The income statement for Rozman Company for the year ended December 31,2013 is given below: $\begin{array}{ll} \text { Sales }&\$1,600\\ \text { Cost of goods sold }&872\\ \text { Gross profit } & 728 \\ \text { Operating expenses } & 436\\ \text { Operating income }&292\\ \text { Income taxexpense }&66\\ \text { Net income }&\$226 \end{array}$ Required: Prepare a common-size income statement.

The answer of The income statement for Rozman Company for...

The following information is available for the Platinum Company: $\begin{array} { l } \text { Net income for the year ended December 31, } 2014&\$127.4\\ \text {Retained earnings, December 31, 2014 }&150.0\\ \text {Retained earnings, December 31, 2013 }&180.0\\ \text {Total assets, December 31, 2014 }&470.0\\ \text {Total assets, December 31, 2013 }&442.0\\ \text {Total liabilities, December 31, 2014 }&280.0\\ \text { Total liabilities, December 31, 2013}&182.0\\ \end{array}$ What is the debt-to-equity ratio at December 31,2014?

A) 0.29 B) 1.47 C) 1.90 D) 2.00 A) 0.29 B) 1.47 C) 1.90 D) 2.00

Presented below is the balance sheet of Hellman Company at January 1,2015: $\begin{array}{ll} \text { Cash } & \$ 100 \\ \text { Net Fixed Assets } & {400} \\ \text { Total Assets } &{\$ 500} \end{array}$ $\begin{array}{ll} \text { Accounts Payable } & \$ 20 \\ \text { Long-term Bonds Payable } & 220 \\ \text { Stockholders' Equity } & \underline{260} \\ \text { Total Liabilities and Stockholders' Equity } & \$ 500 \end{array}$ The balance sheet of Swenson Company at January 1,2015 is below: $\begin{array}{ll} \text { Cash } & \$ 400 \\ \text { Net Fixed Assets } & {380} \\ \text { Total Assets } & {\$ 780} \end{array}$ $\begin{array}{ll} \text { Accounts Payable } & \$ 120 \\ \text { Long-term Bonds Payable } & 280 \\ \text { Stockholders' Equity } & 380 \\ \text { Total Liabilities and Stockholders' Equity } & \$ 780 \end{array}$ On January 1,2015,Swenson Company acquired 100 percent of the outstanding common stock of Hellman Company for $260 cash.The book value and fair value of Hellman's assets and liabilities were equal.The net income for the year ending December 31,2015 was $30 for Hellman Company.The net income for the year ending December 31,2015 was $40 for Swenson Company.There were no intercompany sales.What is the net income on the consolidated income statement for the year ended December 31,2015?

A) $0 B) $30 C) $40 D) $70 A) $0 B) $30 C) $40 D) $70

The Vaclav Company reports the following information: \[\begin{array} { l l } \text { Sales for the year ended December 31, 2012 } & \$ 106,950 \\ \text { Grom profit for the year ended December } 31,2012 & \$ 45,150 \\ \text { Net income for the year ended December } 31,2012 & \$ 7,300 \\ \text { Total Current Assets, December } 31,2012 & \$ 18,700 \\ \text { Total Current Liabilities, December } 31,2012 & \$ 7,600 \\ \text { Total Assets, December } 31,2012 & \$ 48,400 \\ \text { Total Liabilities, December } 31,2012 & \$ 20,850 \\ \text { Average common shares outstandingin } 2012 & 1,000 \\ \text { Market price per share, December } 31,2012 & \$ 75.00 \\ \text { Dividends per share, for the year ended December } 3 1 , 2 0 1 2 & \$ 5.00 \end{array}\] What is the price-earnings ratio at December 31,2012?

A) 0.7 B) 10.3 C) 19.3 D) 75.0 A) 0.7 B) 10.3 C) 19.3 D) 75.0

Exam 17: Understanding and Analyzing Consolidated Financial Statements

If the fair value of a subsidiary's assets exceeds their book value when the subsidiary is acquired,the assets of the subsidiary are written up at the time consolidated financial statements are prepared.

(True/False)

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Question 81

The income statement for Rozman Company for the year ended December 31,2013 is given below: Sales \1 ,600 Cost of goods sold 872 Gross profit 728 Operating expenses 436 Operating income 292 Income taxexpense 66 Net income \2 26 Required: Prepare a common-size income statement.

(Essay)

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Question 82

Comparing a company's current ratio today with the same company's current ratio for the past ten years is called a(n)________.

(Multiple Choice)

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Question 83

Elimination entries avoid double-counting assets,liabilities and stockholders' equity on the consolidated financial statements.

(True/False)

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Question 84

In an efficient capital market,the role of accounting information is to ________.

(Multiple Choice)

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Question 85

An investor in trading securities has the following information available at December 31,2012: Market value of trading securities $\quad \$8,000$ Acquisition cost of trading securities $\quad \$9,000$ How does the investor report the change in market value on the trading securities at December 31,2012?

(Multiple Choice)

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Question 86

The following information is available for the Platinum 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 Total assets, December 31, 2014 470.0 Total assets, December 31, 2013 442.0 Total liabilities, December 31, 2014 280.0 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 87

Under the equity method of accounting for investments,the acquisition cost of an investment is adjusted for ________.

(Multiple Choice)

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Question 88

An investor holds 5% of the outstanding stock of an investee.The investor plans to sell the stock in two months.The investor reports the dividends received from the stock as ________.

(Multiple Choice)

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Question 89

When a company acquires all of the common stock of a subsidiary,the books of the subsidiary are no longer used.

(True/False)

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Question 90

Barnard Company owns a 60 percent interest in Simon Company.For the year ended December 31,2016,the net income of Barnard Company was $80 and the net income of Simon Company was $10.What is the balance in the Noncontrolling Interests account on the consolidated income statement for the year ending December 31,2016?

(Multiple Choice)

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Question 91

In an efficient capital market,the appropriate investment strategy is risk control, and .

(Multiple Choice)

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Question 92

Goodwill is amortized on the consolidated financial statements.

(True/False)

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Question 93

Naples Company acquired all of the shares of Tampa Company for $80 cash.At the time of the acquisition,the fair values of Tampa Company's assets were $200.At the time of acquisition,the fair values of Tampa Company's liabilities were $120.On the date of acquisition,what is the amount of goodwill on the consolidated balance sheet?

(Multiple Choice)

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Question 94

An investor that has effective control over an investee usually owns ________ of the investee's stock.

(Multiple Choice)

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Question 95

The existence of a parent company and a subsidiary requires special accounting procedures.

(True/False)

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Question 96

Presented below is the balance sheet of Hellman Company at January 1,2015: Cash \ 100 Net Fixed Assets 400 Total Assets \ 500 Accounts Payable \ 20 Long-term Bonds Payable 220 Stockholders' Equity Total Liabilities and Stockholders' Equity \ 500 The balance sheet of Swenson 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 380 Total Liabilities and Stockholders' Equity \ 780 On January 1,2015,Swenson Company acquired 100 percent of the outstanding common stock of Hellman Company for $260 cash.The book value and fair value of Hellman's assets and liabilities were equal.The net income for the year ending December 31,2015 was $30 for Hellman Company.The net income for the year ending December 31,2015 was $40 for Swenson Company.There were no intercompany sales.What is the net income on the consolidated income statement for the year ended December 31,2015?

(Multiple Choice)

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Question 97

The current ratio equals current assets divided by current liabilities.

(True/False)

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Question 98

An investor in available-for-sale securities has the following information available at December 31,2012: Market value of trading securities $\quad \$8,000$ Acquisition cost of trading securities $\quad \$9,000$ How does the investor report the change in market value on the available-for-sale securities at December 31,2012?

(Multiple Choice)

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Question 99

The Vaclav 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 common shares outstandingin 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 price-earnings ratio at December 31,2012?

(Multiple Choice)

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Question 100

If the fair value of a subsidiary's assets exceeds their book value when the subsidiary is acquired,the assets of the subsidiary are written up at the time consolidated financial statements are prepared.

The income statement for Rozman Company for the year ended December 31,2013 is given below: Sales \1 ,600 Cost of goods sold 872 Gross profit 728 Operating expenses 436 Operating income 292 Income taxexpense 66 Net income \2 26 Required: Prepare a common-size income statement.

Comparing a company's current ratio today with the same company's current ratio for the past ten years is called a(n)________.

Elimination entries avoid double-counting assets,liabilities and stockholders' equity on the consolidated financial statements.

In an efficient capital market,the role of accounting information is to ________.

Under the equity method of accounting for investments,the acquisition cost of an investment is adjusted for ________.

An investor holds 5% of the outstanding stock of an investee.The investor plans to sell the stock in two months.The investor reports the dividends received from the stock as ________.

When a company acquires all of the common stock of a subsidiary,the books of the subsidiary are no longer used.

In an efficient capital market,the appropriate investment strategy is risk control, and .

Goodwill is amortized on the consolidated financial statements.

An investor that has effective control over an investee usually owns ________ of the investee's stock.

The existence of a parent company and a subsidiary requires special accounting procedures.

The current ratio equals current assets divided by current liabilities.

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

If the fair value of a subsidiary's assets exceeds their book value when the subsidiary is acquired,the assets of the subsidiary are written up at the time consolidated financial statements are prepared.

The income statement for Rozman Company for the year ended December 31,2013 is given below: Sales \1 ,600 Cost of goods sold 872 Gross profit 728 Operating expenses 436 Operating income 292 Income taxexpense 66 Net income \2 26 Required: Prepare a common-size income statement.

Comparing a company's current ratio today with the same company's current ratio for the past ten years is called a(n)________.

Elimination entries avoid double-counting assets,liabilities and stockholders' equity on the consolidated financial statements.

In an efficient capital market,the role of accounting information is to ________.

Under the equity method of accounting for investments,the acquisition cost of an investment is adjusted for ________.

An investor holds 5% of the outstanding stock of an investee.The investor plans to sell the stock in two months.The investor reports the dividends received from the stock as ________.

When a company acquires all of the common stock of a subsidiary,the books of the subsidiary are no longer used.

In an efficient capital market,the appropriate investment strategy is risk control,________ and ________.

Goodwill is amortized on the consolidated financial statements.

An investor that has effective control over an investee usually owns ________ of the investee's stock.

The existence of a parent company and a subsidiary requires special accounting procedures.

The current ratio equals current assets divided by current liabilities.

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

In an efficient capital market,the appropriate investment strategy is risk control, and .