Financial Forensics Quiz 1: 29 October 2023 (September 2023 term)

Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for slightly more than four months, and in connection with its dissolution the preparation of a balance sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500, improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of the $16,000. The doors of the café were opened for business shortly after 12 August. One of the things that made this particular piece of property attractive to them was the fact that the building contained suitable living accommodations. One of the rooms was occupied by Mrs. Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to perform this task because she was vitally interested in making the business a success. She had invested the proceeds from the sale of her modest home and from her husband’s insurance policy in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for $35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs necessary for the operation of the bar and would be returned to the Smoky Valley Café after all bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on a major highway, and a great deal of business was obtained from truck drivers. In October, the partners decided that to continue to offer their patrons quality food, they would have to add to their equipment. This new equipment cost $415.95, and because the supplier of the equipment was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the business. She had hopes , however ,that the future would prove to be more profitable.

As on Aug 12^(th), 1946 if a balance sheet is created, what are the total assets and liabilities as on Aug 12^(th) respectively:

Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for slightly more than four months, and in connection with its dissolution the preparation of a balance sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500, improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of the $16,000. The doors of the café were opened for business shortly after 12 August. One of the things that made this particular piece of property attractive to them was the fact that the building contained suitable living accommodations. One of the rooms was occupied by Mrs. Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to perform this task because she was vitally interested in making the business a success. She had invested the proceeds from the sale of her modest home and from her husband’s insurance policy in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for $35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs necessary for the operation of the bar and would be returned to the Smoky Valley Café after all bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on a major highway, and a great deal of business was obtained from truck drivers. In October, the partners decided that to continue to offer their patrons quality food, they would have to add to their equipment. This new equipment cost $415.95, and because the supplier of the equipment was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the business. She had hopes , however ,that the future would prove to be more profitable.

The cash balance as on Aug 12^(th) 1946

Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for slightly more than four months, and in connection with its dissolution the preparation of a balance sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500, improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of the $16,000. The doors of the café were opened for business shortly after 12 August. One of the things that made this particular piece of property attractive to them was the fact that the building contained suitable living accommodations. One of the rooms was occupied by Mrs. Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to perform this task because she was vitally interested in making the business a success. She had invested the proceeds from the sale of her modest home and from her husband’s insurance policy in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for $35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs necessary for the operation of the bar and would be returned to the Smoky Valley Café after all bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on a major highway, and a great deal of business was obtained from truck drivers. In October, the partners decided that to continue to offer their patrons quality food, they would have to add to their equipment. This new equipment cost $415.95, and because the supplier of the equipment was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the business. She had hopes , however ,that the future would prove to be more profitable.

On Aug 15^(th) 1946, there was security deposit of 35$ for beer license. How will it impact the balance sheet:

Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for slightly more than four months, and in connection with its dissolution the preparation of a balance sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500, improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of the $16,000. The doors of the café were opened for business shortly after 12 August. One of the things that made this particular piece of property attractive to them was the fact that the building contained suitable living accommodations. One of the rooms was occupied by Mrs. Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to perform this task because she was vitally interested in making the business a success. She had invested the proceeds from the sale of her modest home and from her husband’s insurance policy in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for $35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs necessary for the operation of the bar and would be returned to the Smoky Valley Café after all bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on a major highway, and a great deal of business was obtained from truck drivers. In October, the partners decided that to continue to offer their patrons quality food, they would have to add to their equipment. This new equipment cost $415.95, and because the supplier of the equipment was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the business. She had hopes , however ,that the future would prove to be more profitable.

In Oct there is new equipment added which costed 415.95$. The total assets on Assets side now will be:

Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for slightly more than four months, and in connection with its dissolution the preparation of a balance sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500, improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of the $16,000. The doors of the café were opened for business shortly after 12 August. One of the things that made this particular piece of property attractive to them was the fact that the building contained suitable living accommodations. One of the rooms was occupied by Mrs. Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to perform this task because she was vitally interested in making the business a success. She had invested the proceeds from the sale of her modest home and from her husband’s insurance policy in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for $35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs necessary for the operation of the bar and would be returned to the Smoky Valley Café after all bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on a major highway, and a great deal of business was obtained from truck drivers. In October, the partners decided that to continue to offer their patrons quality food, they would have to add to their equipment. This new equipment cost $415.95, and because the supplier of the equipment was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the business. She had hopes , however ,that the future would prove to be more profitable.

The cash balance in the balance sheet post the purchase of given equipment will be:

Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for slightly more than four months, and in connection with its dissolution the preparation of a balance sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500, improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of the $16,000. The doors of the café were opened for business shortly after 12 August. One of the things that made this particular piece of property attractive to them was the fact that the building contained suitable living accommodations. One of the rooms was occupied by Mrs. Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to perform this task because she was vitally interested in making the business a success. She had invested the proceeds from the sale of her modest home and from her husband’s insurance policy in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for $35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs necessary for the operation of the bar and would be returned to the Smoky Valley Café after all bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on a major highway, and a great deal of business was obtained from truck drivers. In October, the partners decided that to continue to offer their patrons quality food, they would have to add to their equipment. This new equipment cost $415.95, and because the supplier of the equipment was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the business. She had hopes , however ,that the future would prove to be more profitable.

In November as seen, Mrs Bevan added another 400$, how will it impact the Balance sheet?

What is the primary purpose of a balance sheet in financial accounting?

What financial statement is often used to analyze a company's profitability over a specific period?

Which of the following is an example of an intangible asset that may be reported on a balance sheet?

Which financial statement provides information about a company's cash flows from operating, investing, and financing activities?

At the beginning of the month the company hired workers and employees for a total monthly remuneration of ₹ 75,000 payable at the end of each month. How would this transaction reflect in the income statement and balance sheet at the beginning of the month?

Mr. Steven started a furniture business with ₹ 55,00,000 as capital. 40% of the amount was brought in cash and the remaining was kept in a bank account in the name of the business. What would be the total of assets in the Balance sheet?

All of the following are long-term liabilities except:

Based on the following information, answer the given subquestions.

Alpha Corporation is a manufacturer of furniture. In a recent year, it reported the following activities. Please note that the figures in the parenthesis indicates negative values.

What is the cash flow from operating activities?

Based on the following information, answer the given subquestions.

Alpha Corporation is a manufacturer of furniture. In a recent year, it reported the following activities. Please note that the figures in the parenthesis indicates negative values.

What is the cash flow from financing activities

Based on the following information, answer the given subquestions.

Alpha Corporation is a manufacturer of furniture. In a recent year, it reported the following activities. Please note that the figures in the parenthesis indicates negative values.

What is the cash flow from investing activities

Based on the following information, answer the given subquestions.

Alpha Corporation is a manufacturer of furniture. In a recent year, it reported the following activities. Please note that the figures in the parenthesis indicates negative values.

What is the total cash flow of the company for the year?

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank A

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank B

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank C

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank D

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank E

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank F

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank G

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank H

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank I

The given table is the income statement of Zara Enterprises for three years. Each income statement is missing some numbers; you are required to determine these missing numbers.

Based on the above data, answer the given subquestions.

Enter the correct answer for Blank J

Based on the following information, answer the given subquestions.

QED Electronics Company had the following transactions during April while conducting its television and stereo repair business.

a. Parts with a cost of $1,600 were received and used during April.
b. Service revenue for the month was $33,400, but only $20,500 was cash sales.
c. Interest expense on loans outstanding was $880.
d. Wage costs for the month totaled $10,000; however, $1,400 of this had not yet been
a. paid to the employees.
e. Parts inventory from the beginning of the month was depleted by $2,100.
f. Utility bills totaling $1,500 were paid. $700 of this amount was associated with
a. March's operations.
g. Depreciation expense was $2,700.
h. Selling expenses were $1,900.
i. A provision for income taxes was established at $2,800, of which $2,600 had been paid
a. to the federal government.
j. Administrative and miscellaneous expenses were recorded at $4,700

Total expenses for the month of April are

Based on the following information, answer the given subquestions.

QED Electronics Company had the following transactions during April while conducting its television and stereo repair business.

a. Parts with a cost of $1,600 were received and used during April.
b. Service revenue for the month was $33,400, but only $20,500 was cash sales.
c. Interest expense on loans outstanding was $880.
d. Wage costs for the month totaled $10,000; however, $1,400 of this had not yet been
a. paid to the employees.
e. Parts inventory from the beginning of the month was depleted by $2,100.
f. Utility bills totaling $1,500 were paid. $700 of this amount was associated with
a. March's operations.
g. Depreciation expense was $2,700.
h. Selling expenses were $1,900.
i. A provision for income taxes was established at $2,800, of which $2,600 had been paid
a. to the federal government.
j. Administrative and miscellaneous expenses were recorded at $4,700

Total Revenue for the month of April is

Based on the following information, answer the given subquestions.

QED Electronics Company had the following transactions during April while conducting its television and stereo repair business.

a. Parts with a cost of $1,600 were received and used during April.
b. Service revenue for the month was $33,400, but only $20,500 was cash sales.
c. Interest expense on loans outstanding was $880.
d. Wage costs for the month totaled $10,000; however, $1,400 of this had not yet been
a. paid to the employees.
e. Parts inventory from the beginning of the month was depleted by $2,100.
f. Utility bills totaling $1,500 were paid. $700 of this amount was associated with
a. March's operations.
g. Depreciation expense was $2,700.
h. Selling expenses were $1,900.
i. A provision for income taxes was established at $2,800, of which $2,600 had been paid
a. to the federal government.
j. Administrative and miscellaneous expenses were recorded at $4,700

Net profit for the month of April is: