Problem 1: A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable. The entire transaction is disclosed to users on the statement of cash flows and/or in its notes
a. true
b. false
Problem 2: A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days.
a. true
b. false
Problem 3: A company reports basic earnings per share of $3.50, cash dividends per share of $0.75, and a market price per share of $64.75. The company's dividend yield equals 21.4%
a. true
b. false
Problem 4: A company's sales in 2007 were $250,000 and in 2008 were $287,500. Using 2007 as the base year, the sales trend percent for 2008 is_____________
The direct method of reporting operating cash flows
a. Is recommended but not required by the FASB.
b. Must be used by all companies.
c. Is used by most companies.
d. Is considered supplementary disclosure.
e. Is not recommended by the FASB, but is commonly used.