The following information is available for the Wetzel Company: $\begin{array} { l } \text {Net income for the year ended December 31,2014 }&\$127.4\\ \text {Credit sales for the year ended December 31,2014 }&\$1,606.0\\ \text {Retained earnings, December 31,2014 }&150.0\\ \text {Retained earnings, December 31, 2013 }&180.0\\ \text {Total assets, December 31, 2014 }&470.0\\ \text {Total assets, December 31, 2013 }&442.0\\ \text { Total liabilities, December 31, 2014}&240.0\\ \text { Total liabilities, December 31, 2013}&182.0\\ \text {Accounts Receivable, December 31, 2014 }&180.0\\ \text {Accounts Receivable December 31,2013 }&144.0\\ \end{array}$ What is the average collection period in days for the year ended December 31,2014?

A) 5.0 B) 36.8 C) 40.9 D) 77.3 A) 5.0 B) 36.8 C) 40.9 D) 77.3 B

Keller Company has the following income statement for the year ending December 31,2016: $\begin{array}{ll} \text { Sales } & \$ 1,562 \\ \text { Cost of goods sold } & {806} \\ \text { Gross profit } &{756} \end{array}$ Operating expenses: $\begin{array}{ll} \text { Wage expense } & 160 \\ \text { Depreciation expense } & 16 \\ \text { Rent expense } & 106 \\ \text { Miscellaneous expense } & \underline{10} \\ \text { Total operating expenses } & \underline{292} \\ \text { Operating income } & 464 \\ \text { Income tax expense } & \underline{162} \\ \text { Net income } & \$ 302 \end{array}$ If Keller Company prepares a common size income statement,what will they report for Rent expense?

A) 2.3% B) 4.3% C) 4.4% D) 6.8% A) 2.3% B) 4.3% C) 4.4% D) 6.8%

Presented below is the balance sheet of Harry Company at January 1,2015: $\begin{array}{ll} \text { Cash } & \$ 100 \\ \text { Net Fixed Assets } & {400} \\ \text { Total Assets } & {\$ 500} \end{array}$ $\begin{array}{ll} \text { Accounts Payable } & \$ 20 \\ \text { Long-term Bonds Payable } & 220 \\ \text { Stockholders' Equity } & {260} \\ \text { Total Liabilities and Stockholders' Equity } & \$ 500 \end{array}$ The balance sheet of Marvelous Company at January 1,2015 is below: $\begin{array}{ll} \text { Cash } & \$ 400 \\ \text { Net Fixed Assets } & {380} \\ \text { Total Assets } &{\$ 780} \end{array}$ $\begin{array}{ll} \text { Accounts Payable } & \$ 120 \\ \text { Long-term Bonds Payable } & 280 \\ \text { Stockholders' Equity } & \underline{380} \\ \text { Total Liabilities and Stockholders' Equity } & \$ 780 \end{array}$ On January 1,2015,Marvelous Company acquired 100 percent of the outstanding common stock of Harry Company for $260 cash.The book value and fair value of Harry's assets and liabilities were equal. What is the amount of Total Stockholders' Equity on the consolidated balance sheet immediately after the acquisition of Harry Company's stock? (Assume elimination entries are completed.)

A) $0 B) $260 C) $380 D) $640 A) $0 B) $260 C) $380 D) $640

The Stelloh Company reports the following information: \[\begin{array} { l l } \text { Sales for the year ended December 31, 2012 } & \$ 106,950 \\ \text { Grom profit for the year ended December } 31,2012 & \$ 45,150 \\ \text { Net income for the year ended December } 31,2012 & \$ 7,300 \\ \text { Total Current Assets, December } 31,2012 & \$ 18,700 \\ \text { Total Current Liabilities, December } 31,2012 & \$ 7,600 \\ \text { Total Assets, December } 31,2012 & \$ 48,400 \\ \text { Total Liabilities, December } 31,2012 & \$ 20,850 \\ \text { Average total common shares outtananding in } 2012 & 1,000 \\ \text { Market price per share, December } 31,2012 & \$ 75,00 \\ \text { Dividends per share, for the year ended December } 31,2012 & \$ 5.00 \end{array}\] What is the dividend payout for the year ended December 31,2012?

A) 6.7% B) 9.7% C) 65.8% D) 68.5% A) 6.7% B) 9.7% C) 65.8% D) 68.5%

Presented below is the balance sheet of Hansen Company at January 1,2015: $\begin{array}{ll} \text { Cash } & \$ 100 \\ \text { Net Fixed Assets } & \underline{400} \\ \text { Total Assets } & \$ 500 \end{array}$ $\begin{array}{ll} \text { Accounts Payable } & \$ 20 \\ \text { Long-term Bonds Payable } & 220 \\ \text { Stockholders' Equity } & \underline{260} \\ \text { Total Liabilities and Stockholders' Equity } & \$ 500 \end{array}$ The balance sheet of Monty Company at January 1,2015 is below: $\begin{array}{ll} \text { Cash } & \$ 400 \\ \text { Net Fixed Assets } &{380} \\ \text { Total Assets } &{\$ 780} \end{array}$ $\begin{array}{ll} \text { Accounts Payable } & \$ 120 \\ \text { Long-term Bonds Payable } & 280 \\ \text { Stockholders' Equity } & \underline{380} \\ \text { Total Liabilities and Stockholders' Equity } & \$ 780 \end{array}$ On January 1,2015,Monty Company acquired 100 percent of the outstanding common stock of Hansen Company for $260 cash.The book value and fair value of Hansen's assets and liabilities were equal. What is the amount of Total Liabilities on the consolidated balance sheet immediately after the acquisition of Hansen Company's stock? (Assume elimination entries are completed.)

A) $0 B) $380 C) $400 D) $640 A) $0 B) $380 C) $400 D) $640

The Conner Company reports the following information: \[\begin{array} { l l } \text { Sales for the year ended December 31, 2012 } & \$ 106,950 \\ \text { Grom profit for the year ended December } 31,2012 & \$ 52,350 \\ \text { Net income for the year ended December } 31,2012 & \$ 7,300 \\ \text { Total Current Assets, December } 31,2012 & \$ 18,700 \\ \text { Total Current Liabilities, December } 31,2012 & \$ 7,600 \\ \text { Total Assets, December } 31,2012 & \$ 48,400 \\ \text { Total Liabilities, December } 31,2012 & \$ 20,850 \\ \text { Total common shares outstanding, December } 31,2012 & 1,000 \\ \text { Market price per share, December } 31,2012 & \$ 75,00 \\ \text { Dividends per share, for the year ended December } 31,2012 & \$ 5.00 \end{array}\] What is the gross profit percentage for the year ended December 31,2012?

A) 6.8% B) 12.6% C) 16.2% D) 48.9% A) 6.8% B) 12.6% C) 16.2% D) 48.9%

The Collander Company reports the following information: $\begin{array} { l } \text {Sales for the year ended December 31,2012 }&\$106,950\\ \text {Gross profit for the year ended December 31, 2012 }&\$45,150\\ \text { Net income for the year ended December 31,2012}&\$7,300\\ \text {Total Current Assets, December 31, 2012 }&\$18,700\\ \text {Total Current Liabilities, December 31, 2012 }&\$5,600\\ \text {Total Assets, December 31, 2012 }&\$48,400\\ \text {Total Liabilities, December 31,2012 }&\$20,850\\ \text { Total common shares outstanding, December 31, 2012}&\$1,000\\ \text {Market price per share, December 31, 2012 }&\$75.00\\ \text {Dividends per share, for the year ended December 31,2012 }&\$5.00\\ \end{array}$ What is the current ratio at December 31,2012?

A) 0.90 B) 1.00 C) 2.32 D) 3.34 A) 0.90 B) 1.00 C) 2.32 D) 3.34

Exam 17: Understanding and Analyzing Consolidated Financial Statements

The following information is available for the Wetzel Company: Net income for the year ended December 31,2014 \1 27.4 Credit sales for the year ended December 31,2014 \1 ,606.0 Retained earnings, December 31,2014 150.0 Retained earnings, December 31, 2013 180.0 Total assets, December 31, 2014 470.0 Total assets, December 31, 2013 442.0 Total liabilities, December 31, 2014 240.0 Total liabilities, December 31, 2013 182.0 Accounts Receivable, December 31, 2014 180.0 Accounts Receivable December 31,2013 144.0 What is the average collection period in days for the year ended December 31,2014?

Free

(Multiple Choice)

4.9/5

(30)

Question 1

Correct Answer:

Verified

B

Robert Company acquired 40% of the voting stock of Boulder Company for $40 million.At the end of Year 1,Boulder Company reports net income of $15 million and pays cash dividends of $5 million.At the end of Year 1,the market value of Robert Company's investment in Boulder Company is $44 million.What accounts on Robert Company's books would be affected by the net income of Boulder Company?

Free

(Multiple Choice)

4.9/5

(36)

Question 2

Correct Answer:

Verified

D

In an efficient capital market,searching for ________.

Free

(Multiple Choice)

4.9/5

(33)

Question 3

Correct Answer:

Verified

B

Van Dover Company purchased common stock in Sanchez Company.During the current year,Sanchez Company earned $4,000,000 and paid dividends of $1,000,000.Assume that Van Dover Company owns 30% of the outstanding shares of Sanchez Company.Sanchez Company's dividend will affect Van Dover Company by ________.

(Multiple Choice)

4.7/5

(44)

Question 4

Keller Company has the following income statement for the year ending December 31,2016: Sales \ 1,562 Cost of goods sold 806 Gross profit 756 Operating expenses: Wage expense 160 Depreciation expense 16 Rent expense 106 Miscellaneous expense Total operating expenses Operating income 464 Income tax expense Net income \ 302 If Keller Company prepares a common size income statement,what will they report for Rent expense?

(Multiple Choice)

5.0/5

(32)

Question 5

On January 1,2012,Parrot Company acquired all of the stock of a subsidiary.The following data is available: Parrot Company Subsidiary Total assets \ 650 \ 400 Total liabilities \ 200 \ 190 Total stockholders' equity \ 450 \ 210 The acquisition by the Parrot Company represents a 100 percent interest in the subsidiary.On January 1,2012,the fair value of the subsidiary's assets and liabilities are equal to their book value.Parrot Company paid $450 for the 100 percent interest in the subsidiary.What amount of goodwill is implied in the purchase?

(Multiple Choice)

4.8/5

(37)

Question 6

In accordance with Generally Accepted Accounting Principles in the United States,the ________ must be reported on the financial statements.

(Multiple Choice)

4.8/5

(47)

Question 7

Accountants require investors with significant influence,but not control,over the decisions of an investee firm to use the ________ method.

(Multiple Choice)

4.9/5

(32)

Question 8

Presented below is the balance sheet of Harry Company at January 1,2015: Cash \ 100 Net Fixed Assets 400 Total Assets \ 500 Accounts Payable \ 20 Long-term Bonds Payable 220 Stockholders' Equity 260 Total Liabilities and Stockholders' Equity \ 500 The balance sheet of Marvelous Company at January 1,2015 is below: Cash \ 400 Net Fixed Assets 380 Total Assets \ 780 Accounts Payable \ 120 Long-term Bonds Payable 280 Stockholders' Equity Total Liabilities and Stockholders' Equity \ 780 On January 1,2015,Marvelous Company acquired 100 percent of the outstanding common stock of Harry Company for $260 cash.The book value and fair value of Harry's assets and liabilities were equal. What is the amount of Total Stockholders' Equity on the consolidated balance sheet immediately after the acquisition of Harry Company's stock? (Assume elimination entries are completed.)

(Multiple Choice)

4.8/5

(32)

Question 9

The Stelloh Company reports the following information: Sales for the year ended December 31, 2012 \ 106,950 Grom profit for the year ended December 31,2012 \ 45,150 Net income for the year ended December 31,2012 \ 7,300 Total Current Assets, December 31,2012 \ 18,700 Total Current Liabilities, December 31,2012 \ 7,600 Total Assets, December 31,2012 \ 48,400 Total Liabilities, December 31,2012 \ 20,850 Average total common shares outtananding in 2012 1,000 Market price per share, December 31,2012 \ 75,00 Dividends per share, for the year ended December 31,2012 \ 5.00 What is the dividend payout for the year ended December 31,2012?

(Multiple Choice)

4.8/5

(30)

Question 10

The following information is available for Ward Company: Sales \1 89,400 Gross profit \ 56,400 Net income \ 25,800 Total current assets \ 32,400 Total current liabilities \ 34,400 Total stockholders' equity, last year \1 92,000 Total stockholders' equity, current year \2 80,000 Required: Compute the following ratios: A) Current ratio B) Gross profit rate C) Return on sales D) Return on stockholders' equity

(Essay)

4.8/5

(41)

Question 11

Presented below is the balance sheet of Hansen Company at January 1,2015: Cash \ 100 Net Fixed Assets Total Assets \ 500 Accounts Payable \ 20 Long-term Bonds Payable 220 Stockholders' Equity Total Liabilities and Stockholders' Equity \ 500 The balance sheet of Monty Company at January 1,2015 is below: Cash \ 400 Net Fixed Assets 380 Total Assets \ 780 Accounts Payable \ 120 Long-term Bonds Payable 280 Stockholders' Equity Total Liabilities and Stockholders' Equity \ 780 On January 1,2015,Monty Company acquired 100 percent of the outstanding common stock of Hansen Company for $260 cash.The book value and fair value of Hansen's assets and liabilities were equal. What is the amount of Total Liabilities on the consolidated balance sheet immediately after the acquisition of Hansen Company's stock? (Assume elimination entries are completed.)

(Multiple Choice)

4.8/5

(30)

Question 12

Under the equity method of accounting for investments,the investor recognizes income for ________.

(Multiple Choice)

4.7/5

(35)

Question 13

In an efficient capital market,the appropriate investment strategy for most investors is the ________.

(Multiple Choice)

4.9/5

(37)

Question 14

The Conner Company reports the following information: Sales for the year ended December 31, 2012 \ 106,950 Grom profit for the year ended December 31,2012 \ 52,350 Net income for the year ended December 31,2012 \ 7,300 Total Current Assets, December 31,2012 \ 18,700 Total Current Liabilities, December 31,2012 \ 7,600 Total Assets, December 31,2012 \ 48,400 Total Liabilities, December 31,2012 \ 20,850 Total common shares outstanding, December 31,2012 1,000 Market price per share, December 31,2012 \ 75,00 Dividends per share, for the year ended December 31,2012 \ 5.00 What is the gross profit percentage for the year ended December 31,2012?

(Multiple Choice)

4.7/5

(32)

Question 15

The Collander Company reports the following information: Sales for the year ended December 31,2012 \1 06,950 Gross profit for the year ended December 31, 2012 \4 5,150 Net income for the year ended December 31,2012 \7 ,300 Total Current Assets, December 31, 2012 \1 8,700 Total Current Liabilities, December 31, 2012 \5 ,600 Total Assets, December 31, 2012 \4 8,400 Total Liabilities, December 31,2012 \2 0,850 Total common shares outstanding, December 31, 2012 \1 ,000 Market price per share, December 31, 2012 \7 5.00 Dividends per share, for the year ended December 31,2012 \5 .00 What is the current ratio at December 31,2012?

(Multiple Choice)

4.8/5

(41)

Question 16

California Company has 40,000 shares of its common stock outstanding.Utah Company owns 15,000 shares of California Company's stock.Which of the following methods should Utah Company use to account for its investment in California Company?

(Multiple Choice)

5.0/5

(43)

Question 17

In an efficient capital market,the market prices of securities ________.

(Multiple Choice)

4.7/5

(37)

Question 18

For trading securities,changes in the market value of the securities are included in .For available-for-sale securities,changes in the market value of the securities are included in .

(Multiple Choice)

5.0/5

(41)

Question 19

Randall Company acquired 40% of the voting stock of Boulder Company for $40 million.At the end of Year 1,Boulder Company reports net income of $15 million and pays cash dividends of $5 million.At the end of Year 1,the market value of Randall Company's investment in Boulder Company is $44 million.What accounts on Randall Company's books would be affected by the dividends of Boulder Company?

(Multiple Choice)

4.9/5

(42)

Question 20

In an efficient capital market,searching for ________.

In accordance with Generally Accepted Accounting Principles in the United States,the ________ must be reported on the financial statements.

Accountants require investors with significant influence,but not control,over the decisions of an investee firm to use the ________ method.

Under the equity method of accounting for investments,the investor recognizes income for ________.

In an efficient capital market,the appropriate investment strategy for most investors is the ________.

California Company has 40,000 shares of its common stock outstanding.Utah Company owns 15,000 shares of California Company's stock.Which of the following methods should Utah Company use to account for its investment in California Company?

In an efficient capital market,the market prices of securities ________.

For trading securities,changes in the market value of the securities are included in .For available-for-sale securities,changes in the market value of the securities are included in .

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Exam 17: Understanding and Analyzing Consolidated Financial Statements

In an efficient capital market,searching for ________.

In accordance with Generally Accepted Accounting Principles in the United States,the ________ must be reported on the financial statements.

Accountants require investors with significant influence,but not control,over the decisions of an investee firm to use the ________ method.

Under the equity method of accounting for investments,the investor recognizes income for ________.

In an efficient capital market,the appropriate investment strategy for most investors is the ________.

California Company has 40,000 shares of its common stock outstanding.Utah Company owns 15,000 shares of California Company's stock.Which of the following methods should Utah Company use to account for its investment in California Company?

In an efficient capital market,the market prices of securities ________.

For trading securities,changes in the market value of the securities are included in ________.For available-for-sale securities,changes in the market value of the securities are included in ________.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

For trading securities,changes in the market value of the securities are included in .For available-for-sale securities,changes in the market value of the securities are included in .