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Excel crash course exam from wall street prep wall street prep questions and answers updated 2024 $13.99   Add to cart

Exam (elaborations)

Excel crash course exam from wall street prep wall street prep questions and answers updated 2024

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  • EXCEL CRASH COURSE FROM WALL STREET PREP
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  • EXCEL CRASH COURSE FROM WALL STREET PREP

Excel crash course exam from wall street prep wall street prep questions and answers updated 2024

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  • August 15, 2024
  • 48
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • EXCEL CRASH COURSE FROM WALL STREET PREP
  • EXCEL CRASH COURSE FROM WALL STREET PREP
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lOMoARcPSD|5734770




Excel Crash Course Exam from Wall m m m m m




m Street Prep - Wall Street Prep Questions m m m m m m




And Answers Updated 2024 m m m m




lOMoARcPSD|5734770




Wall Street Prep The Premium Package
m m m m m




Review: Accounting & Financial Statement m m m m




Analysis Exam.
m m




Score: 95%, 38 correct out of 40
m m m m m m




Question 1 m




Assume US GAAP to answer this question.
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In 2017, $2 million in wages were earned and no cash wages were paid. In
m m m m m m m m m m m m m m


m2018, $8 million in wages were earned and $7 million in cash wages were paid.
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mCash wages were used to first pay wages earned in 2017 with the remainder
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mused to pay wages earned in 2018. Any earned but unpaid wages will be paid
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mduring the first quarter of 2019. Using only the information provided, which of the
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mfollowing statements is most accurate?
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 Liabilities increased by $1.0 million in 2018
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 Liabilities increased by $3.0 million in 2018
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 Assets decreased by $5.0 million in 2018
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 Retained earnings decreased by $10.0 million in 2018
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 Retained earnings decreased by $7.0 million in 2018
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 Your answer is correct.
m m m




Since wages were earned in 2017 but not yet paid, the opening balance sheet in
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2018 would have an accrued wages liability of $2.0. These were paid in 2018,
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reversing the liability. However, since there is only $5.0 million in cash ($7.0 less the
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$2.0 million used to pay 2017 wages) available to pay wages earned in 2018, that
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leaves $3.0 million in earned wages unpaid, raising the accrued wages liability to
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$3.0 million. The net impact to the liability is $1.0 million (-$2.0 + $3 million). The
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only asset impacted is cash, which decreases by $7.0 million, while retained
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earnings decreases by $8.0 million, since wages are expensed when they are
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earned, not when they are paid.
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See Lesson: Payable, Accrued Expenses, Deferred Revenue & Debt
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,Question 2 m oARcPSD|5734770




A company issued its CEO 100,000 shares of restricted stock in the beginning of
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2018 that are restricted for two years. The current share price is $10. Based on
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the information provided, which of the following statements is true?
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 An unearned compensation liability in the amount of $1 million is created at
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the grant date
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 An unearned compensation asset in the amount of $1 million is created at
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the grant date
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 Stockholders' equity increases by $1 million at the grant date m m m m m m m m m



 An unearned compensation contra equity account in the amount of $500,000
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is recognized at the grant date
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Stockholders' equity is unchanged at the grant date m m m m m m m




 Your answer is correct. m m m




The entire value of restricted stock issued at grant date is recognized as an equity
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account and is immediately offset by a contra equity account in the same amount
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so there is no change to stockholders’ equity at the grant date. This contra equity
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account is reversed over the service period. In this case, a $1 million contra equity
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account is created and reduced by $500,000 over the next two years, with an
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offsetting reduction in retained earnings.
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See Lesson: Stock Based Compensation Accounting: Journal Entries
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Question 3 m




A company issued its CEO 100,000 stock options in the beginning of 2018 that will
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vest equally over 2 years. Assume the following:
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The share price at grant date is $10 per share
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The option exercise price is $10 per share
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The fair value of each option at grant date is $5 per share
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No options are exercised until after year 2
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Based only on the information provided, which of the following statements is true?
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 Stockholders' equity increases by $1,000,000 at the grant date m m m m m m m m


 Stockholders' equity increases by $500,000 at the grant date m m m m m m m m


 Stockholders' equity increases by $250,000 at the grant date m m m m m m m m

, lOMoARcPSD|5734770




 Stockholders' equity decreases by $250,000 at the end of year 1
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 Stockholders' equity does not change at the end of year 1
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 Your answer is correct. m m m




No journal entries occur at the grant date. Stock options are expensed as they vest with
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ma corresponding entry in "APIC – Stock options" account. Since both accounts are part
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mof stockholders’ equity, there is no change to stockholders’ equity. No asset or
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mliabilities
are recognized on the grant date.
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See Lesson: Stock Based Compensation Accounting: Journal Entries
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Question 4 m




A company recorded the following activities in 2018:
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$5 million in capital expenditures were made in 2018
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$4 million in depreciation expense was recognized in 2018
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$3 million in affiliate income recognized on the income statement from a
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m25% investment in an affiliate
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$1 million of insurance proceeds were received in cash due to hurricane damage on
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mthe company’s corporate headquarters
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Based only on the information provided, calculate the impact of the activities
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described above on the company’s 2018 operating income and cash flows
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(ignore taxes).
m m




 Operating income decreased by $1.0 million. Cash flows decreased by
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$4.0 million.
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 Operating income decreased by $5.0 million. Cash flows increased by
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$6.0 million.
m m



 Operating income decreased by $4.0 million. Cash flows decreased by
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$4.0 million.
m m



 Operating income decreased by $6.0 million. Cash flows decreased by
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$1.0 million.
m m


 Operating income decreased by $6.0 million. Cash flows decreased by $3.0
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million.
 Your answer is correct. m m m




Only the $4.0 million in depreciation expense impacts operating income.
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Capital expenditures are not recognized on the income statement. Affiliate
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income and
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,

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