Question 1

Financial statements for Maraby Corporation appear below:     Maraby Corporation's average collection period for Year 2 was closest to:

Accepted Answer

A) 38.6 days 
B) 46.6 days 
C) 32.6 days 
D) 27.0 days 
A) 38.6 days 
B) 46.6 days 
C) 32.6 days 
D) 27.0 days

Question 2

Cutsinger Corporation has provided the following data from its most recent income statement:   The times interest earned ratio is closest to:

Accepted Answer

A) 1.83 
B) 0.28 
C) 1.28 
D) 0.19 
A) 1.83 
B) 0.28 
C) 1.28 
D) 0.19

Question 3

Freiman Corporation's most recent balance sheet and income statement appear below:     The average collection period for Year 2 is closest to:

Accepted Answer

A) 64.0 days 
B) 0.9 days 
C) 61.3 days 
D) 1.1 days 
A) 64.0 days 
B) 0.9 days 
C) 61.3 days 
D) 1.1 days

Question 4

Excerpts from Colter Corporation's most recent balance sheet appear below:   Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

Accepted Answer

A) 1.10 
B) 0.91 
C) 11.52 
D) 12.10 
A) 1.10 
B) 0.91 
C) 11.52 
D) 12.10

Question 5

Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1.   The company's gross margin percentage for Year 2 is closest to:

Accepted Answer

A) 4.9% 
B) 61.4% 
C) 38.1% 
D) 2031.9% 
A) 4.9% 
B) 61.4% 
C) 38.1% 
D) 2031.9%

Question 6

Windham Corporation has current assets of $400,000 and current liabilities of $500,000. Windham Corporation's current ratio would be increased by:

Accepted Answer

A) the purchase of $100,000 of inventory on account. 
B) the payment of $100,000 of accounts payable. 
C) the collection of $100,000 of accounts receivable. 
D) refinancing a $100,000 long-term loan with short-term debt. 
A) the purchase of $100,000 of inventory on account. 
B) the payment of $100,000 of accounts payable. 
C) the collection of $100,000 of accounts receivable. 
D) refinancing a $100,000 long-term loan with short-term debt.

Question 7

Excerpts from Colter Corporation's most recent balance sheet appear below:   Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The working capital at the end of Year 2 is:

Accepted Answer

A) $850 
B) $770 
C) $400 
D) $80 
A) $850 
B) $770 
C) $400 
D) $80

Question 8

Freiman Corporation's most recent balance sheet and income statement appear below:     The accounts receivable turnover for Year 2 is closest to:

Accepted Answer

A) 5.95 
B) 5.70 
C) 1.09 
D) 0.92 
A) 5.95 
B) 5.70 
C) 1.09 
D) 0.92

Question 9

Wegener Corporation's most recent balance sheet and income statement appear below:     Required:
Compute the following for Year 2:
a. Working capital.
b. Current ratio.
c. Acid-test ratio.
d. Accounts receivable turnover.
e. Average collection period.
f. Inventory turnover.
g. Average sale period.

Accepted Answer

a. Working capital = Current assets - Cu

Question 10

Grosvenor Corporation's most recent income statement appears below: $$\begin{array} { | l | r | } 
\hline \text { Sales (all on account) } & \$ 807,000 \
\hline \text { Cost of goods sold } & 446,000 \
\hline \text { Gross margin } & 361,000 \
\hline \text { Selling and administrative expense } & 186,000 \
\hline \text { Net operating income } & 175,000 \
\hline \text { Interest expense } & 39,000 \
\hline \text { Net income before taxes } & 136,000 \
\hline \text { Income taxes } & 40,000 \
\hline \text { Net income } & \$ 96,000 \
\hline
\end{array}$$ The gross margin percentage is closest to:

Accepted Answer

A) 80.9% 
B) 44.7% 
C) 376.0% 
D) 26.6% 
A) 80.9% 
B) 44.7% 
C) 376.0% 
D) 26.6%

Question 11

Stimac Corporation has total cash of $210,000, no marketable securities, total current receivables of $281,000, total inventory of $151,000, total prepaid expenses of $53,000, total current assets of $695,000, total current liabilities of $261,000, total stockholders' equity of $1,014,000, total assets of $1,415,000, and total liabilities of $401,000. The company's acid-test (quick) ratio is closest to:

Accepted Answer

A) 2.08 
B) 1.73 
C) 2.66 
D) 1.88 
A) 2.08 
B) 1.73 
C) 2.66 
D) 1.88

Question 12

Arkin Corporation's total current assets are $290,000, its noncurrent assets are $520,000, its total current liabilities are $210,000, its long-term liabilities are $420,000, and its stockholders' equity is $180,000.
Required:
Compute the company's working capital. Show your work!

Accepted Answer

Working capital = Cu

Question 13

Tobia Corporation has provided the following financial data:     Dividends on common stock during Year 2 totaled $6,300. The market price of common stock at the end of Year 2 was $1.78 per share.
Required:
a. What is the company's times interest earned for Year 2?
b. What is the company's debt-to-equity ratio at the end of Year 2?
c. What is the company's equity multiplier at the end of Year 2?
d. What is the company's earnings per share for Year 2?
e. What is the company's price-earnings ratio for Year 2?
f. What is the company's dividend payout ratio for Year 2?
g. What is the company's dividend yield ratio for Year 2?
h. What is the company's book value per share at the end of Year 2?

Accepted Answer

a. Times interest earned = Net operating

Question 14

Financial statements for Narstad Corporation appear below:     Narstad Corporation's debt-to-equity ratio at the end of Year 2 was closest to:

Accepted Answer

A) 0.50 
B) 0.36 
C) 0.19 
D) 0.17 
A) 0.50 
B) 0.36 
C) 0.19 
D) 0.17

Question 15

All other things the same, if a company uses long-term debt to purchase land to develop in the future, the company's return on total assets will decrease.

Accepted Answer

A) True 
 B)False

Question 16

Sperle Corporation has provided the following data concerning its stockholders' equity accounts:   Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share. The company's earnings per share for Year 2 is closest to:

Accepted Answer

A) $8.18 per share 
B) $0.38 per share 
C) $0.54 per share 
D) $0.68 per share 
A) $8.18 per share 
B) $0.38 per share 
C) $0.54 per share 
D) $0.68 per share

Question 17

Financial statements for Maraby Corporation appear below:     Maraby Corporation's average sale period for Year 2 was closest to:

Accepted Answer

A) 38.8 days 
B) 32.6 days 
C) 46.6 days 
D) 27.0 days 
A) 38.8 days 
B) 32.6 days 
C) 46.6 days 
D) 27.0 days

Question 18

A company's current ratio is greater than 1. Purchasing raw materials on credit would:

Accepted Answer

A) increase the current ratio. 
B) decrease the current ratio. 
C) increase net working capital. 
D) decrease net working capital. 
A) increase the current ratio. 
B) decrease the current ratio. 
C) increase net working capital. 
D) decrease net working capital.

Question 19

Freiman Corporation's most recent balance sheet and income statement appear below:     The inventory turnover for Year 2 is closest to:

Accepted Answer

A) 0.92 
B) 6.50 
C) 1.08 
D) 6.24 
A) 0.92 
B) 6.50 
C) 1.08 
D) 6.24

Question 20

Two-Rivers Inc. (TRI) manufactures a variety of consumer products. The company's founders have run the company for thirty years and are now interested in retiring. Consequently, they are seeking a purchaser, and a group of investors is looking into the acquisition of TRI. To evaluate its financial stability, TRI was requested to provide its latest financial statements and selected financial ratios. Summary information provided by TRI is presented below.       Required:
a. Calculate the select financial ratios for the fiscal year Year 2.
b. Interpret what each of these financial ratios means in terms of TRI's financial stability and operating efficiency.

Accepted Answer

a. The calculation of selected financial

Financial statements for Maraby Corporation appear below: Maraby Corporation's average collection period for Year 2 was closest to:

Cutsinger Corporation has provided the following data from its most recent income statement: The times interest earned ratio is closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: The average collection period for Year 2 is closest to:

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. The company's gross margin percentage for Year 2 is closest to:

Windham Corporation has current assets of $400,000 and current liabilities of $500,000. Windham Corporation's current ratio would be increased by:

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The working capital at the end of Year 2 is:

Freiman Corporation's most recent balance sheet and income statement appear below: The accounts receivable turnover for Year 2 is closest to:

Wegener Corporation's most recent balance sheet and income statement appear below: Required: Compute the following for Year 2: a. Working capital. b. Current ratio. c. Acid-test ratio. d. Accounts receivable turnover. e. Average collection period. f. Inventory turnover. g. Average sale period.

Arkin Corporation's total current assets are $290,000, its noncurrent assets are $520,000, its total current liabilities are $210,000, its long-term liabilities are $420,000, and its stockholders' equity is $180,000. Required: Compute the company's working capital. Show your work!

Financial statements for Narstad Corporation appear below: Narstad Corporation's debt-to-equity ratio at the end of Year 2 was closest to:

All other things the same, if a company uses long-term debt to purchase land to develop in the future, the company's return on total assets will decrease.

Financial statements for Maraby Corporation appear below: Maraby Corporation's average sale period for Year 2 was closest to:

A company's current ratio is greater than 1. Purchasing raw materials on credit would:

Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 13: Financial Statement Analysis

Financial statements for Maraby Corporation appear below: Maraby Corporation's average collection period for Year 2 was closest to:

Cutsinger Corporation has provided the following data from its most recent income statement: The times interest earned ratio is closest to:

Freiman Corporation's most recent balance sheet and income statement appear below: The average collection period for Year 2 is closest to:

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. The company's gross margin percentage for Year 2 is closest to:

Windham Corporation has current assets of $400,000 and current liabilities of $500,000. Windham Corporation's current ratio would be increased by:

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The working capital at the end of Year 2 is:

Freiman Corporation's most recent balance sheet and income statement appear below: The accounts receivable turnover for Year 2 is closest to:

Wegener Corporation's most recent balance sheet and income statement appear below: Required: Compute the following for Year 2: a. Working capital. b. Current ratio. c. Acid-test ratio. d. Accounts receivable turnover. e. Average collection period. f. Inventory turnover. g. Average sale period.

Arkin Corporation's total current assets are $290,000, its noncurrent assets are $520,000, its total current liabilities are $210,000, its long-term liabilities are $420,000, and its stockholders' equity is $180,000. Required: Compute the company's working capital. Show your work!

Financial statements for Narstad Corporation appear below: Narstad Corporation's debt-to-equity ratio at the end of Year 2 was closest to:

All other things the same, if a company uses long-term debt to purchase land to develop in the future, the company's return on total assets will decrease.

Financial statements for Maraby Corporation appear below: Maraby Corporation's average sale period for Year 2 was closest to:

A company's current ratio is greater than 1. Purchasing raw materials on credit would:

Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters