FIN621 - Financial Statement Analysis Current Midterm Papers

CURRENT PAPER OF FIN-621 DATED 12-05-2011
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QUESTION:
What is the difference between expense and expenditure? (3)
Question:
What is the principle advantage of using direct method of cash flow statement? (3)
Question:
Why should company prefer to use LIFO instead of FIFO?
QUESTION:
Complete the table :
sales Beginning inventory Net purchases Ending inventory Cost of good sold Gross profit Operating expenses Net income
300,000 95,000 130,000 44000 ? 119,000 90000 ?
600,000 90,000 340,000 ? 330,000 ? ? 25000
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Question:
Classify the following activities as cash flow from operating, investing and financing activities

1.proceed from issuing shares
2.interest received on loans
3.repayment of debt principal,capital lease
4.loans made and acquired of other firm’s debt
5.divinded received from scurities.
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Total questions 27
Mcqs 22 1 mark
3 short questions 3 marks
2 long questions 5 marks
Is depreciation a source of fund or not? Give reasons (3)
How cash dividend effect our financial statements (3)
Income statement or cash flow statement which among these give better profitability? Give reason(3)
Calculate Net cash flow from from operating activities using Direct method. (5)
Rs.
a- Cash received from customers --
b- Interest and dividend received --
c- Proceed from sale of Plant --
d- Cash paid to suppliers&Employees --
e- Cash paid for purchase of Investment --
f- Cash paid for purchase of Treasury Stock --
On march 29,1998 Global co. purchased new equipment costing 100,000. Its estimated life is 5 years and Paper copy from virtual position dot forumotion dot net residual value 10,000. For income tax purpose this is classified as a 5-year property and has a depreciation rate rate of 40%. (5)
Required:
Compute annual depreciation expense for each year until equipment is fully depreciated using 200% declining method, with half year convention.(limit the depreciation expense to year 2003)
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