Exam 3: Understanding Financial Statements,taxes,and Cash Flows

The income statement represents a snapshot of account balances at one point in time.

The cash flow statement is an alternative term for the balance sheet.

Your firm has the following income statement items: sales of $50,250,000;income tax of $1,744,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.What is the amount of the firm's gross profit?

The company's gross profit margin is EBIT divided by net sales.

When a corporation sells common stock to investors,the amount is added to revenue on the income statement.

Gross plant and equipment minus accumulated depreciation represents the fair market value of a company's fixed assets.

When a company pays a dividend on common stock,it appears as

A firm's balance sheet provides a representation of the current market value of the company.

The ratio of ________ to ________ is an indicator of the quality of a firm's earnings.

Your firm has the following income statement items: sales of $50,250,000;income tax of $1,744,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.What is the amount of the firm's EBIT?

Based on the information given in Table 1,calculate the dividends paid in 1996.

Using the information provided,calculate net income for 2013.Assume a tax rate of 35 percent. Year 2013 Inventory $5,000 Revenues 200,000 Depreciation expense 5,000 Cost of goods sold 100,000 Interest expense 10,000 Operating expenses 30,000

Which of the following would NOT be included as a liability in a corporate balance sheet?

Under current accounting rules,plant and equipment appear on a company's balance sheet valued at replacement value.

Your firm has the following income statement items: sales of $52,000,000;income tax of $1,880,000;operating expenses of $9,000,000;cost of goods sold of $36,000,000;and interest expense of $800,000.Compute the firm's gross profit margin.

On an accrual basis income statement,revenues and expenses always match the firm's cash flow.