrange the following information to complete the statement of cash flows for
Guangke Co. Place brackets around those money amounts representing cash
outlays. (18 points)
Purchases of marketable securities
50 000 yuan
Proceeds from sales of marketable securities 100 000
Interest and dividends received 10 000
Taxes paid 30 000
Interest paid 30 000
Dividends paid 20 000
Proceeds from short-term borrowing 30 000
Payments to settle short-term 35 000
Cash received from customers 790 000
Cash paid to suppliers and employees 540 000
Proceeds from issuing capital stock 125 000
Purchases of plant assets 340 000
Proceeds from sales of plant assets 40 000
Guangke Co.
Statement of Cash Flows
For the Year Ended December 31, 2003
Cash flows from operating activities:
Cash disbursed for operating activities
Net cash flow from operating activities
Cash flow from investing activities:
Net cash used by investing activities
Cash flows from financing activities:
Net cash provided by financing activities
Net increase (decrease) in cash
___________ yuan
___________
___________
___________
___________ yuan
___________ yuan
___________
___________
___________
___________ yuan
___________ yuan
___________
___________
___________
___________
___________ yuan

3) Given below are comparative balance sheets and an income statement for ABC
Corporation:
ABC Corporation
Balance Sheets Current Year
End
Beginning
Cash 21 000 yuan 20 000 yuan
Accounts Receivable 74 000 70 000
Inventory 55 000 65 000
Equipment (net) 110 000 120 000
260 000 275 000
Accounts Payable 37 000 43 000
Dividends Payable 13 000 17 000
Capital Stock, 10 yuan par 100 000 100 000
Retained earnings 110 000 115 000
260 000 275 000
ABC Corporation
Income Statement for the Current Year
Sales
360 000 yuan
COGS 216 000
Operating Expenses 90 000
Income before income taxes 54 000
Income taxes 15 000
Net Income 39 000
All sales were made on account. Operating expenses include depreciation of 10
000 yuan. Cash dividends declared during the year totaled 44 000 yuan. Compute
the following: (20 points)
a. Average accounts receivable turnover _______ times
Computation:
b. Average inventory turnover _______ times
Computation:
c. Earnings per share of capital stock _______ yuan
Computation:
d. Book value per share of capital stock at year-end _______ yuan
Computation:

e. Current ratio at year-end _____ to ____
Computation:
f. Working capital provided by operations _______ yuan
Computation:
g. Working capital used for dividends _______ yuan
Computation:
h. Cash dividends paid during the year _______ yuan
Computation:
i. Cash collected from customers _______ yuan
Computation:
j. Cash paid to merchandise creditors _______ yuan