Question 1

The operating-cash-flow-to-current-liabilities ratio is computed by dividing a firm's a net cash flow from operating activities by:

Accepted Answer

A)  Current liabilities at the end of the period 
B)  Current liabilities at the beginning of the period 
C)  Total liabilities at the middle of the period 
D)  Average current liabilities for the period 
A)  Current liabilities at the end of the period 
B)  Current liabilities at the beginning of the period 
C)  Total liabilities at the middle of the period 
D)  Average current liabilities for the period

Question 2

Consider the following results for Camire Brothers:
   Prepare the income statement for this company assuming a 35% income tax rate. Omit the statement heading.

Accepted Answer

@#IMG-DLM& Results from discontinued ope

Question 3

The price-earnings ratio indicates how much an investor would have to earn to be able to purchase the stock.

Accepted Answer

A) True 
 B)False

Question 4

The balance sheets and income statements for Star Morning Communications follow: 
   
   a. Compute the company's current ratio for 2019 and 2018. Comment on any observed trend.
b. Compute the debt-to-equity ratio for 2019 and 2018. Comment on any observed trend.

Accepted Answer

a. 2019 current ratio = $111,123 / $101,

Question 5

Selected recent balance sheet and income statement information for Summersun, Inc. follows:
 $$\begin{array} { l r r } 
\text { (in millions) } & 2019 & 2018 \
\hline \text { Average inventory } & \mathbf { 7 , 0 2 9 } & \mathbf { \$ 7 , 8 2 1 } \
\text { Average accounts receivable } & \mathbf { 7 , 3 0 5 } & \mathbf { 7 , 9 8 9 } \
\text { Average accounts payable } & \mathbf { 2 , 9 4 9 } & \mathbf { 3 , 4 0 0 } \
\text { Sales } & \mathbf { 3 7 , 8 0 0 } & \mathbf { 5 0 , 1 9 7 } \
\text { Cost of goods sold } & \mathbf { 3 0 , 2 0 9 } & \mathbf { 3 9 , 9 0 7 } \
\hline
\end{array}$$ a. Calculate accounts receivable turnover for 2019 and 2018. Has it improved during the year or worsened?
b. Calculate inventory turnover for 2019 and 2018. Has it improved during the year or worsened?

Accepted Answer

a. 2019 accounts receivable turnover = $

Question 6

Selected balance sheet and income statement information for two manufacturing companies: Stripe, Inc. and Polka-dot Corporation follows:
 $\begin{array}{|c|c|c|}
\hline & \begin{array}{c}
\text { Stripe } \
\text { (in } \$ \text { millions) }
\end{array} & \begin{array}{l}
\text { Polka-dot } \
\text { (in } \$ \text { millions) }
\end{array} \
\hline \text { Cash } & \$ 1,860 & \$ 26,558 \
\hline \text { Marketable securities } & 380 & 110 \
\hline \text { Accounts receivable } & 3,460 & 38,424 \
\hline \text { All other current assets } & 4,306 & 39,986 \
\hline \text { Total current liabilities } & 7,296 & 129,009 \
\hline \text { Total liabilities } & 9,592 & 148,564 \
\hline \text { Total equity } & 12,060 & 121,551 \
\hline \text { Pre-tax income } & 1,280 & 18,830 \
\hline \text { Interest expense } & 105 & 1,791 \
\hline
\end{array}$
 a. Calculate the current ratio and quick ratio for both companies.
b. Which company is more liquid?
c. Calculate the times-interest-earned ratio and debt-to-equity ratio for both companies.
d. Which company is more solvent?

Accepted Answer

@#IMG-DLM& b. Both companies are liquid, but Strip

Question 7

A change in an accounting principle is reflected through adjustments to future financial statements and, therefore, requires no retroactive or present adjustments to financial statements.

Accepted Answer

A) True 
 B)False

Question 8

Selected recent balance sheet and income statement information for the computer software companies, Valley Enterprises and Mountain Industries follow:
 $\begin{array}{lrr}
\text { (\$ millions) } & {\begin{array}{c}
\text { Valley } \
\text { Enterprises }
\end{array}} & \begin{array}{r}
\text { Mountain } \
\text { Industries }
\end{array} \
\hline \text { Average accounts receivable } & \$ 36,414 & \$ 46,539 \
\text { Average accounts payable } & 8,194 & 14,436 \
\text { Net sales } & 215,616 & 246,036 \
\text { Cost of goods sold } & 88,598 & 100,810 \
\text { Net income } & 17,302 & 25,070 \
\text { Income tax expense } & 6,520 & 10,028
\end{array}$
 a. Compute accounts receivable turnover for Valley Enterprises and Mountain Industries.
b. Interpret and comment on the differences between the receivables turnover rates between each company assuming the industry average is 6.0 times.

Accepted Answer

a. Valley: $215,616 / $36,414 = 5.92 tim

Question 9

Listed below are five items or sections that may be found in a multiple-step income statement. Place the numbers 1 through 5 in to indicate the sequence of these items or sections in the income statement (with 1 assigned to the first item or section, and so on).
-Net income

Accepted Answer

A)  3 
B)  4 
C)  5 
D)  6 
E)  7 
A)  3 
B)  4 
C)  5 
D)  6 
E)  7

Question 10

Listed below are five items or sections that may be found in a multiple-step income statement. Place the numbers 1 through 5 in to indicate the sequence of these items or sections in the income statement (with 1 assigned to the first item or section, and so on).
-Discontinued operations

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
E)  5 
A)  1 
B)  2 
C)  3 
D)  4 
E)  5

Question 11

Aladdin Grocer's 2019 financial statements show net income of $2,940 million, sales of $230,199 million, and average total assets of $69,525 million.
How much is Aladdin Grocer's return on sales for the year?

Accepted Answer

A)  4.24% 
B)  1.28% 
C)  35.39% 
D)  7.52% 
A)  4.24% 
B)  1.28% 
C)  35.39% 
D)  7.52%

Question 12

Asset turnover measures a company's solvency.

Accepted Answer

A) True 
 B)False

Question 13

Javier Company reported net income of $4,550 million in 2019. The weighted average number of common shares outstanding during 2019 was 1,662 million shares. Javier paid $135 million in dividends on preferred stock.
How much is basic earnings per share amount for 2019?

Accepted Answer

A)  $2.61 
B)  $2.55 
C)  $2.66 
D)  $2.75 
A)  $2.61 
B)  $2.55 
C)  $2.66 
D)  $2.75

Question 14

At December 31, 2019, Van Beek's price-earnings ratio was 14.6. For 2019, Van Beek's net income was $1,980,000, its earnings per share was $21.00, and its annual dividend per share was $12.00.
What was the per share market price of Van Beek's stock at December 31, 2019?

Accepted Answer

A)  $306.60 
B)  $199.20 
C)  $248.40 
D)  $175.20 
A)  $306.60 
B)  $199.20 
C)  $248.40 
D)  $175.20

Question 15

In computing the price-earnings ratio, the current per share market price of the firm's common stock is divided by the:

Accepted Answer

A)  Par value per common share 
B)  Dividends per common share 
C)  Earnings per common share 
D)  Net income for the year 
A)  Par value per common share 
B)  Dividends per common share 
C)  Earnings per common share 
D)  Net income for the year

Question 16

Income effects of discontinued operations are reported separately from continuing operations on the income statement.

Accepted Answer

A) True 
 B)False

The operating-cash-flow-to-current-liabilities ratio is computed by dividing a firm's a net cash flow from operating activities by:

Consider the following results for Camire Brothers: Prepare the income statement for this company assuming a 35% income tax rate. Omit the statement heading.

The price-earnings ratio indicates how much an investor would have to earn to be able to purchase the stock.

The balance sheets and income statements for Star Morning Communications follow: a. Compute the company's current ratio for 2019 and 2018. Comment on any observed trend. b. Compute the debt-to-equity ratio for 2019 and 2018. Comment on any observed trend.

A change in an accounting principle is reflected through adjustments to future financial statements and, therefore, requires no retroactive or present adjustments to financial statements.

Listed below are five items or sections that may be found in a multiple-step income statement. Place the numbers 1 through 5 in to indicate the sequence of these items or sections in the income statement (with 1 assigned to the first item or section, and so on). -Net income

Listed below are five items or sections that may be found in a multiple-step income statement. Place the numbers 1 through 5 in to indicate the sequence of these items or sections in the income statement (with 1 assigned to the first item or section, and so on). -Discontinued operations

Aladdin Grocer's 2019 financial statements show net income of $2,940 million, sales of $230,199 million, and average total assets of $69,525 million. How much is Aladdin Grocer's return on sales for the year?

Asset turnover measures a company's solvency.

Javier Company reported net income of $4,550 million in 2019. The weighted average number of common shares outstanding during 2019 was 1,662 million shares. Javier paid $135 million in dividends on preferred stock. How much is basic earnings per share amount for 2019?

At December 31, 2019, Van Beek's price-earnings ratio was 14.6. For 2019, Van Beek's net income was $1,980,000, its earnings per share was $21.00, and its annual dividend per share was $12.00. What was the per share market price of Van Beek's stock at December 31, 2019?

In computing the price-earnings ratio, the current per share market price of the firm's common stock is divided by the:

Income effects of discontinued operations are reported separately from continuing operations on the income statement.

Overview of Managerial Accounting

Managerial Accounting Concepts and Cost Flows

Cost Accounting Systems: Job Order Costing

Cost Accounting Systems: Process Costing

Activity-Based Costing

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Decision Making

Relevant Costs and Short-Term Decision Making

Planning and Budgeting

Standard Costing and Variance Analysis

Flexible Budgets, Segment Analysis, and Performance Reporting

Capital Budgeting

Statement of Cash Flows

Appendix: Accounting and the Time Value of Money

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Exam 14: Analysis and Interpretation of Financial Statements

The operating-cash-flow-to-current-liabilities ratio is computed by dividing a firm's a net cash flow from operating activities by:

Consider the following results for Camire Brothers: Prepare the income statement for this company assuming a 35% income tax rate. Omit the statement heading.

The price-earnings ratio indicates how much an investor would have to earn to be able to purchase the stock.

The balance sheets and income statements for Star Morning Communications follow: a. Compute the company's current ratio for 2019 and 2018. Comment on any observed trend. b. Compute the debt-to-equity ratio for 2019 and 2018. Comment on any observed trend.

A change in an accounting principle is reflected through adjustments to future financial statements and, therefore, requires no retroactive or present adjustments to financial statements.

Listed below are five items or sections that may be found in a multiple-step income statement. Place the numbers 1 through 5 in to indicate the sequence of these items or sections in the income statement (with 1 assigned to the first item or section, and so on). -Net income

Listed below are five items or sections that may be found in a multiple-step income statement. Place the numbers 1 through 5 in to indicate the sequence of these items or sections in the income statement (with 1 assigned to the first item or section, and so on). -Discontinued operations

Aladdin Grocer's 2019 financial statements show net income of $2,940 million, sales of $230,199 million, and average total assets of $69,525 million. How much is Aladdin Grocer's return on sales for the year?

Asset turnover measures a company's solvency.

Javier Company reported net income of $4,550 million in 2019. The weighted average number of common shares outstanding during 2019 was 1,662 million shares. Javier paid $135 million in dividends on preferred stock. How much is basic earnings per share amount for 2019?

At December 31, 2019, Van Beek's price-earnings ratio was 14.6. For 2019, Van Beek's net income was $1,980,000, its earnings per share was $21.00, and its annual dividend per share was $12.00. What was the per share market price of Van Beek's stock at December 31, 2019?

In computing the price-earnings ratio, the current per share market price of the firm's common stock is divided by the:

Income effects of discontinued operations are reported separately from continuing operations on the income statement.

Overview of Managerial Accounting

Managerial Accounting Concepts and Cost Flows

Cost Accounting Systems: Job Order Costing

Cost Accounting Systems: Process Costing

Activity-Based Costing

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Decision Making

Relevant Costs and Short-Term Decision Making

Planning and Budgeting

Standard Costing and Variance Analysis

Flexible Budgets, Segment Analysis, and Performance Reporting

Capital Budgeting

Statement of Cash Flows

Appendix: Accounting and the Time Value of Money

Filters