Toft Co. had 120,000 shares of common stock outstanding at January 1. On April 1, it issued 40,000 additional shares of common stock. Outstanding all year were 10,000 shares of nonconvertible preferred stock on which a dividend of $5 per share was declared during the year. Net income for the year was $480,000. What should Toft report as earnings per share for the year?

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$2.69
$2.87
$3.00
$3.20

Box, a nongovernmental not-for-profit organization, had the following transactions during the year:

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Proceeds from sale of investments $80,000
Purchase of property, plant and equipment $10,000
Proceeds from long-term debt $100,000
Loss on sale of investment $5,000

What amount should be reported as net cash provided by financing activities in Box’s statement of cash flows?

$70,000
$75,000
$80,000
$100,000

Zokro, a nongovernmental not-for-profit organization, uses the indirect method to prepare its statement of cash flows. In determining its net cash provided (used) by operating activities, Sokro must add back which of the following to the change in net assets?

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Purchase of equipment.
Payment on long-term debt.
Depreciation.
Decrease in accounts payable

The primary purpose of a not-for-profit organization’s statement of activities is to provide relevant information to its

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Resource providers.
Managers.
Beneficiaries.
State regulatory body

Strut Co. has a payable to its parent, Plane Co. In which of the following balance sheets should this payable be reported separately?

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Strut’s Plane’s consolidated
balance sheet balance sheet

Yes Yes
Yes No
No Yes
No No

Ace Co. issued 1,000 shares of its $10 par value common stock for $15 per share in cash. How should this transaction be reported in Ace’s statement of cash flows for the year of issuance?

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$15,000 cash inflow from financing activities.
$10,000 cash inflow from financing activities and $5,000 adjustment to arrive at cash flows from operating activities.
$15,000 cash flow from investing activities.
$10,000 cash flow from investing activities and $5,000 adjustment to arrive at cash flows from operating activities.

During the year, Verity Co. purchased $200,000 of Otra Co. bonds at par and $50,000 of U.S. Treasury bills. Verity classified the Otra bonds as available-for-sale securities and the Treasury bills as cash equivalents. In Verity’s statement of cash flows, what amount should it report as net cash used in investing activities?

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$0
$150,000
$200,000
$250,000

During the current year, Cooley Co. had an unrealized gain of $100,000 on a debt investment classified as available-for-sale. Cooley’s corporate tax rate is 25%. What amount of the gain should be included in Cooley’s net income and other comprehensive income at the end of the current year?

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Net income Other comprehensive income

$100,000 $0
$75,000 $25,000
$25,000 $75,000
$0 $75,000

Accrual accounting involves accruals and deferrals. Which of the following best describes accruals and deferrals?

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Accruals are concerned with expected future cash receipts and payments, while deferrals are concerned with past cash receipts and payments.
Accruals are concerned with past cash receipts and payments, while deferrals are concerned with expected future cash receipts and payments.
Both accruals and deferrals are concerned with expected future cash receipts and payments.
Both accruals and deferrals are concerned with past cash receipts and payments

Which of the following is an essential element of the audit trail in an electronic data interchange (EDI) system?

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An integrated test facility that verifies the accuracy of data.
A heuristic program that accesses remote locations.
Hardware security modules that store sensitive data.
Computer activity logs that indicate failed transactions