Question 1

The financial statement that summarizes a firm's accounting value as of a particular date is called the:

Accepted Answer

A) income statement. 
B) cash flow statement. 
C) liquidity position. 
D) balance sheet. 
E) periodic operating statement. 
A) income statement. 
B) cash flow statement. 
C) liquidity position. 
D) balance sheet. 
E) periodic operating statement.

Question 2

Jackson Automotive has net working capital of $22,600, current assets of $56,500, equity of $62,700, and long-term debt of $31,900.What is the amount of the net fixed assets?

Accepted Answer

A) $9,300 
B) $49,400 
C) $94,600 
D) $103,900 
E) $72,000 
A) $9,300 
B) $49,400 
C) $94,600 
D) $103,900 
E) $72,000

Question 3

Leslie Printing has net income of $26,310 for the year.At the beginning of the year, the firm had common stock of $55,000, paid-in surplus of $11,200, and retained earnings of $48,420.At the end of the year, the firm had total equity of $142,430.The firm paid dividends of $32,500.What is the amount of the net new equity raised during the year?

Accepted Answer

A) $34,000 
B) $42,500 
C) $25,000 
D) $21,500 
E) $0 
A) $34,000 
B) $42,500 
C) $25,000 
D) $21,500 
E) $0

Question 4

Paid-in surplus is classified as:

Accepted Answer

A) owners' equity. 
B) net working capital. 
C) a current asset. 
D) a cash expense. 
E) long-term debt. 
A) owners' equity. 
B) net working capital. 
C) a current asset. 
D) a cash expense. 
E) long-term debt.

Question 5

A negative cash flow to stockholders indicates a firm:

Accepted Answer

A) had a net loss for the year. 
B) had a positive cash flow to creditors. 
C) paid dividends that exceeded the amount of the net new equity. 
D) repurchased more shares than it sold. 
E) received more from selling stock than it paid out to shareholders. 
A) had a net loss for the year. 
B) had a positive cash flow to creditors. 
C) paid dividends that exceeded the amount of the net new equity. 
D) repurchased more shares than it sold. 
E) received more from selling stock than it paid out to shareholders.

Question 6

Lew's Auto Repair has cash of $18,600, accounts receivable of $34,500, accounts payable of $28,900, inventory of $97,800, long-term debt of $142,000, and net fixed assets of $363,800.The firm estimates that if it wanted to cease operations today it could sell the inventory for $85,000 and the fixed assets for $349,000.The firm could collect 100 percent of its receivables as they are secured.What is the market value of the firm's assets?

Accepted Answer

A) $332,800 
B) $458,200 
C) $374,200 
D) $495,500 
E) $487,100 
A) $332,800 
B) $458,200 
C) $374,200 
D) $495,500 
E) $487,100

Question 7

For the year, Uptowne Furniture had sales of $818,790, costs of $748,330, and interest paid of $24,450.The depreciation expense was $56,100 and the tax rate was 34 percent.At the beginning of the year, the firm had retained earnings of $172,270 and common stock of $260,000.At the end of the year, retained earnings was $158,713 and common stock was $280,000.Any tax losses can be used.What is the amount of the dividends paid for the year?

Accepted Answer

A) $5,266 
B) $6,466 
C) $7,566 
D) $7,066 
E) $6,898 
A) $5,266 
B) $6,466 
C) $7,566 
D) $7,066 
E) $6,898

Question 8

Use the following tax table to answer this question:   Andrews Dried Fruit, LLC has taxable income of $630,000.How much does it owe in taxes?

Accepted Answer

A) $141,750 
B) $154,800 
C) $198,790 
D) $220,500 
E) $233,100 
A) $141,750 
B) $154,800 
C) $198,790 
D) $220,500 
E) $233,100

Question 9

For the past year, LP Gas, Inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders.The interest paid was $2,300.What is the amount of the net new borrowing?

Accepted Answer

A) -$14,300 
B) -$9,700 
C) $12,300 
D) $14,300 
E) $18,900 
A) -$14,300 
B) -$9,700 
C) $12,300 
D) $14,300 
E) $18,900

Question 10

The tax rate that determines the amount of tax that will be due on the next dollar of taxable income earned is called the:

Accepted Answer

A) average tax rate. 
B) variable tax rate. 
C) marginal tax rate. 
D) fixed tax rate. 
E) ordinary tax rate. 
A) average tax rate. 
B) variable tax rate. 
C) marginal tax rate. 
D) fixed tax rate. 
E) ordinary tax rate.

Question 11

Last year, The Pizza Joint added $6,230 to retained earnings from sales of $104,650.The company had costs of $87,300, dividends of $2,500, and interest paid of $1,620.Given a tax rate of 34 percent, what was the amount of the depreciation expense?

Accepted Answer

A) $2,407 
B) $1,908 
C) $2,503 
D) $3,102 
E) $3,414 
A) $2,407 
B) $1,908 
C) $2,503 
D) $3,102 
E) $3,414

Question 12

Use the following tax table to answer this question:   Stacey's Fabrics, a sole proprietorship earned $260.000 in taxable income for the year.How much tax does the company owe?

Accepted Answer

A) $$96,220 
B) $91,000 
C) $66.690 
D) $62,400 
E) $57,200 
A) $$96,220 
B) $91,000 
C) $66.690 
D) $62,400 
E) $57,200

Question 13

Marenelle Construction has beginning retained earnings of $284,300.For the year, the company earned net income of $13,700 and paid dividends of $9,000.The company also issued $25,000 worth of new stock.What is the value of the retained earnings account at the end of the year?

Accepted Answer

A) $287,204 
B) $289.454 
C) $294,134 
D) $289.000 
E) $314,000 
A) $287,204 
B) $289.454 
C) $294,134 
D) $289.000 
E) $314,000

Question 14

Which one of the following indicates that a firm has generated sufficient internal cash flow to finance its entire operations for the period?

Accepted Answer

A) Positive operating cash flow 
B) Negative cash flow to creditors 
C) Positive cash flow to stockholders 
D) Negative net capital spending 
E) Positive cash flow from assets 
A) Positive operating cash flow 
B) Negative cash flow to creditors 
C) Positive cash flow to stockholders 
D) Negative net capital spending 
E) Positive cash flow from assets

Question 15

Daisy Co.has $267,000 in taxable income and Binget Co.has $1,600,000 in taxable income.Suppose both firms have identified a new project that will increase taxable income by $10,000.The additional project will increase Able Co.'s taxes by _____ and Bravo Co.'s taxes by ____.

Accepted Answer

A) $1,500; $1,500 
B) $3,400; $3,400 
C) $3,400; $3,700 
D) $3,500; $3,700 
E) $3,700; $3,700 
A) $1,500; $1,500 
B) $3,400; $3,400 
C) $3,400; $3,700 
D) $3,500; $3,700 
E) $3,700; $3,700

Question 16

Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600.What is the value of the current assets?

Accepted Answer

A) $21,600 
B) $18,100 
C) $28,900 
D) $29,400 
E) $6,800 
A) $21,600 
B) $18,100 
C) $28,900 
D) $29,400 
E) $6,800

Question 17

During the past year, Yard Services paid $36,800 in interest along with $2,000 in dividends.The company issued $3,000 of stock and $16,000 of new debt.The company reduced the balance due on its old debt by $18,400.What is the amount of the cash flow to creditors?

Accepted Answer

A) $8,200 
B) $55,200 
C) $2,400 
D) $39,200 
E) $15,800 
A) $8,200 
B) $55,200 
C) $2,400 
D) $39,200 
E) $15,800

Question 18

Tressler Industries opted to repurchase 5,000 shares of stock last year in lieu of paying a dividend.The cash flow statement for last year must have which one of the following assuming that no new shares were issued?

Accepted Answer

A) Positive operating cash flow 
B) Negative cash flow from assets 
C) Positive net income 
D) Negative operating cash flow 
E) Positive cash flow to stockholders 
A) Positive operating cash flow 
B) Negative cash flow from assets 
C) Positive net income 
D) Negative operating cash flow 
E) Positive cash flow to stockholders

Question 19

The concept of marginal taxation is best exemplified by which one of the following?

Accepted Answer

A) Kirby's paid $120,000 in taxes while its primary competitor paid only $80,000 in taxes. 
B) Johnson's Retreat paid only $45,000 on total revenue of $570,000 last year. 
C) Mitchell's Grocer increased its sales by $52,000 last year and had to pay an additional $16,000 in taxes. 
D) Burlington Centre paid no taxes last year due to carryforward losses. 
E) The Blue Moon paid $2.20 in taxes for every $10 of revenue last year. 
A) Kirby's paid $120,000 in taxes while its primary competitor paid only $80,000 in taxes. 
B) Johnson's Retreat paid only $45,000 on total revenue of $570,000 last year. 
C) Mitchell's Grocer increased its sales by $52,000 last year and had to pay an additional $16,000 in taxes. 
D) Burlington Centre paid no taxes last year due to carryforward losses. 
E) The Blue Moon paid $2.20 in taxes for every $10 of revenue last year.

Question 20

Suzette's Market had long-term debt of $638,100 at the beginning of the year compared to $574,600 at year-end.If the interest expense was $42,300, what was the firm's cash flow to creditors?

Accepted Answer

A) $21,200 
B) $26,700 
C) $54,900 
D) $102,400 
E) $105,800 
A) $21,200 
B) $26,700 
C) $54,900 
D) $102,400 
E) $105,800

The financial statement that summarizes a firm's accounting value as of a particular date is called the:

Jackson Automotive has net working capital of $22,600, current assets of $56,500, equity of $62,700, and long-term debt of $31,900.What is the amount of the net fixed assets?

Paid-in surplus is classified as:

A negative cash flow to stockholders indicates a firm:

Use the following tax table to answer this question: Andrews Dried Fruit, LLC has taxable income of $630,000.How much does it owe in taxes?

For the past year, LP Gas, Inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders.The interest paid was $2,300.What is the amount of the net new borrowing?

The tax rate that determines the amount of tax that will be due on the next dollar of taxable income earned is called the:

Last year, The Pizza Joint added $6,230 to retained earnings from sales of $104,650.The company had costs of $87,300, dividends of $2,500, and interest paid of $1,620.Given a tax rate of 34 percent, what was the amount of the depreciation expense?

Use the following tax table to answer this question: Stacey's Fabrics, a sole proprietorship earned $260.000 in taxable income for the year.How much tax does the company owe?

Marenelle Construction has beginning retained earnings of $284,300.For the year, the company earned net income of $13,700 and paid dividends of $9,000.The company also issued $25,000 worth of new stock.What is the value of the retained earnings account at the end of the year?

Which one of the following indicates that a firm has generated sufficient internal cash flow to finance its entire operations for the period?

Daisy Co.has $267,000 in taxable income and Binget Co.has $1,600,000 in taxable income.Suppose both firms have identified a new project that will increase taxable income by $10,000.The additional project will increase Able Co.'s taxes by _ and Bravo Co.'s taxes by .

Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600.What is the value of the current assets?

During the past year, Yard Services paid $36,800 in interest along with $2,000 in dividends.The company issued $3,000 of stock and $16,000 of new debt.The company reduced the balance due on its old debt by $18,400.What is the amount of the cash flow to creditors?

Tressler Industries opted to repurchase 5,000 shares of stock last year in lieu of paying a dividend.The cash flow statement for last year must have which one of the following assuming that no new shares were issued?

The concept of marginal taxation is best exemplified by which one of the following?

Suzette's Market had long-term debt of $638,100 at the beginning of the year compared to $574,600 at year-end.If the interest expense was $42,300, what was the firm's cash flow to creditors?

Introduction to Financial Management

Working With Financial Statements

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Cost of Capital

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Exam 2: Financial Statements, Taxes, and Cash Flow

The financial statement that summarizes a firm's accounting value as of a particular date is called the:

Jackson Automotive has net working capital of $22,600, current assets of $56,500, equity of $62,700, and long-term debt of $31,900.What is the amount of the net fixed assets?

Paid-in surplus is classified as:

A negative cash flow to stockholders indicates a firm:

Use the following tax table to answer this question: Andrews Dried Fruit, LLC has taxable income of $630,000.How much does it owe in taxes?

For the past year, LP Gas, Inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders.The interest paid was $2,300.What is the amount of the net new borrowing?

The tax rate that determines the amount of tax that will be due on the next dollar of taxable income earned is called the:

Last year, The Pizza Joint added $6,230 to retained earnings from sales of $104,650.The company had costs of $87,300, dividends of $2,500, and interest paid of $1,620.Given a tax rate of 34 percent, what was the amount of the depreciation expense?

Use the following tax table to answer this question: Stacey's Fabrics, a sole proprietorship earned $260.000 in taxable income for the year.How much tax does the company owe?

Marenelle Construction has beginning retained earnings of $284,300.For the year, the company earned net income of $13,700 and paid dividends of $9,000.The company also issued $25,000 worth of new stock.What is the value of the retained earnings account at the end of the year?

Which one of the following indicates that a firm has generated sufficient internal cash flow to finance its entire operations for the period?

Daisy Co.has $267,000 in taxable income and Binget Co.has $1,600,000 in taxable income.Suppose both firms have identified a new project that will increase taxable income by $10,000.The additional project will increase Able Co.'s taxes by _____ and Bravo Co.'s taxes by ____.

Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600.What is the value of the current assets?

During the past year, Yard Services paid $36,800 in interest along with $2,000 in dividends.The company issued $3,000 of stock and $16,000 of new debt.The company reduced the balance due on its old debt by $18,400.What is the amount of the cash flow to creditors?

Tressler Industries opted to repurchase 5,000 shares of stock last year in lieu of paying a dividend.The cash flow statement for last year must have which one of the following assuming that no new shares were issued?

The concept of marginal taxation is best exemplified by which one of the following?

Suzette's Market had long-term debt of $638,100 at the beginning of the year compared to $574,600 at year-end.If the interest expense was $42,300, what was the firm's cash flow to creditors?

Introduction to Financial Management

Working With Financial Statements

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Cost of Capital

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Daisy Co.has $267,000 in taxable income and Binget Co.has $1,600,000 in taxable income.Suppose both firms have identified a new project that will increase taxable income by $10,000.The additional project will increase Able Co.'s taxes by _ and Bravo Co.'s taxes by .