Question 1

During the quarter ended 3/31/2015, Clarke Biscuits Inc. collected $100 of cash from customers,
paid $60 of cash to suppliers, paid $30 of cash to employees and other creditors, and recorded a $5
loss on sale of equipment. There were no other cash flows related to operating activities.
What was Clarke’s Cash Flow from Operations during the quarter ended 3/31/2015?

$10
$15
$25
$20
$5

Question 2
During 2015, Rindal Vinyards Inc. had Revenue of $1000, Depreciation and Amortization Expense of
$100, Interest Expense of $100, and Tax Expense of $50. All other Expenses were $400. What was
Rindal Vinyards’ EBITDA for 2015?
$400
$1000
$600
$250
$500

Question 3
Geller Florist Inc. had the following transactions during 2015:

Purchased a $200,000 warehouse with $50,000 cash and a $150,000 mortgage from a bank.
Raised $100,000 from selling new shares of stock to investors. The cash was used to buy land to
grow tulips.
Sold an old building for $50,000 (and suffered a loss on sale of $5,000) and used the cash to buy
a new truck.
What is the net impact of these transactions on Geller's Cash from Financing Activities
during 2015?
 $350,000
$150,000
$250,000
$100,000
$300,000

Question 4
Stewart Export Co. had the following Statement of Cash Flows for the year ended 03/31/15:

($ millions) Year ended 3/31/15

Net Income 1100
Depreciation 200
Loss on sale of equipment 400
Chg in Accounts Receivable 350
Chg. in Inventory (200)
Chg in Other Current Assets 100
Chg. in Accounts Payable (50)
Chg. in Other Payables 150
Net Cash from Operations 2050

Capital Expenditures (1200)

Sale of Equipment 700
Net Cash from Investing (500)
What was the book value of the equipment Stewart sold during the year ended 03/31/15?

$1,300
$700
$300
$100
$1,100

Question 5
Little Scuba Pty had the following line item on its 12/31/2014 Balance Sheet:

12/31/2014
Accounts Payable $10,000
Little Scuba’s Statement of Cash Flows had the following line item:
2014
Change in Accounts Payable $4,000
Assume that the company made no acquisitions or divestitures and that all operations are in
Australia. How much Accounts Payable did Little Scuba have on12/31/2013?

$6,000
$14,000
$10,000
$4,000
$0

Question 6
A new accountant, Tia Count, put together a preliminary version of Medina Co.'s financial
statements. Medina's Net Income was $500, its Depreciation Expense was $100, and its Cash Flow
from Operations was $70. The CEO found an error that Tia made in computing straight-line
Depreciation Expense, which should have been $150. What is Medina's Cash Flow from Operations
after fixing this mistake? (you can ignore taxes)
$70
$350
$220
$120
$50

Question 7
Josey Doakes was reading the balance sheet of Gogoldze Inc. when she spilled grape juice on it.
After the juice spill, the balance sheet looked like this:

($ millions) 12/31/2015
Cash 90
Accounts Receivable 210
Inventory 410
Other Current Assets grape
 Current Assets juice
Net Property, Plant, & Equipment 1,080
Total Assets grape
juice
Accounts Payable 115
Other Current Liabilities 260
Current Liabilities 375
Long-term Liabilities 860
Common Stock 50
Additional Paid-in-Capital 300
Retained Earnings 285
Total Liabilities and SE 1,870
What was Gogoldze Inc.'s Other Current Assets at 12/31/2015?

$120
$370
$790
$710
$80

Question 8
Francisco Olivas of Olivas Medical Supply Company was reading the financial statements of Alvear
Corp. to decide whether he wanted to try to acquire the company. He noticed some mistakes in the
Alvear Corp. Income Statement:

($ millions) Year ended 12/31/15

Sales revenue $1200
Gain on sale of equipment &nbsp 200
Total Revenue 1400
Cost of Goods Sold (800)
Gross Profit 600
SG&A Expense (400)
Interest Expense (50)
Operating Income 150
Interest Revenue 20
Pre-tax income 170
Income Tax Expense (61)
Net Income 109
What is Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the
mistakes?

$170
($30)
$200
$0
($50)