A GUI design elements is a combination of technology and equipment to provide users with a platform that allows users to interact with it. A series of GUI components follow a visual language to represent the information stored in the computer. The most common elements include a combination of components such as model WIMP (window, icon, menu, pointing device) in the personal computer. 1. (TCO A) An advantage of the corporate form of business is that _____. (Points : 5) it has limited life its owner's personal resources are at stake its ownership is easily transferable via the sale of shares of stock it is simple to establish 2. (TCO A) When a corporation distributes a dividend, _____. (Points : 5) the most common form of distribution is a cash dividend the Dividends account will be increased with a credit the Retained Earnings account will be directly increased with a debit the Dividends account will be decreased with a debit 3. (TCOs A, B) Below is a partial list of account balances for Denton Company: Cash $7,000 Prepaid insurance 700 Accounts receivable 3,500 Accounts payable 2,800 Notes payable 4,200 Common stock 1,400 Dividends 700 Revenues 21,000 Expenses 17,500 What did Denton Company show as total credits? (Points : 5) $30,100 $29,400 $28,700 $30,800 4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5) sales under $1,000,000 no accountants on staf insignificant receivables and payables all sales and purchases on account 5. (TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the lowest amount of income tax expense? (Points : 5) FIFO LIFO The average cost method Income tax expense for the period will be the same under all assumptions. 6. (TCOs A, E) Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5) $14,160 $11,760 $9,840 $9,600 7. (TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 96. The journal entry to record the issuance will show a _____. (Points : 5) debit to Cash of $500,000 credit to Discount on Bonds Payable for $20,000 credit to Bonds Payable for $480,000 debit to Cash for $480,000 8. (TCO C) Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the efect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points : 5) $120,000 $125,000 $155,000 $115,000 9. (TCO F) Which one of the following is not a tool in fin.

1. A GUI design elements is a combination of technology and
equipment to provide users with a platform that allows users to
interact with it. A series of GUI components follow a visual
language to represent the information stored in the computer.
The most common elements include a combination of
components such as model WIMP (window, icon, menu,
pointing device) in the personal computer.
1. (TCO A) An advantage of the corporate form of business is
that _____. (Points : 5)
it has limited life
its owner's personal resources are at stake
its ownership is easily transferable via the sale of shares of
stock it is simple to establish
2. (TCO A) When a corporation distributes a dividend, _____.
(Points : 5)
the most common form of distribution is a cash dividend the
Dividends account will be increased with a credit
the Retained Earnings account will be directly increased with a
debit the Dividends account will be decreased with a debit
3. (TCOs A, B) Below is a partial list of account balances for
Denton Company:
Cash $7,000
Prepaid insurance 700
Accounts receivable 3,500

2. Accounts payable 2,800
Notes payable 4,200
Common stock 1,400
Dividends 700
Revenues 21,000
Expenses 17,500
What did Denton Company show as total credits? (Points : 5)
$30,100 $29,400 $28,700 $30,800
4. (TCOs B, E) A small and private company may be able to
justify using a cash basis of accounting if it has _____. (Points :
5)
sales under $1,000,000 no accountants on staf
insignificant receivables and payables all sales and purchases
on account
5. (TCO D) In a period of increasing prices, which inventory
cost flow assumption will result in the lowest amount of income
tax expense? (Points : 5)
FIFO
LIFO
The average cost method
Income tax expense for the period will be the same under all

3. assumptions.
6. (TCOs A, E) Equipment was purchased for $60,000. Freight
charges amounted to $2,800 and there was a cost of $8,000 for
building a foundation and installing the equipment. It is
estimated that the equipment will have a $12,000 salvage value
at the end of its 5-year useful life. Depreciation expense each
year using the straight-line method will be _____. (Points : 5)
$14,160 $11,760 $9,840 $9,600
7. (TCOs D, G) Lopez Corporation issues 500 ten-year, 8%,
$1,000 bonds dated January 1, 2007, at 96. The journal entry to
record the issuance will show a _____. (Points : 5)
debit to Cash of $500,000
credit to Discount on Bonds Payable for $20,000 credit to
Bonds Payable for $480,000
debit to Cash for $480,000
8. (TCO C) Accounts receivable arising from sales to customers
amounted to $35,000 and $40,000 at the beginning and end of
the year, respectively. Income reported on the income statement
for the year was
$120,000. Exclusive of the efect of other adjustments, the cash
flows from operating activities to be reported on the statement
of cash flows is _____. (Points : 5)
$120,000 $125,000 $155,000 $115,000
9. (TCO F) Which one of the following is not a tool in financial
statement analysis? (Points : 5)
Horizontal analysis

4. Circular analysis
Vertical analysis
Ratio analysis
10. (TCO F) In vertical analysis, the base amount for studying
salary and wages expense is generally _____. (Points : 5)
net sales
salary and wages expense in a previous year gross profit
net income
11. (TCO F) Ratios are most useful in identifying _____.
(Points : 5)
trends diferences causes
relationships among diferent numbers
12. (TCO F) A common measure of liquidity is _____. (Points :
5)
return on assets current ratio profit margin debt to equity
13. (TCO F) Return-on-assets ratio is most closely related to
_____. (Points : 5)
profit margin and debt-to-total-assets ratio profit margin and
asset-turnover ratio
times interest earned and debt-to-stockholders equity ratio
profit margin and free cash flow
14. (TCO G) To calculate the market value of a bond, we need
to _____. (Points : 5)

5. find out the present value of all of the future cash payments
promised by the bond calculate the present value of the
principal only
calculate the present value of the interest only multiply the
bond price by the interest rate
1. (TCO A) Below you will find selected information (in
millions) from Coca-Cola Co.’s 2012 Annual Report:
Income Taxes Payable
$471
Short-term Investments
8,109
and Marketable
Securities
Cash
8,442
Other non-current
10,449
Liabilities
Common Stock
1,760
Receivables
4,812
Other Current Assets
2,973
Long-term Investments

6. 10,448
Other Non-current Assets
3,585
Property, Plant and
23,486
Equipment
Trademarks
6,527
Other Intangible Assets
20,810
Allowance for Doubtful
53
Accounts
Accumulated
9,010
Depreciation
Accounts Payable
8,680
Short Term Notes
17,874
Payable
Prepaid Expenses
2,781
Other Current Liabilities
796
Long-Term Liabilities
14,736
Paid-in-Capital in Excess
11,379
of Par Value

7. Retained Earnings
55,038
Inventories
3,264
Treasury Stock
35,009
Other information taken from the Annual Report:
Sales Revenue for 2012
$48,017
Cost of Goods Sold for 2012
19,053
Net Income for 2012
9,019
Inventory Balance on 12/31/11
3,092
Net Accounts Receivable Balance on 4,920 12/31/11
Total Assets on 12/31/11
79,974
Equity Balance on 12/31/11
31,921
Required:
1. Using the information provided prepare a Balance Sheet.
Separate the current assets from non-current assets and provide
a total for each. Also separate the current liabilities from the
non-current liabilities and provide a total for each.
2. Using the Balance Sheet from your answer above calculate;
Current Ratio, Days in Inventory, Average Collection Period,

8. Return on Assets Ratio, Debt to Total Assets and Return on
common stockholders’ equity ratio. (Make sure to show all your
work)
(Points : 36)
1) Coca Cola Balance sheet
As of December 31, 2012
(in
millions)
Assets
Current Assets
Cash
8,442
Short-term Investments and Marketable Securities
8,109
Accounts Receivables
4,812
Less: Allowance for doubtful Accounts
(53)
4,759
Inventory
3,264
Prepaid Expenses

9. 2,781
Other Current Assets
2,973
Total Current Assets
30,328
Long term Investments
10,448
Property, Plant and Equipment
23,486
Less: Accumulated Depreciation
(9,010)
Property, Plant and Equipment, Net
14,476
Intangible Assets
Trademarks
6,527
Other Intangible Assets

10. 20,810
Total Intangibles
27,337
Other
Other Non Current Assets
3,585
Total Non-Current Assets
55,846
Total Assets
86,174
Liabilities and stockholder's equity
Current Liabilities
Short term Notes Payable
17,874

11. Accounts Payable
8,680
Income taxes payable
471
Other curent liabilities
796
Total current liabilities
27,821
Long Term Debt
Long term liabilities
14,736
Other non curent liabilities
10,449
Total Long term liabilities
25,185
Total liabilities
53,006

12. Stockholder's equity
Common Stock
1,760
Paid-in-Capital in excess of par
11,379
Retained Earnings
55,038
Total paid in capital and retained earnings
68,177
Less: Treasury stock

13. (35,009)
Total equity
33,168
Total liabilities & Stockholder's equity
86,174
2)
Current ratio =
Current assets
Current Liabilities

14. 30,328
27,821
1.09
: 1
Inventory turnover
Cost of goods sold
Average Inventory

15. 19,053
3,178
6.00
Days in inventory
365
Inventory turnover

16. 365
6.00
61
days
Receivables turnover
Net Sales

17. Average Accounts receivables
48,017
4,840
9.92
Average collection period
365
Receivables turnover
365
9.92
37
days

18. Net
Return on assets=
income
Average Total Assets
9,019
83,074
10.9%
Total
Debt to total assets
Debts

19. Total
Assets
53,006
86,174
61.5%
Return on common stockholder's equity
Net income after Tax - Preferred dividends
Average Stockholder's equity
9,019
32,545
27.7%
2. (TCO B) The following selected data was retrieved from the
Wal-Mart, Inc. financial statements for the year ending January

20. 31, 2013:
Accounts Payable
$38,080
Accounts Receivable
6,768
Cash
7,781
Common Stock
3,952
Cost of Goods Sold
352,488
Income Tax Expense
7,981
Interest Expenses
2,064
Membership Revenues
3,048
Net Sales
466,114
Operating, Selling and
88,873
Administrative Expenses
Retained Earnings
72,978
Required:
Using the information provided above:
1. Prepare a multiple-step income statement

21. 2. Calculate the Profit Margin, and Gross profit rate for the
company. Be sure to provide the formula you are using, show
your calculations, and discuss your findings/results.
(Points : 36)
1) Wal-Mart Inc. Income statement
For the year ending January 31, 2013
Revenues
Net Sales
466,114
Cost of Goods sold
352,488
Gross Profit
113,626
Operating Expenses:
Operating , selling and Administrative expenses
88873
Income from operations
24,753
Other revenues and gains
Membership revenues
3,048

22. Other expenses and losses
Interest Expense
(2,064)
Net gain or losses from other activities
984
Income before taxes
25,737
Income tax expense
7981
Net Income
17,756

23. 2) Profit Margin
Net Income
Net Sales
17,756
466,114
3.81%
Gross profit rate
Gross profit

24. Net Sales
113,626
466,114
24.4%
The gross profit rate is 24.4% while the net profit margin is
3.81%. The net profit margin is very low as compared to the
gross profit rate. It implies that the operating expenses
of the company are very high and it needs to be controlled.
3. (TCO C) Please review the following real-world Hewlett
Packard Statement of Cash flows and address the 2 questions
below:
Cash flow from
operating activities
In millions
In millions
For the year ended 2012
For the year ended 2011
Net (loss) earnings
$(12,650)
$7,074
Depreciation and
5,095

25. 4,984
amortization
Impairment of goodwill
18,035
885
and purchased intangible
assets
Stock-based
635
685
compensation expense
Provision for doubtful
142
81
accounts
Provision for inventory
277
217
Restructuring charges
2,266
645
Deferred taxes on
(711)
166
earnings

26. Excess tax benefit from
(12)
(163)
stock-based competition
Other, net
265
(46)
Accounts and financing
1,269
(227)
receivables
Inventory
890
(1,252)
Accounts payable
(1,414)
275
Taxes on earnings
(320)
610
Restructuring
(840)
(1,002)
Other assets and liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Investment in property, plant, and equipment

27. Proceeds from sale of property, plant, and equipment
Purchases of available-for-sale securities and other investments
Maturities and sales of available- for-sale securities and other
investment
(2,356)
(293)
10,571
12,639
(3,706)
(4,539)
617
999
(972)
(96)
662
68
Payments in connection with business acquisitions, net of cash
acquired
Proceeds from business divestiture, net
Net cash used in investing activities
Cash flow from financing activities:
(Payments) issuance of commercial paper and notes payable, net
Issuance of debt
Payment of debt

28. (141)
(10,480)
87
89
(3,453)
(13,959)
(2,775)
(1,270)
5,154
11,942
(4,333)
(2,336)
Issuance of common
716
896
stock under employee
stock plans
Repurchase of common
(1,619)
(10,117)
stock
Excess tax benefit from
12
163
stock-based

29. compensation
Cash dividends paid
(1,015)
(844)
Net cash used in
(3,860)
(1,566)
financing activities
Increase (decrease) in
3,258
(2,886)
cash and cash
equivalents
Cash and cash
8,043
10,929
equivalents at beginning
of period
Cash and cash
$11,301
$8,043

30. equivalents at end of
period
Required:
1) Please calculate the percentage increase or decrease in cash
for the operating, investing, and financing sections and explain
the major reasons for the increase or decrease for each of these
sections.
2) Please calculate the free cash flow for 2012 and explain the
meaning of this ratio.

31. (Points : 36)
1) Hewlett Packard Statement Statement of Cash flows
In millions
For the year ended 2012
For the ye
Cash flow from operating activities
Net (loss) earnings
($12,650)
Depreciation and amortization
5,095
Impairment of goodwill and purchased intangible assets
18,035
Stock-based compensation expense
635
Provision for doubtful accounts
142
Provision for inventory
277
Restructuring charges
2,266
Deferred taxes on earnings
-711
Excess tax benefit from stock-based competition
-12
Other, net
265
Accounts and financing receivables
1,269
Inventory

32. 890
Accounts payable
-1,414
Taxes on earnings
-320
Restructuring
-840
Other assets and liabilities
-2,356
Net cash provided by
operating activities
10,571
Cash flows from investing activities:
Investment in property, plant, and equipment
-3,706
Proceeds from sale of property, plant, and equipment
617

33. Purchases of available-for-sale securities and other investments
-972
Maturities and sales of available-for-sale securities and other
662
investment
Payments in connection with business acquisitions, net of cash
-141
acquired
Proceeds from business divestiture, net
87
Net cash used in investing
activities
-3,453
Cash flow from financing activities:
(Payments) issuance of commercial paper and notes payable, net
-2,775
Issuance of debt
5,154
Payment of debt
-4,333
Issuance of common stock under employee stock plans
716

34. Repurchase of common stock
-1,619
Excess tax benefit from stock-based compensation
12
Cash dividends paid
-1,015
Net cash used in financing activities
-3,860
Increase (decrease) in cash and cash equivalents
3,258
Cash and cash equivalents at beginning of period
8,043
Cash and cash equivalents at end of period
$11,301
The net decrease in operating cash flows is $2068 in year 2012
as compared to year 2011. This is majorly due The net working
capital has increased during the year 2012. Further payment
against the deferred taxes has le increased
The net cash used for operating activities has come down from
$13,959 to $3,453. The outflow for business ac
The net increase in net cash used for financing activities is
$2,294. The major reason for them is inflow against to the year
2011. Further the payment for commercial paper and debt is
high in year 2012 as compared to the

35. 2) Free cash flow = Cash flow from operation (CFO) - capital
expenditure - Dividends
Cash flow from operation (CFO)
10,571
capital expenditure
-3,847
Dividends
-1,015
Free cash flow
5,709
Free cash flow refers to the cash flow available to the business
after making payment necessary for maintaing
4. (TCO D) You are CFO of Goforit, Inc., a wholesale
distribution company specializing in emerging technologies.
Your CEO is a brilliant marketer, but relies on you to explain
issues and choices in accounting and finance. She has heard
from other members of a CEO organization to which she
belongs that a company’s net income can vary widely depending
on which accounting choices are made from the “GAAP menu.”
Assuming the goal is to maximize net income, choose an
accounting treatment from each of the following scenarios, and
explain to your CEO why the choice will produce the desired
effect on reported Net Income for the current year. Include in
your answer the effect of the choice on both the income
statement and balance sheet.
Required:
a. Goforit carries significant electronics inventory in a
competitive environment where prices are actually falling.
Which inventory valuation method would you choose—LIFO,
FIFO, or average cost? Assume that unit purchases exceed unit
sales.

36. b. Goforit has a large investment in warehouse equipment
including conveyor belts, forklifts, and automated packaging
systems. Which depreciation method would you choose: Straight
line (SL) or double declining balance (DDB)?
(Points : 36)
A. In this scenario I would use FIFO. The only way to battle
failing costs is to get the newer merchandise out the door
quicker before it depreciates faster that what the cost is, thus
making negative profit on the merchandise. Merchandise that
has already been in stock for a longer period has already
deprecated affecting the balance and income statements, so
battle this by making as much profit as possible on the incoming
merchandise.
B. I would use the straight line depreciation method that factors
in the salvage value after x numbers of years of use. If the
company would use the DDB, then it ignores the salvage value,
so if the equipment in question book value drops below the
salvage value, there would be a negative benefit to the company
in trying to sell or replace the equipment.
5. (TCO F) Please review the following real-world ratios for
Johnson & Johnson and Pfizer for the year ended 2012 and
address the 2 questions below.
Ratio Name
Johnson & Johnson
Pfizer
Profit margin

37. 16.1%
24.7%
Inventory turnover ratio
3.1
1.7
Average collection
59.4 days
69.1 days
period
Cash debt coverage ratio
.27
.16
Debt to Total assets
46.6%
127.5%
Required:
1) Please explain the meaning of each of the Pfizer ratios above.
2) Please state which company performed better for each ratio.
(Points : 36)
1) The profit margin of Pfizer is 24.7%. It is a profitability
measure and it implies that for every one dollar of revenue
generated the company has made a profit of 25 cents. The
inventory turnover ratio indicates that the company has sold or
replaced its inventory 1.7 times during the year. The average
collection period suggests that the company takes 69.1 days to
collect its payments from its sales on account. The company has
a cash debt coverage ratio of .16 times. It implies that the cash
provided by the operating activities are .16 times of the average
liabilities of the company and it has a sufficient cushion to
repay its liabilities out of the cash generated from the operating

38. activities without having to liquidate its assets used in the
operations. The debt to total assets is 127.5% of the total assets.
It indicates that 127.5% of its total assets are financed through
debt.
2) The profit margin of Pfizer is better than that of J&J. Pfizer
has higher profitability. The inventory turnover of Pfizer is low
compared to that of J&J. It means that the inventory of Pfizer is
not being sold quickly. The average collection period of J&J is
lower than that of Pfizer. It implies that J&J is making more
timely collection of its accounts as compared to Pfizer. The
cash debt coverage ratio of J&J is better than that of Pfizer. The
debt to total assets ratio of Pfizer is abnormal. J&J’s debt to
total assets is comfortable and better than that of Pfizer.
Basically the graphic UI design elements include lines, images,
shapes, text, color, and space. A design may look attractive if it
is designed perfectly and have a good creative concepts. The
beauty of graphic design consideration and focus more on the
ability to recognize the eyes. In order for the work to be
attracted, the graphic design elements can have the touch,
effects