Selected year-end data for the Brayer Company are presented below: $\begin{array}{|l|r|} \hline \text { Current Liabilities } & \$ 600,000 \\ \hline \text { Acid-Test Ratio } & 2.5 \text { to } 1 \\ \hline \text { Current Ratio } & 3.0 \text { to } 1 \\ \hline \text { Cost of Goods Sold } & \$ 500,000 \\ \hline \end{array}$ The company has no prepaid expenses,and inventories remained unchanged during the year.Based on these data,the company's inventory turnover ratio for the year was closest to which of the following?

A) 1.20 times. B) 1.67 times. C) 2.33 times. D) 2.40 times. A) 1.20 times. B) 1.67 times. C) 2.33 times. D) 2.40 times.

The following financial data have been taken from the records of CPZ Enterprises. $\begin{array}{l|r|} \hline \text { Accounts Receivable } & \$ 200000 \\ \hline \text { Accounts Payable } & \$ 80000 \\ \hline \text { Bonds Payable, Due in Ten Years } & \$ 300000 \\ \hline \text { Cash } & \$ 100000 \\ \hline \text { Interest Payable, Due in Three Months } & \$ 10000 \\ \hline \text { Inventory } & \$ 440000 \\ \hline \text { Land } & \$ 250000 \\ \hline \text { Notes Payable, Due in Six Months } & \$ 50000 \\ \hline \end{array}$ -What is the company's acid-test (quick)ratio?

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

Selected financial data for Barnstable Company appear below: $\begin{array}{|l|r|r|} \hline & \text { Year 2 } & \text { Year 1 } \\ \hline \text { Sales } & \text { (in thousands) } & \\ \hline \text { Operating Expense } & \$ 1,500 & \$ 1,200 \\ \hline \text { Interest Expense } & \$ 450 & \$ 400 \\ \hline \text { Cost of Goods Sold } & \$ 75 & \$ 30 \\ \hline \text { Dividends Declared and Paid } & \$ 900 & \$ 720 \\ \hline \end{array}$ -For Year 2,what was the gross margin as a percentageof sales?

A) 5%. B) 10%. C) 40%. D) 60%. A) 5%. B) 10%. C) 40%. D) 60%.

Financial statements for Marcial Company appear below: -Marcial Company's accounts receivableturnover for Year 2 was closest to which of the following?

A) 8.4 times. B) 10.4 times. C) 12.1 times. D) 14.8 times. A) 8.4 times. B) 10.4 times. C) 12.1 times. D) 14.8 times.

Selected financial data for Barnstable Company appear below: $\begin{array}{|l|r|r|} \hline & \text { Year 2 } & \text { Year 1 } \\ \hline \text { Sales } & \text { (in thousands) } & \\ \hline \text { Operating Expense } & \$ 1,500 & \$ 1,200 \\ \hline \text { Interest Expense } & \$ 450 & \$ 400 \\ \hline \text { Cost of Goods Sold } & \$ 75 & \$ 30 \\ \hline \text { Dividends Declared and Paid } & \$ 900 & \$ 720 \\ \hline \end{array}$ -For Year 2,what was the net income before taxes as a percentageof sales?

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

Selected data for the Boat Rental Company follow: $\begin{array} {|l | r | r | } \hline & \text { Current Year } & \text { Prior Year } \\ \hline \begin{array} { l } \text { Preferred Shares, 8\% Par } \\ \text { Value } \$ 50 \end{array} & \$ 250000 & \$ 250000 \\ \hline \begin{array} { l } \text { Common Shares, Per Value } \\ \$ 10 \end{array} & \$ 500000 & \$ 500000 \\ \hline \begin{array} { l } \text { Retained Earnings at End of } \\ \text { Year } \end{array} & \$ 257000 & \$ 240000 \\ \hline \begin{array} { l } \text { Net Income } \\ \end{array}&\$ 102000 & \$ 90000\\ \hline \begin{array} { l } \text { Dividends Paid on Preferred } \\ \text { Shares } \end{array} &\$20000&\$20000 \\ \hline \begin{array} { l } \text { Dividends Paid on Common } \\ \text { Shares } \end{array} & \$ 55000 & \$50000 \\ \hline \begin{array} { l } \text { Quoted Market Price per } \\ \text { Common Share at Year End } \end{array} & \$ 25 & \$20 \\ \hline \end{array}$ -What was the dividend payout ratio for the prior year?

A) 55.6%. B) 71.4%. C) 114.3%. D) 140.0%. A) 55.6%. B) 71.4%. C) 114.3%. D) 140.0%.

Exam 14: Financial Statement Analysis

Financial statements for Marcell Company appear below: $Financial statements for Marcell Company appear below: \begin{array}{|l|r|} \hline &\begin{array}{r} \text { Marcell Company } \\ \text { Income Statement }\\\text { For the Year Ended December 31, Year } \\ 2 \\ \text { (dollars in thousands) } \\ \end{array} \\\hline \text { Sales (All on Account) } & \$ 2550 \\ \hline \text { Costs of Goods Sold } & \$ 1780 \\ \hline \text { Gross Margin } & \$ 770 \\ \hline \text { Operating Expenses } & \$ 300 \\ \hline \text { Net Operating Income } & \$ 470 \\ \hline \text { Interest Expense } & \$ 50 \\ \hline \text { Net Income before Taxes } & \$ 420 \\ \hline \text { Income Taxes (30\%) } & \$ 126 \\ \hline \text { Net Income } & \$ 294 \\ \hline \end{array} -Marcell Company's average sale period (turnover in days)for Year 2 was closest to which of the following?$ Marcell Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2550 Costs of Goods Sold \ 1780 Gross Margin \ 770 Operating Expenses \ 300 Net Operating Income \ 470 Interest Expense \ 50 Net Income before Taxes \ 420 Income Taxes (30\%) \ 126 Net Income \ 294 -Marcell Company's average sale period (turnover in days)for Year 2 was closest to which of the following?

(Multiple Choice)

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Question 121

Dragin Company's working capital is $36,000,and its current liabilities are $61,000.The company's current ratio is closest to which of the following?

(Multiple Choice)

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Question 122

Selected year-end data for the Brayer Company are presented below: Current Liabilities \ 600,000 Acid-Test Ratio 2.5 to 1 Current Ratio 3.0 to 1 Cost of Goods Sold \ 500,000 The company has no prepaid expenses,and inventories remained unchanged during the year.Based on these data,the company's inventory turnover ratio for the year was closest to which of the following?

(Multiple Choice)

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Question 123

Financial statements for Larned Company appear below: $Financial statements for Larned Company appear below: Shareholders' Equity: \begin{array}{|l|r|}\hline & \begin{array}{r} \text { Larned Company } \\ \text { Income Statement }\\\text { For the Year Ended December 31, Year 2 }\\\text { (dollars in thousands) } \end{array} \\ \hline \text { Sales (All on Account) } & \$ 2930 \\ \hline \text { Costs of Goods Sold } & \$ 2050 \\ \hline \text { Gross Margin } & \$ 880 \\ \hline \text { Operating Expenses } & \$ 350 \\ \hline \text { Net Operating Income } & \$ 530 \\ \hline \text { Interest Expense } & \$ 40 \\ \hline \text { Net Income before Taxes } & \$ 490 \\ \hline \text { Income Taxes }(30 \%) & \$ 147 \\ \hline \text { Net Income } & \$ 343 \\ \hline \end{array} Total dividends during Year 2 were \$ 263,000 , of which \$ 12,000 were for preferred shares. The market price of a common share on December 31, Year 2 was \$ 160 . -Larned Company's earnings per common share for Year 2 was closest to which of the following?$ Shareholders' Equity: Larned Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2930 Costs of Goods Sold \ 2050 Gross Margin \ 880 Operating Expenses \ 350 Net Operating Income \ 530 Interest Expense \ 40 Net Income before Taxes \ 490 Income Taxes (30\%) \ 147 Net Income \ 343 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 earnings per common share for Year 2 was closest to which of the following?

(Multiple Choice)

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Question 124

Financial statements for Qiang Company appear below: $Financial statements for Qiang Company appear below: \begin{array}{|l|r|}\hline&\begin{array}{r} \text { Qiang Company } \\ \text { Income Statement }\\\text { For the Year Ended December 31, Year 2} \\ \text { (dollars in thousands) } \end{array} \\ \hline \text { Sales (All on Account) } & \$ 1500 \\ \hline \text { Costs of Goods Sold } & \$ 1050 \\ \hline \text { Gross Margin } & \$ 450 \\ \hline \text { Operating Expenses } & \$ 180 \\ \hline \text { Net Operating Income } & \$ 270 \\ \hline \text { Interest Expense } & \$ 40 \\ \hline \text { Net Income before Taxes } & \$ 230 \\ \hline \text { Income Taxes (30\%) } & \$ 69 \\ \hline \text { Net Income } & \$ 161 \\ \hline \end{array} Total dividends paid during Year 2 were $61,000,of which $12,000 were for preferred shares.The market price of a common share on December 31,Year 2 was $50. The preferred shares are convertible to common shares on the basis of four common shares for each preferred share. Required: Calculate the following for Year 2: a)Basic earnings per common share. b)Fully diluted earnings per common share. c)Price-earnings ratio (use basic earnings per share). d)Dividend yield ratio. e)Return on total assets. f)Return on common shareholders' equity. g)Book value per share.$ Qiang Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 1500 Costs of Goods Sold \ 1050 Gross Margin \ 450 Operating Expenses \ 180 Net Operating Income \ 270 Interest Expense \ 40 Net Income before Taxes \ 230 Income Taxes (30\%) \ 69 Net Income \ 161 Total dividends paid during Year 2 were $61,000,of which $12,000 were for preferred shares.The market price of a common share on December 31,Year 2 was $50. The preferred shares are convertible to common shares on the basis of four common shares for each preferred share. Required: Calculate the following for Year 2: a)Basic earnings per common share. b)Fully diluted earnings per common share. c)Price-earnings ratio (use basic earnings per share). d)Dividend yield ratio. e)Return on total assets. f)Return on common shareholders' equity. g)Book value per share.

(Essay)

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Question 125

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?

(Multiple Choice)

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Question 126

If a firm has a high current ratio but a low acid-test ratio,one can conclude which of the following?

(Multiple Choice)

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Question 127

Financial statements for Orantes Company appear below: $Financial statements for Orantes Company appear below: \begin{array}{|l|r|} \hline&\text { Orange Company } \\ &\text { Income Statement } \\ &\text { For the Year Ended December 31, Year } \\ &2\\ &\text { (dollars in thousands) }\\ \hline\text { Sales (All on Account) } & \$ 2510 \\ \hline \text { Costs of Goods Sold } & \$ 1750 \\ \hline \text { Gross Margin } & \$ 760 \\ \hline \text { Operating Expenses } & \$ 300 \\ \hline \text { Net Operating Income } & \$ 460 \\ \hline \text { Interest Expense } & \$ 30 \\ \hline \text { Net Income before Taxes } & \$ 430 \\ \hline \text { Income Taxes (30\%) } & \$ 129 \\ \hline \text { Net Income } & \$ 301\\ \hline \end{array} Total dividends during Year 2 were \$ 181,000 , of which \$ 12,000 were preferred dividends. The market price of a common share on December 31, Year 2 was \$ 280 . -Orantes Company's average sale period (turnover in days)for Year 2 was closest to which of the following?Do not round intermediate calculations.$ Orange Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2510 Costs of Goods Sold \ 1750 Gross Margin \ 760 Operating Expenses \ 300 Net Operating Income \ 460 Interest Expense \ 30 Net Income before Taxes \ 430 Income Taxes (30\%) \ 129 Net Income \ 301 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 average sale period (turnover in days)for Year 2 was closest to which of the following?Do not round intermediate calculations.

(Multiple Choice)

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Question 128

The following financial data have been taken from the records of CPZ Enterprises. Accounts Receivable \ 200000 Accounts Payable \ 80000 Bonds Payable, Due in Ten Years \ 300000 Cash \ 100000 Interest Payable, Due in Three Months \ 10000 Inventory \ 440000 Land \ 250000 Notes Payable, Due in Six Months \ 50000 -What is the company's acid-test (quick)ratio?

(Multiple Choice)

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Question 129

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?

(Multiple Choice)

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Question 130

Selected financial data for Barnstable Company appear below: Year 2 Year 1 Sales (in thousands) Operating Expense \ 1,500 \ 1,200 Interest Expense \ 450 \ 400 Cost of Goods Sold \ 75 \ 30 Dividends Declared and Paid \ 900 \ 720 -For Year 2,what was the gross margin as a percentageof sales?

(Multiple Choice)

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Question 131

The market price of XYZ Company's common shares dropped from $25 to $21 per share.The dividend paid per share remained unchanged.How would the company's dividend payout ratio change?

(Multiple Choice)

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Question 132

Brawer Company's net income last year was $55,000,and its interest expense was $20,000.Total assets at the beginning of the year were $660,000,and total assets at the end of the year were $620,000.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?

(Multiple Choice)

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Question 133

Financial statements for Marcell Company appear below: $Financial statements for Marcell Company appear below: \begin{array}{|l|r|} \hline &\begin{array}{r} \text { Marcell Company } \\ \text { Income Statement }\\\text { For the Year Ended December 31, Year } \\ 2 \\ \text { (dollars in thousands) } \\ \end{array} \\\hline \text { Sales (All on Account) } & \$ 2550 \\ \hline \text { Costs of Goods Sold } & \$ 1780 \\ \hline \text { Gross Margin } & \$ 770 \\ \hline \text { Operating Expenses } & \$ 300 \\ \hline \text { Net Operating Income } & \$ 470 \\ \hline \text { Interest Expense } & \$ 50 \\ \hline \text { Net Income before Taxes } & \$ 420 \\ \hline \text { Income Taxes (30\%) } & \$ 126 \\ \hline \text { Net Income } & \$ 294 \\ \hline \end{array} -Marcell Company's average collectionperiod (age of receivables)for Year 2 was closest to which of the following?$ Marcell Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2550 Costs of Goods Sold \ 1780 Gross Margin \ 770 Operating Expenses \ 300 Net Operating Income \ 470 Interest Expense \ 50 Net Income before Taxes \ 420 Income Taxes (30\%) \ 126 Net Income \ 294 -Marcell Company's average collectionperiod (age of receivables)for Year 2 was closest to which of the following?

(Multiple Choice)

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Question 134

Financial statements for Marcell Company appear below: $Financial statements for Marcell Company appear below: \begin{array}{|l|r|} \hline &\begin{array}{r} \text { Marcell Company } \\ \text { Income Statement }\\\text { For the Year Ended December 31, Year } \\ 2 \\ \text { (dollars in thousands) } \\ \end{array} \\\hline \text { Sales (All on Account) } & \$ 2550 \\ \hline \text { Costs of Goods Sold } & \$ 1780 \\ \hline \text { Gross Margin } & \$ 770 \\ \hline \text { Operating Expenses } & \$ 300 \\ \hline \text { Net Operating Income } & \$ 470 \\ \hline \text { Interest Expense } & \$ 50 \\ \hline \text { Net Income before Taxes } & \$ 420 \\ \hline \text { Income Taxes (30\%) } & \$ 126 \\ \hline \text { Net Income } & \$ 294 \\ \hline \end{array} -Marcell Company's current ratio at the end of Year 2 was closest to which of the following?$ Marcell Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2550 Costs of Goods Sold \ 1780 Gross Margin \ 770 Operating Expenses \ 300 Net Operating Income \ 470 Interest Expense \ 50 Net Income before Taxes \ 420 Income Taxes (30\%) \ 126 Net Income \ 294 -Marcell Company's current ratio at the end of Year 2 was closest to which of the following?

(Multiple Choice)

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Question 135

Financial statements for Marcial Company appear below: 11ee3cef_af3d_14b8_8c2a_ab0280ef355e_TB1327_11 -Marcial Company's accounts receivableturnover for Year 2 was closest to which of the following?

(Multiple Choice)

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Question 136

Rahner Company has a current ratio of 1.75 to 1.This ratio will decrease if Rahner Company engages in which of the following transactions?

(Multiple Choice)

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Question 137

Selected financial data for Barnstable Company appear below: Year 2 Year 1 Sales (in thousands) Operating Expense \ 1,500 \ 1,200 Interest Expense \ 450 \ 400 Cost of Goods Sold \ 75 \ 30 Dividends Declared and Paid \ 900 \ 720 -For Year 2,what was the net income before taxes as a percentageof sales?

(Multiple Choice)

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Question 138

Selected data for the Boat Rental Company follow: Current Year Prior Year Preferred Shares, 8\% Par Value \ 50 \ 250000 \ 250000 Common Shares, Per Value \ 10 \ 500000 \ 500000 Retained Earnings at End of Year \ 257000 \ 240000 Net Income \ 102000 \ 90000 Dividends Paid on Preferred Shares \2 0000 \2 0000 Dividends Paid on Common Shares \ 55000 \5 0000 Quoted Market Price per Common Share at Year End \ 25 \2 0 -What was the dividend payout ratio for the prior year?

(Multiple Choice)

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Question 139

Harwichport Company has a current ratio of 3.5 to 1 and an acid-test ratio of 2.8 to 1.Current assets equal $175,000,of which $5,000 consists of prepaid expenses.What must be Harwichport Company's inventory?

(Multiple Choice)

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Question 140

Showing 121 - 140 of 203

Dragin Company's working capital is $36,000,and its current liabilities are $61,000.The company's current ratio is closest to which of the following?

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?

If a firm has a high current ratio but a low acid-test ratio,one can conclude 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?

Selected financial data for Barnstable Company appear below: Year 2 Year 1 Sales (in thousands) Operating Expense \ 1,500 \ 1,200 Interest Expense \ 450 \ 400 Cost of Goods Sold \ 75 \ 30 Dividends Declared and Paid \ 900 \ 720 -For Year 2,what was the gross margin as a percentageof sales?

The market price of XYZ Company's common shares dropped from $25 to $21 per share.The dividend paid per share remained unchanged.How would the company's dividend payout ratio change?

Financial statements for Marcial Company appear below: 11ee3cef_af3d_14b8_8c2a_ab0280ef355e_TB1327_11 -Marcial Company's accounts receivableturnover for Year 2 was closest to which of the following?

Rahner Company has a current ratio of 1.75 to 1.This ratio will decrease if Rahner Company engages in which of the following transactions?

Harwichport Company has a current ratio of 3.5 to 1 and an acid-test ratio of 2.8 to 1.Current assets equal $175,000,of which $5,000 consists of prepaid expenses.What must be Harwichport Company's inventory?

Managerial Accounting and the Business Environment

Cost Terms,concepts,and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: A Tool to Aid Decision Making

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

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