Question 1

A positive fully diluted earnings per share can sometimes exceed basic (undiluted)earnings per share.

Accepted Answer

A) True 
 B)False

Question 2

Financial statements for Oratz Company appear below:

Total dividends during Year 2 were $139,000, of which $6,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $260.
-Oratz Company's average sale period (turnover in days)for Year 2 was closest to which of the following?

Accepted Answer

A)  29.1 days. 
B)  40.3 days. 
C)  41.6 days. 
D)  57.6 days. 
A)  29.1 days. 
B)  40.3 days. 
C)  41.6 days. 
D)  57.6 days.

Question 3

Granger Company had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000,and the ending accounts receivable balance was $18,000.The company's average collection period (age of receivables)was closest to which of the following?

Accepted Answer

A)  20.28 days. 
B)  28.39 days. 
C)  36.50 days. 
D)  56.78 days. 
A)  20.28 days. 
B)  28.39 days. 
C)  36.50 days. 
D)  56.78 days.

Question 4

Lisa Inc.'s balance sheet appears below:
 
The company's sales for the year were $300,000, its cost of goods sold was $220,000, and its net income was $35,000. All sales were on credit. Dividends paid on preferred shares for the year were $5,000.
-Lisa Inc.'s book value per common share at December 31,Year 2,was closest to which of the following?

Accepted Answer

A)  $10.00. 
B)  $11.25. 
C)  $18.33. 
D)  $19.33. 
A)  $10.00. 
B)  $11.25. 
C)  $18.33. 
D)  $19.33.

Question 5

Cameron Company had 50,000 common shares issued and outstanding during the year just ended.The following information pertains to these shares:

$\begin{array}{lccc}
\text { Price Originally Issued }& \$ 40 \
\text {  Book Value at End of Current Year  }&\$70 \
\text {   Market Value, Beginning of Current Year  }&\$ 85\
\text { 
Market Value, End of Current Year }&\$90 \
\end{array}$
 The total dividend on common shares for the year was $400,000.What was Cameron Company's dividend yield ratio for the year?

Accepted Answer

A)  8.89%. 
B)  9.41%. 
C)  11.43%. 
D)  20.00%. 
A)  8.89%. 
B)  9.41%. 
C)  11.43%. 
D)  20.00%.

Question 6

Financial statements for Laroche Company appear below:

Shareholders' Equity:

Total dividends during Year 2 were $166,000, of which $10,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $150.

-Laroche Company's dividend yield ratio on December 31,Year 2 was closest to which of the following?

Accepted Answer

A)  1.6%. 
B)  4.1%. 
C)  4.3%. 
D)  4.6%. 
A)  1.6%. 
B)  4.1%. 
C)  4.3%. 
D)  4.6%.

Question 7

PFM Company has sales of $210,000,interest expense of $8,000,a tax rate of 30%,and a net profit after tax of $35,000.What is PFM Company's times interest earned ratio?

Accepted Answer

A)  4.375 times. 
B)  5.375 times. 
C)  7.250 times. 
D)  15.500 times. 
A)  4.375 times. 
B)  5.375 times. 
C)  7.250 times. 
D)  15.500 times.

Question 8

Eral Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Accepted Answer

A)  0.44 to 1. 
B)  0.80 to 1. 
C)  1.24 to 1. 
D)  1.78 to 1. 
A)  0.44 to 1. 
B)  0.80 to 1. 
C)  1.24 to 1. 
D)  1.78 to 1.

Question 9

Grave Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $10,000.The company's average collection period (age of receivables)was closest to which of the following?

Accepted Answer

A)  24.33 days. 
B)  29.20 days. 
C)  34.07 days. 
D)  58.40 days. 
A)  24.33 days. 
B)  29.20 days. 
C)  34.07 days. 
D)  58.40 days.

Question 10

Braverman Company's net income last year was $75,000,and its interest expense was $10,000.Total assets at the beginning of the year were $650,000,and total assets at the end of the year were $610,000.The company's income tax rate was 30%.The company's return on total assets for the year was closest to which of the following?

Accepted Answer

A)  11.9%. 
B)  12.4%. 
C)  13.0%. 
D)  13.5%. 
A)  11.9%. 
B)  12.4%. 
C)  13.0%. 
D)  13.5%.

Question 11

Condensed financial statements of Miller Company at the beginning and at the end of the current year are given below:

Accepted Answer

The company paid total dividends of $15,

Question 12

Selected financial data for Barnstable Company appear below:

-For Year 2,what was the net income before taxes as a percentage of sales?

Accepted Answer

A)  3%. 
B)  5%. 
C)  8%. 
D)  10%. 
A)  3%. 
B)  5%. 
C)  8%. 
D)  10%.

Question 13

Selected data for the MK Company follow:

-What was the price-earnings ratio for the prior year?

Accepted Answer

A)  11.1 to 1. 
B)  12.2 to 1. 
C)  14.3 to 1. 
D)  15.8 to 1. 
A)  11.1 to 1. 
B)  12.2 to 1. 
C)  14.3 to 1. 
D)  15.8 to 1.

Question 14

Financial statements for Oratz Company appear below:

Total dividends during Year 2 were $139,000, of which $6,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $260.
-Oratz Company's return on total assets for Year 2 was closest to which of the following?

Accepted Answer

A)  8.9%. 
B)  10.0%. 
C)  10.5%. 
D)  11.1%. 
A)  8.9%. 
B)  10.0%. 
C)  10.5%. 
D)  11.1%.

Question 15

Erambo Company has $11,000 in cash,$6,000 in marketable securities,$27,000 in current receivables,$8,000 in inventories,and $51,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Accepted Answer

A)  0.53 to 1. 
B)  0.75 to 1. 
C)  0.86 to 1. 
D)  1.02 to 1. 
A)  0.53 to 1. 
B)  0.75 to 1. 
C)  0.86 to 1. 
D)  1.02 to 1.

Question 16

Crawler Company's net income last year was $80,000.The company paid dividends on preferred shares of $10,000,and its average common shareholders' equity was $400,000.The company's return on common shareholders' equity for the year was closest to which of the following?

Accepted Answer

A)  2.5%. 
B)  17.5%. 
C)  20.0%. 
D)  22.5%. 
A)  2.5%. 
B)  17.5%. 
C)  20.0%. 
D)  22.5%.

Question 17

If a company converts a short-term note payable into a long-term note payable,what would be the effect of this transaction?

Accepted Answer

A)  A decrease in working capital and an increase in the current ratio. 
B)  A decrease in both working capital and the current ratio. 
C)  A decrease in both the current ratio and the acid-test ratio. 
D)  An increase in both working capital and the current ratio. 
A)  A decrease in working capital and an increase in the current ratio. 
B)  A decrease in both working capital and the current ratio. 
C)  A decrease in both the current ratio and the acid-test ratio. 
D)  An increase in both working capital and the current ratio.

Question 18

Marcy Corporation's current ratio is currently 1.75 to 1.The firm's current ratio cannot fall below 1.5 to 1 without violating agreements with its bondholders.If current liabilities are presently $250 million,what is the maximum new short-term debt that can be issued to finance an equivalent amount of inventory expansion?

Accepted Answer

A)  $41.67 million. 
B)  $62.50 million. 
C)  $125.00 million. 
D)  $375.00 million. 
A)  $41.67 million. 
B)  $62.50 million. 
C)  $125.00 million. 
D)  $375.00 million.

Question 19

Financial statements for Oratz Company appear below:

Total dividends during Year 2 were $139,000, of which $6,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $260.
-Oratz Company's accounts receivable turnover for Year 2 was closest to which of the following?

Accepted Answer

A)  6.3 times. 
B)  8.8 times. 
C)  9.1 times. 
D)  12.5 times. 
A)  6.3 times. 
B)  8.8 times. 
C)  9.1 times. 
D)  12.5 times.

Question 20

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 accounts receivable turnover for Year 2 was closest to which of the following?

Accepted Answer

A)  10.3 times. 
B)  13.5 times. 
C)  14.8 times. 
D)  19.3 times. 
A)  10.3 times. 
B)  13.5 times. 
C)  14.8 times. 
D)  19.3 times.

A positive fully diluted earnings per share can sometimes exceed basic (undiluted)earnings per share.

Granger Company had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000,and the ending accounts receivable balance was $18,000.The company's average collection period (age of receivables)was closest to which of the following?

PFM Company has sales of $210,000,interest expense of $8,000,a tax rate of 30%,and a net profit after tax of $35,000.What is PFM Company's times interest earned ratio?

Eral Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Grave Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $10,000.The company's average collection period (age of receivables)was closest to which of the following?

Condensed financial statements of Miller Company at the beginning and at the end of the current year are given below:

Selected financial data for Barnstable Company appear below: -For Year 2,what was the net income before taxes as a percentage of sales?

Selected data for the MK Company follow: -What was the price-earnings ratio for the prior year?

Financial statements for Oratz Company appear below: Total dividends during Year 2 were $139,000, of which $6,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $260. -Oratz Company's return on total assets for Year 2 was closest to which of the following?

Erambo Company has $11,000 in cash,$6,000 in marketable securities,$27,000 in current receivables,$8,000 in inventories,and $51,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Crawler Company's net income last year was $80,000.The company paid dividends on preferred shares of $10,000,and its average common shareholders' equity was $400,000.The company's return on common shareholders' equity for the year was closest to which of the following?

If a company converts a short-term note payable into a long-term note payable,what would be the effect of this transaction?

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

A positive fully diluted earnings per share can sometimes exceed basic (undiluted)earnings per share.

Granger Company had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000,and the ending accounts receivable balance was $18,000.The company's average collection period (age of receivables)was closest to which of the following?

PFM Company has sales of $210,000,interest expense of $8,000,a tax rate of 30%,and a net profit after tax of $35,000.What is PFM Company's times interest earned ratio?

Eral Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Grave Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000,and the ending accounts receivable balance was $10,000.The company's average collection period (age of receivables)was closest to which of the following?

Condensed financial statements of Miller Company at the beginning and at the end of the current year are given below:

Selected financial data for Barnstable Company appear below: -For Year 2,what was the net income before taxes as a percentage of sales?

Selected data for the MK Company follow: -What was the price-earnings ratio for the prior year?

Financial statements for Oratz Company appear below: Total dividends during Year 2 were $139,000, of which $6,000 were preferred dividends. The market price of a common share on December 31, Year 2 was $260. -Oratz Company's return on total assets for Year 2 was closest to which of the following?

Erambo Company has $11,000 in cash,$6,000 in marketable securities,$27,000 in current receivables,$8,000 in inventories,and $51,000 in current liabilities.The company's acid-test (quick)ratio is closest to which of the following?

Crawler Company's net income last year was $80,000.The company paid dividends on preferred shares of $10,000,and its average common shareholders' equity was $400,000.The company's return on common shareholders' equity for the year was closest to which of the following?

If a company converts a short-term note payable into a long-term note payable,what would be the effect of this transaction?

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