Cash Flows and Time Value of money

Practice Quiz
Question 1
On January 1, 2003, Charlie deposited $14,000 into a savings account that pays 12% interest compounded quarterly.
Calculate the amount Charlie will have in his account at December 31, 2008. Do not use decimals in your answer.
Use the time value of money factors (attached document 2) to answer this question. To access these factors,
click on content and then scroll to the bottom and click on the link labeled present & future value table
factors. No credit will be awarded for this question using a means other than these table factors to answer this
question.
Question 2
The following selected account balances were taken from Buckeye Company's general ledger at January 1, 2005 and
December 31, 2005:
January 1, 2005
Accounts receivable 42,000
Inventory
25,000
Accounts payable
35,000
Interest payable
3,000
Investments
36,000
Land
60,000
Mortgage payable 100,000
Common stock
110,000
Retained earnings
20,000

December 31, 2005
36,000
28,000
31,000
9,000
55,000
80,000
50,000
130,000
38,000

The following information was taken from Buckeye Company's 2005 income statement:
Sales revenue
$420,000
Cost of goods sold
300,000
Interest expense
90,000
Gain on sale of investments
2,000
Net income
$ 32,000
Calculate the amount of cash paid to creditors for interest during 2005. Do not use decimals
in your answer.
Question 3
XYZ Company collected $450,000 cash from its customers during 2004. Accounts receivable at January 1, 2004
totaled $41,000 and accounts receivable at December 31, 2004 totaled $56,000. Calculate the sales revenue reported
by XYZ Company in its 2004 income statement. Do not use decimals in your answer.
Question 4
Sandy Beach purchased an investment contract on January 1, 2006. The investment will pay Sandy $5,000 at the
end of every year for the years 2006 - 2012. The investment will pay Sandy $10,000 at the end of 2013 and will pay
Sandy $20,000 at the end of 2014.
Calculate the total present value of all payments received by Sandy from this contract assuming the interest rate
is 8% compounded annually. Do not use decimals in your answer.
Use the time value of money factors posted on carmen to answer this question. To access these factors, click
on content and then scroll to the bottom and click on the link labeled present & future value table factors. No
credit will be awarded for this question using a means other
than these table factors to answer this question .
Question 5

The balance sheets for ABC Company at January 1, 2007 and December 31, 2007 are given below:
January 1, 2007

December 31, 2007

ASSETS
Cash
35,000
?
Accounts receivable
?
97,000
Inventory
?
57,000
Land
80,000
90,000
Equipment
180,000
230,000
Accumulated depreciation <27,000>
<41,000>
LIABILITIES + EQUITY
Accounts payable
26,000
Short-term notes payable 40,000
Income taxes payable
11,000
Common stock
?
Retained earnings
213,000

51,000
45,000
?
135,000
253,000

The following information was taken from ABC Company's 2007 statement of cash flows:
Net cash flow from operating activities 85,000
Net cash flow from investing activities <60,000>
Net cash flow from financing activities <5,000>
Net change in cash
20,000
During 2007, ABC Company reported a cost of goods sold of $170,000, cash paid to suppliers for purchases of
inventory of $118,000, and a net income of $57,000.
Calculate the balance in the income taxes payable account at December 31, 2007. Do not use decimals in your
answer.
Question 6
The balance sheets for ABC Company at January 1, 2007 and December 31, 2007 are given below:
January 1, 2007

December 31, 2007

ASSETS
Cash
35,000
?
Accounts receivable
?
97,000
Inventory
?
57,000
Land
80,000
90,000
Equipment
180,000
230,000
Accumulated depreciation <27,000>
<41,000>
LIABILITIES + EQUITY
Accounts payable
26,000
Short-term notes payable 40,000
Income taxes payable
11,000
Common stock
?
Retained earnings
213,000

51,000
45,000
?
135,000
253,000

The following information was taken from ABC Company's 2007 statement of cash flows:
Net cash flow from operating activities 85,000
Net cash flow from investing activities <60,000>
Net cash flow from financing activities <5,000>
Net change in cash
20,000

During 2007, ABC Company reported a cost of goods sold of $170,000, cash paid to suppliers
for purchases of inventory of $118,000, and a net income of $57,000.
Calculate the balance in the inventory account at January 1, 2007. Do not use decimals in your answer.
Question 7
The balance sheets for ABC Company at January 1, 2007 and December 31, 2007 are given below:
January 1, 2007

December 31, 2007

ASSETS
Cash
35,000
?
Accounts receivable
?
97,000
Inventory
?
57,000
Land
80,000
90,000
Equipment
180,000
230,000
Accumulated depreciation <27,000>
<41,000>
LIABILITIES + EQUITY
Accounts payable
26,000
Short-term notes payable 40,000
Income taxes payable
11,000
Common stock
?
Retained earnings
213,000

51,000
45,000
?
135,000
253,000

The following information was taken from ABC Company's 2007 statement of cash flows:
Net cash flow from operating activities 85,000
Net cash flow from investing activities <60,000>
Net cash flow from financing activities <5,000>
Net change in cash
20,000
During 2007, ABC Company reported a cost of goods sold of $170,000, cash paid to suppliers for purchases of
inventory of $118,000, and a net income of $57,000. Calculate the balance in the common stock account at
January 1, 2007. Do not use decimals in your answer.
Question 8:
On January 1, 2008, ABC Company borrowed $200,000 from the bank. The loan is a 10-year note payable that
requires semi-annual payments of $18,000 every June 30 and December 31, beginning June 30, 2008. Assume the
loan has a 10% interest rate, compounded semi-annually. Calculate the amount of the note payable at December 31,
2008 that would be classified as a current liability. Do not use decimals in your answer.