Question 1

Financial statements for Quade Company appear below:

Accepted Answer

@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&Quade Company
@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&@#LAT-DLM&Statement of Financial Pos

Question 2

The gross margin percentage is most likely to be used to assess which of the following?

Accepted Answer

A)  How quickly accounts receivables can be collected. 
B)  How quickly inventories are sold. 
C)  The efficiency of administrative departments. 
D)  The overall profitability of the company's products. 
A)  How quickly accounts receivables can be collected. 
B)  How quickly inventories are sold. 
C)  The efficiency of administrative departments. 
D)  The overall profitability of the company's products.

Question 3

The inventory turnover ratio is equal to the average inventory balance divided by the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 4

Financial statements for Larosa Company appear below:

Total dividends during Year 2 were $47,000, of which $10,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $70.
-Larosa Company's earnings per common share for Year 2 was closest to which of the following?

Accepted Answer

A)  $3.09. 
B)  $9.41. 
C)  $9.86. 
D)  $14.09. 
A)  $3.09. 
B)  $9.41. 
C)  $9.86. 
D)  $14.09.

Question 5

Which of the following accounts would be included in the calculation of the acid-test ratio? Accounts Prepaid

$ \begin{array}{llll}
Receivable& Expense& Inventory\
\text { A) Yes } & \text { Yes } & \text { No } \ \text { B) No } & \text { Yes } & \text { Yes } \ \text { C) No } & \text { No } & \text { Yes } \ \text { D) Yes } & \text { No } & \text { No }\end{array} $

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 6

Irappa Company,a retailer,had cost of goods sold of $170,000 last year.The beginning inventory balance was $28,000,and the ending inventory balance was $26,000.The company's average sale period (turnover in days)was closest to which of the following?

Accepted Answer

A)  55.82 days. 
B)  57.97 days. 
C)  60.12 days. 
D)  115.94 days. 
A)  55.82 days. 
B)  57.97 days. 
C)  60.12 days. 
D)  115.94 days.

Question 7

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Accepted Answer

A)  Prepayment of $50,000 of next year's rent. 
B)  Refinancing $50,000 of short-term debt with long-term debt. 
C)  Acquisition of land valued at $50,000 by issuing new common shares. 
D)  Purchase of $50,000 of marketable securities for cash. 
A)  Prepayment of $50,000 of next year's rent. 
B)  Refinancing $50,000 of short-term debt with long-term debt. 
C)  Acquisition of land valued at $50,000 by issuing new common shares. 
D)  Purchase of $50,000 of marketable securities for cash.

Question 8

Grapp Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $18,000,and the ending accounts receivable balance was $16,000.The company's average collection period (age of receivables)was closest to which of the following?

Accepted Answer

A)  44.92 days. 
B)  47.73 days. 
C)  50.54 days. 
D)  95.46 days. 
A)  44.92 days. 
B)  47.73 days. 
C)  50.54 days. 
D)  95.46 days.

Question 9

Fracus Company had $100,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to which of the following?

Accepted Answer

A)  3.33 times. 
B)  6.25 times. 
C)  6.67 times. 
D)  7.14 times. 
A)  3.33 times. 
B)  6.25 times. 
C)  6.67 times. 
D)  7.14 times.

Question 10

Financial statements for Orantes Company appear below:

Total dividends during Year 2 were $181,000, of which $12,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $280.
-Orantes Company's return on total assets for Year 2 was closest to which of the following?

Accepted Answer

A)  11.4%. 
B)  12.3%. 
C)  12.7%. 
D)  13.1%. 
A)  11.4%. 
B)  12.3%. 
C)  12.7%. 
D)  13.1%.

Question 11

Which of the following is true regarding the calculation of return on total assets?

Accepted Answer

A)  The numerator of the ratio consists only of net income. 
B)  The denominator of the ratio consists of the balance of total assets at the end of the period under consideration. 
C)  The numerator of the ratio consists of net income plus interest expense multiplied by the tax rate. 
D)  The numerator of the ratio consists of net income plus interest expense multiplied by one minus the tax rate. 
A)  The numerator of the ratio consists only of net income. 
B)  The denominator of the ratio consists of the balance of total assets at the end of the period under consideration. 
C)  The numerator of the ratio consists of net income plus interest expense multiplied by the tax rate. 
D)  The numerator of the ratio consists of net income plus interest expense multiplied by one minus the tax rate.

Question 12

Financial statements for Narita Company appear below:

-Narita Company's times interest earned for Year 2 was closest to which of the following?

Accepted Answer

A)  10.3 times. 
B)  14.7 times. 
C)  15.7 times. 
D)  26.0 times. 
A)  10.3 times. 
B)  14.7 times. 
C)  15.7 times. 
D)  26.0 times.

Question 13

Financial statements for Narumi Company appear below:

-Narumi Company's times interest earned for Year 2 was closest to which of the following?

Accepted Answer

A)  4.6 times. 
B)  6.6 times. 
C)  7.6 times. 
D)  12.4 times. 
A)  4.6 times. 
B)  6.6 times. 
C)  7.6 times. 
D)  12.4 times.

Question 14

Selected data for the MK Company follow:

-What was the dividend payout ratio for the prior year?

Accepted Answer

A)  55.6%. 
B)  85.7%. 
C)  114.3%. 
D)  140.0%. 
A)  55.6%. 
B)  85.7%. 
C)  114.3%. 
D)  140.0%.

Question 15

Financial statements for Larned Company appear below:

Total dividends during Year 2 were $263,000, of which $12,000 were for preferred shares. The market price of a common share on December 31, Year 2 was $160.
-Larned Company's price-earnings ratio on December 31,Year 2 was closest to which of the following?

Accepted Answer

A)  5.88. 
B)  8.40. 
C)  8.70. 
D)  14.50. 
A)  5.88. 
B)  8.40. 
C)  8.70. 
D)  14.50.

Question 16

Mariah Company had a times interest earned ratio of 3.0 for the year just ended.The company's tax rate was 40%,and the interest expense for the year was $25,000.What was Mariah Company's after-tax net income?

Accepted Answer

A)  $25,000. 
B)  $30,000. 
C)  $50,000. 
D)  $75,000. 
A)  $25,000. 
B)  $30,000. 
C)  $50,000. 
D)  $75,000.

Question 17

The following financial data have been taken from the records of CPZ Enterprises.
 
-What is the company's acid-test (quick)ratio?

Accepted Answer

A)  0.68. 
B)  1.68. 
C)  2.14. 
D)  2.31. 
A)  0.68. 
B)  1.68. 
C)  2.14. 
D)  2.31.

Question 18

Financial statements for Orantes Company appear below:

Total dividends during Year 2 were $181,000, of which $12,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $280.
-Orantes Company's times interest earned for Year 2 was closest to which of the following?

Accepted Answer

A)  10.0 times. 
B)  14.3 times. 
C)  15.3 times. 
D)  25.3 times. 
A)  10.0 times. 
B)  14.3 times. 
C)  15.3 times. 
D)  25.3 times.

Question 19

Last year,Jackson Company had a net income of $160,000,income tax expense of $66,000,and interest expense of $20,000.The company's times interest earned was closest to which of the following?

Accepted Answer

A)  3.70 times. 
B)  8.00 times. 
C)  9.00 times. 
D)  12.30 times. 
A)  3.70 times. 
B)  8.00 times. 
C)  9.00 times. 
D)  12.30 times.

Question 20

Dratif Company's working capital is $33,000,and its current liabilities are $80,000.The company's current ratio is closest to which of the following?

Accepted Answer

A)  0.41 to 1. 
B)  0.59 to 1. 
C)  1.41 to 1. 
D)  3.42 to 1. 
A)  0.41 to 1. 
B)  0.59 to 1. 
C)  1.41 to 1. 
D)  3.42 to 1.

Financial statements for Quade Company appear below:

The gross margin percentage is most likely to be used to assess which of the following?

The inventory turnover ratio is equal to the average inventory balance divided by the cost of goods sold.

Which of the following accounts would be included in the calculation of the acid-test ratio? Accounts Prepaid Receivable Expense Inventory A) Yes Yes No B) No Yes Yes C) No No Yes D) Yes No No

Irappa Company,a retailer,had cost of goods sold of $170,000 last year.The beginning inventory balance was $28,000,and the ending inventory balance was $26,000.The company's average sale period (turnover in days)was closest to which of the following?

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Grapp Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $18,000,and the ending accounts receivable balance was $16,000.The company's average collection period (age of receivables)was closest to which of the following?

Fracus Company had $100,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to which of the following?

Which of the following is true regarding the calculation of return on total assets?

Financial statements for Narita Company appear below: -Narita Company's times interest earned for Year 2 was closest to which of the following?

Financial statements for Narumi Company appear below: -Narumi Company's times interest earned for Year 2 was closest to which of the following?

Selected data for the MK Company follow: -What was the dividend payout ratio for the prior year?

Mariah Company had a times interest earned ratio of 3.0 for the year just ended.The company's tax rate was 40%,and the interest expense for the year was $25,000.What was Mariah Company's after-tax net income?

The following financial data have been taken from the records of CPZ Enterprises. -What is the company's acid-test (quick)ratio?

Last year,Jackson Company had a net income of $160,000,income tax expense of $66,000,and interest expense of $20,000.The company's times interest earned was closest to which of the following?

Dratif Company's working capital is $33,000,and its current liabilities are $80,000.The company's current ratio is closest to which of the following?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: A Tool to Aid Decision Making

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Filters

Exam 14: Financial Statement Analysis

Financial statements for Quade Company appear below:

The gross margin percentage is most likely to be used to assess which of the following?

The inventory turnover ratio is equal to the average inventory balance divided by the cost of goods sold.

Which of the following accounts would be included in the calculation of the acid-test ratio? Accounts Prepaid Receivable Expense Inventory A) Yes Yes No B) No Yes Yes C) No No Yes D) Yes No No

Irappa Company,a retailer,had cost of goods sold of $170,000 last year.The beginning inventory balance was $28,000,and the ending inventory balance was $26,000.The company's average sale period (turnover in days)was closest to which of the following?

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Grapp Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $18,000,and the ending accounts receivable balance was $16,000.The company's average collection period (age of receivables)was closest to which of the following?

Fracus Company had $100,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to which of the following?

Which of the following is true regarding the calculation of return on total assets?

Financial statements for Narita Company appear below: -Narita Company's times interest earned for Year 2 was closest to which of the following?

Financial statements for Narumi Company appear below: -Narumi Company's times interest earned for Year 2 was closest to which of the following?

Selected data for the MK Company follow: -What was the dividend payout ratio for the prior year?

Mariah Company had a times interest earned ratio of 3.0 for the year just ended.The company's tax rate was 40%,and the interest expense for the year was $25,000.What was Mariah Company's after-tax net income?

The following financial data have been taken from the records of CPZ Enterprises. -What is the company's acid-test (quick)ratio?

Last year,Jackson Company had a net income of $160,000,income tax expense of $66,000,and interest expense of $20,000.The company's times interest earned was closest to which of the following?

Dratif Company's working capital is $33,000,and its current liabilities are $80,000.The company's current ratio is closest to which of the following?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: A Tool to Aid Decision Making

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Filters