Miley Company has the following data available: $\begin{array}{ll} \text { Sales for the year ended December 31, } 2012&\$106,950\\ \text {Gross profit for the year ended December 31, 2012 }&\$45,150\\ \text {Net income for the year ended December 31, 2012 }&\$7,300\\ \text {Total Current Assets, December 31, 2012 }&\$18,700\\ \text { Total Current Liabilities, December 31, 2012 } & \$ 7,600 \\ \text { Total Assets, December 31, 2012 } & \$ 48,400 \\ \text { Total Liabilities, December 31, 2012 } & \$ 20,850 \\ \text { Average total common shares outstanding in 2012 } & 1,000 \\ \text { Market price per share, December 31, 2012 } & \$ 75,00 \\ \text { Preferred dividends declared during 2012 } & \$ 4,000 \end{array}$ What are the earnings per share for the year ended December 31,2012?

A) $3.30 B) $4.30 C) $7.30 D) none of the above A) $3.30 B) $4.30 C) $7.30 D) none of the above

The following information is available for the Christian Company: $\begin{array} { l } \text {Net income for the year ended December 31, 2014 }&\$127.4\\ \text {Retained earnings, December 31, 2014 }&150.0\\ \text {Retained earnings, December 31, 2013 }&180.0\\ \text { \( \$ 5 $ par Common stock, December 31, 2014}&80.0\\ \text {$ \$ 5 $ par Commonstock, December 31, 2013 }&80.0\\ \text {Total liabilities, December 31, 2014 }&240.0\\ \text {Total liabilities December 31,2013 }&182.0\\ \end{array}\) What is the earnings per share for the year ended December 31,2014?

A) $1.04 B) $1.56 C) $7.50 D) $7.96 A) $1.04 B) $1.56 C) $7.50 D) $7.96

The balance sheet for Ramon Company is given below: $\begin{array}{ll} \text { Cash } & \$ 242 \\ \text { Accounts Receivable } & 194 \\ \text { Inventory } & 450 \\ \text { Prepaid Insurance } & 76 \\ \text { Fixed Assets } & 390 \\ \text { Accumulated Depreciation } & (228) \\ \text { Total Assets } & \$ 1,124 \end{array}$ \[\begin{array} { l l } \text { Accounts payable } & \$ 152 \\ \text { Wages payable } & 32 \\ \text { Notes payable } & 420 \\ \text { Paid-in capital } & 160 \\ \text { Retained earnings } & \underline { 360 } \\ \text { Total liabilities and stockholders' equity } & \$ 1,124 \end{array}\] If a common-size balance sheet was prepared,what would Ramon Company report for inventory?

A) 13.5% B) 25.2% C) 34.5% D) 40.0% A) 13.5% B) 25.2% C) 34.5% D) 40.0%

The Bombard Company reports the following information: $\begin{array} { l } \text {Sales for the year ended December 31,2012 }&\$106,950\\ \text {Gross profit for the year ended December 31, 2012 }&\$45,150\\ \text { Net income for the year ended December 31,2012}&\$10,300\\ \text {Total Current Assets, December 31, 2012 }&\$18,700\\ \text {Total Current Liabilities, December 31, 2012 }&\$7,600\\ \text {Total Assets, December 31, 2012 }&\$48,400\\ \text {Total Liabilities, December 31,2012 }&\$20,850\\ \text { Total common shares outstanding, December 31, 2012}&\$1,000\\ \text {Market price per share, December 31, 2012 }&\$75.00\\ \text {Dividends per share, for the year ended December 31,2012 }&\$5.00\\ \end{array}$ What is the return on sales for the year ended December 31,2012?

A) 6.8% B) 9.6% C) 25.8% D) 42.2% A) 6.8% B) 9.6% C) 25.8% D) 42.2%

Presented below is the balance sheet of Holmes Company at January 1,2015: $\begin{array}{ll} \text { Cash } & \$ 100 \\ \text { Net Fixed Assets } & 400 \\ \text { Total Assets } & \$ 500 \end{array}$ Accounts Payable $\quad \$20$ Long-term Bonds Payable $\quad220$ Stockholders' Equity $\quad260$ Total Liabilities and Stockholders' Equity $\quad\$500$ The balance sheet of Montvale Company at January 1,2015 is below: cash $\quad\$400$ Net Fixed Assets $\quad380$ Total Assets $\quad\$780$ $\begin{array}{ll} \text { Accounts Payable } & \$ 120 \\ \text { Long-term Bonds Payable } & 280 \\ \text { Stockholders' Equity } & \underline{380} \\ \text { Total Liabilities and Stockholders' Equity } & \$ 780 \end{array}$ On January 1,2015,Montvale Company acquired 100 percent of the outstanding common stock of Holmes Company for $260 cash.The book value and fair value of Holmes' assets and liabilities were equal.What is the balance in the Investment in Holmes Company account on the consolidated balance sheet immediately after the acquisition of Holmes Company's stock? (Assume elimination entries are completed.)

A) $0 B) $260 C) $380 D) $500 A) $0 B) $260 C) $380 D) $500

The following information is available for the Larry Company: $\begin{array} { l } \text { Net income for the year ended December 31,2014}&\$127.4\\ \text { Total stockholders' equity, December 31, 2014 }&500.0\\ \text { Total stockholders' equity, December 31, 2013 }&400.0\\ \text { Total liabilities, December 31, 2014}&240.0\\ \text { Total liabilities, December 31,2013}&182.0\\ \end{array}$ What is the debt-to-equity ratio at December 31,2014?

A) 27% B) 41% C) 48% D) 51% A) 27% B) 41% C) 48% D) 51%

Goller 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: $\begin{array}{ll} \text { Wage expense } & 160 \\ \text { Depreciation expense } & 26 \\ \text { Rent expense } & 36 \\ \text { Miscellaneous expense } & \underline{70} \\ \text { Total operating expenses } & \underline{292} \\ \text { Operating income } & 464 \\ \text { Income tax expense } & \underline{100} \\ \text { Net income } & \$ 364 \end{array}$ If Goller Company prepares a common size income statement,what will they report for Income tax expense?

A) 6.4% B) 11.0% C) 12.4% D) 39.9% A) 6.4% B) 11.0% C) 12.4% D) 39.9%

The Kaprelian 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 yield at December 31,2012?

A) 6.7% B) 9.7% C) 25.8% D) 68.2% A) 6.7% B) 9.7% C) 25.8% D) 68.2%

Exam 17: Understanding and Analyzing Consolidated Financial Statements

Randy Company acquired 40% of the voting stock of Biel Company for $40 million.At the end of Year 1,Biel Company reports net income of $15 million and pays cash dividends of $5 million.At the end of Year 1,the market value of Randy Company's investment in Biel Company is $44 million.The ________ method should be used by Randy Company to account for the investment.

(Multiple Choice)

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Question 61

To compare companies that differ in size,analysts use ________.

(Multiple Choice)

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Question 62

A factor that contributes to recording goodwill when acquiring control of another company is ________.

(Multiple Choice)

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Question 63

Miley Company has the following data available: 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 \ 7,600 Total Assets, December 31, 2012 \ 48,400 Total Liabilities, December 31, 2012 \ 20,850 Average total common shares outstanding in 2012 1,000 Market price per share, December 31, 2012 \ 75,00 Preferred dividends declared during 2012 \ 4,000 What are the earnings per share for the year ended December 31,2012?

(Multiple Choice)

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Question 64

The following information is available for the Christian Company: Net income for the year ended December 31, 2014 \1 27.4 Retained earnings, December 31, 2014 150.0 Retained earnings, December 31, 2013 180.0 \ 5 par Common stock, December 31, 2014 80.0 \ 5 par Commonstock, December 31, 2013 80.0 Total liabilities, December 31, 2014 240.0 Total liabilities December 31,2013 182.0 What is the earnings per share for the year ended December 31,2014?

(Multiple Choice)

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Question 65

At the date of acquisition by a parent company,the fair value of a subsidiary's fixed assets was larger than their book value.When preparing consolidated financial statements,the fixed assets of the subsidiary are and depreciation expense is .

(Multiple Choice)

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Question 66

The balance sheet for Ramon Company is given below: Cash \ 242 Accounts Receivable 194 Inventory 450 Prepaid Insurance 76 Fixed Assets 390 Accumulated Depreciation (228) Total Assets \ 1,124 Accounts payable \ 152 Wages payable 32 Notes payable 420 Paid-in capital 160 Retained earnings Total liabilities and stockholders' equity \ 1,124 If a common-size balance sheet was prepared,what would Ramon Company report for inventory?

(Multiple Choice)

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Question 67

French Company acquired 80 percent of the outstanding shares of Godiva Company for $152 in cash.(No goodwill was present at the time of acquisition.)The net income for the current year for French Company is $100.The net income for the current year for Godiva Company is $20.There were no intercompany sales.The book value and fair value of Godiva's assets and liabilities were equal at the acquisition date.What is the net income on the consolidated income statement for the current year?

(Multiple Choice)

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Question 68

The Bombard 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 \1 0,300 Total Current Assets, December 31, 2012 \1 8,700 Total Current Liabilities, December 31, 2012 \7 ,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 return on sales for the year ended December 31,2012?

(Multiple Choice)

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Question 69

Branson Company purchased 40% of the outstanding shares of Missouri Company as a long-term investment.At the end of the year,the market value of the shares increased.The increase in market value of Missouri Company's shares will affect Branson Company in which of the following ways?

(Multiple Choice)

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Question 70

The Investment in Subsidiary account appears on a consolidated balance sheet.

(True/False)

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Question 71

The following data is available for Everest Company: Credit Sales \ 1,702 Net Income \ 112 Total Current Assets \ 366 Total Current Liabilities \ 226 Accounts Receivable, current year \ 160 Accounts Receivable, prior year \ 156 Total Stockholders' Equity, current year \ 550 Total Stockholders' Equity, prior year \ 500 Retained Eamings, current year \ 366 Retained Eamings, prior year \ 346 Market price per share \ 50 Average Number of Common Shares Outstanding during year 46 Required: Compute the following ratios: A) current ratio B) average collection period in days C) return on stockholders' equity D) price-earnings ratio E) dividend yield

(Essay)

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Question 72

An investor holds 1% of the outstanding stock of an investee.The investor plans to hold the stock for a long time.The investor reports the dividends received from the stock as ________.

(Multiple Choice)

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Question 73

Presented below is the balance sheet of Holmes Company at January 1,2015: Cash \ 100 Net Fixed Assets 400 Total Assets \ 500 Accounts Payable $\quad \$20$ Long-term Bonds Payable $\quad220$ Stockholders' Equity $\quad260$ Total Liabilities and Stockholders' Equity $\quad\$500$ The balance sheet of Montvale Company at January 1,2015 is below: cash $\quad\$400$ Net Fixed Assets $\quad380$ Total Assets $\quad\$780$ Accounts Payable \ 120 Long-term Bonds Payable 280 Stockholders' Equity Total Liabilities and Stockholders' Equity \ 780 On January 1,2015,Montvale Company acquired 100 percent of the outstanding common stock of Holmes Company for $260 cash.The book value and fair value of Holmes' assets and liabilities were equal.What is the balance in the Investment in Holmes Company account on the consolidated balance sheet immediately after the acquisition of Holmes Company's stock? (Assume elimination entries are completed.)

(Multiple Choice)

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Question 74

Line items on common-size financial statements are expressed in percentages of some base such as total assets.

(True/False)

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Question 75

The following information is available for the Larry Company: Net income for the year ended December 31,2014 \1 27.4 Total stockholders' equity, December 31, 2014 500.0 Total stockholders' equity, December 31, 2013 400.0 Total liabilities, December 31, 2014 240.0 Total liabilities, December 31,2013 182.0 What is the debt-to-equity ratio at December 31,2014?

(Multiple Choice)

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Question 76

The balance sheet for Orlando Company at December 31,2009 is given below: Current Assets: Cash \7 8 Accounts Receivable 76 Inventory 54 Total Current Assets \2 08 Long-term Assets: Fixed Assets \3 22 Less: Accumulated Depreciation (136) Net Fixed Assets \1 86 Total Assets \3 94 Current Liabilities: Accounts Payable \4 4 Taxes Payable 14 Total Current Liabilities \5 8 Long-term Bonds Payable 60 Total Liabilities \1 18 Stockholders' Equity: Paid-in Capital \1 00 Retained Earnings 176 Total Stockholders' Equity \2 76 Total Liabilities and Stockholders' Eguity \3 94 Required: Prepare a common-size balance sheet.

(Essay)

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Question 77

Goller 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 26 Rent expense 36 Miscellaneous expense Total operating expenses Operating income 464 Income tax expense Net income \ 364 If Goller Company prepares a common size income statement,what will they report for Income tax expense?

(Multiple Choice)

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Question 78

The Kaprelian 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 yield at December 31,2012?

(Multiple Choice)

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Question 79

A subsidiary is a company that owns more than 50 percent of another company's outstanding common stock.

(True/False)

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Question 80

To compare companies that differ in size,analysts use ________.

A factor that contributes to recording goodwill when acquiring control of another company is ________.

At the date of acquisition by a parent company,the fair value of a subsidiary's fixed assets was larger than their book value.When preparing consolidated financial statements,the fixed assets of the subsidiary are and depreciation expense is .

Branson Company purchased 40% of the outstanding shares of Missouri Company as a long-term investment.At the end of the year,the market value of the shares increased.The increase in market value of Missouri Company's shares will affect Branson Company in which of the following ways?

The Investment in Subsidiary account appears on a consolidated balance sheet.

An investor holds 1% of the outstanding stock of an investee.The investor plans to hold the stock for a long time.The investor reports the dividends received from the stock as ________.

Line items on common-size financial statements are expressed in percentages of some base such as total assets.

A subsidiary is a company that owns more than 50 percent of another company's outstanding common stock.

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

To compare companies that differ in size,analysts use ________.

A factor that contributes to recording goodwill when acquiring control of another company is ________.

At the date of acquisition by a parent company,the fair value of a subsidiary's fixed assets was larger than their book value.When preparing consolidated financial statements,the fixed assets of the subsidiary are ________ and depreciation expense is ________.

Branson Company purchased 40% of the outstanding shares of Missouri Company as a long-term investment.At the end of the year,the market value of the shares increased.The increase in market value of Missouri Company's shares will affect Branson Company in which of the following ways?

The Investment in Subsidiary account appears on a consolidated balance sheet.

An investor holds 1% of the outstanding stock of an investee.The investor plans to hold the stock for a long time.The investor reports the dividends received from the stock as ________.

Line items on common-size financial statements are expressed in percentages of some base such as total assets.

A subsidiary is a company that owns more than 50 percent of another company's outstanding common stock.

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

At the date of acquisition by a parent company,the fair value of a subsidiary's fixed assets was larger than their book value.When preparing consolidated financial statements,the fixed assets of the subsidiary are and depreciation expense is .