Zemrowski Company has the following data available: $\begin{array} { l } \text {Credit Sales for the year ended December 31,2015 }&\$500 \\ \text { Cash Sales for the year ended December 31,2015 }&\$ 400\\ \text {Cost of Goods Sold for the year ended December 31,2015 }&\$290 \\ \text { Total Accounts Receivable, December 31, 2015}&\$200 \\ \text {Total Accounts Receivable, December 31, 2014 }&\$100 \\ \text { Total Inventory, December 31, 2015}&\$200 \\ \text {Total Inventory, December 31, 2014 }&\$250 \\ \end{array}$ What is the average collection period for the fiscal year ending December 31,2015?

A) 110 days B) 150 days C) 220 days D) 283 days A) 110 days B) 150 days C) 220 days D) 283 days

Maureen 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: $\begin{array}{ll} \text { Wage expense } & 110 \\ \text { Depreciation expense } & 76 \\ \text { Rent expense } & 36 \\ \text { Miscellaneous expense } & \underline{70} \\ \text { Total operating expenses } & \underline{292} \\ \text { Operating income } & 464 \\ \text { Income tax expense } & \underline{162} \\ \text { Net income } & \$ 302 \end{array}$ If Maureen Company prepares a common size income statement,what will they report for Wage expense?

A) 7.0% B) 10.2% C) 34.4% D) 66.1% A) 7.0% B) 10.2% C) 34.4% D) 66.1%

The following information is available for the Novin Company: $\begin{array} { l } \text { Net income for the year ended December } 31,2014&\$177.4\\ \text { Sales for the year ended December 31,2014}&1,606.0\\ \text { Retained earnings, December 31, 2014 }&150.0\\ \text {Retained earnings, December 31, 2013 }&180.0\\ \text {Total assets, December 31, 2014 }&470.0\\ \text { Total assets, December 31, 2013}&442.0\\ \text {Total liabilities, December 31, 2014 }&240.0\\ \text {Total liabilities, December 31,2013 }&182.0\\ \end{array}$ What is the return on sales for the year ended December 31,2014?

A) 2.9% B) 7.9% C) 11.0% D) 33.9% A) 2.9% B) 7.9% C) 11.0% D) 33.9%

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

A) $0.26 B) $3.88 C) $7.30 D) $106.95 A) $0.26 B) $3.88 C) $7.30 D) $106.95

The following information is available for Potter Company: $\begin{array}{ll} \text { Total Current Assets } & \$ 356,000 \\ \text { Total Current Liabilities } & \$ 203,000\\ \text { Total Assets }&\$1,000,000\\ \text { Total Liabilities } & \$ 500,000 \\ \text { Cash } & \$ 100,000 \end{array}$ What is the current ratio?

A) 0.76 B) 1.75 C) 2.05 D) 2.51 A) 0.76 B) 1.75 C) 2.05 D) 2.51

Presented below is the balance sheet of Holman 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 Beck 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,Beck Company acquired 100 percent of the outstanding common stock of Holman Company for $260 cash.The book value and fair value of Holman's assets and liabilities were equal.Holman Company generated net income of $30 during the year ended December 31,2015.There were no intercompany sales.What is the balance in the Investment in Holman Company account on December 31,2015 before elimination entries are prepared?

A) $0 B) $30 C) $230 D) $290 A) $0 B) $30 C) $230 D) $290

The balance sheet for Jennifer Company is given below: $\begin{array}{ll} \text { Cash } & \$ 200 \\ \text { Accounts Receivable } & 236 \\ \text { Inventory } & 388 \\ \text { Prepaid Insurance } & 76 \\ \text { Fixed Assets } & 452 \\ \text { Accumulated Depreciation } & (228)\\ \text { Total Assets }&\$1,124 \end{array}$ \[\begin{array} { l l } \text { Accounts payable } & \$ 152 \\ \text { Wages payable } & 32 \\ \text { Notes payable } & 420 \\ \text { Paid-in capital } & 160 \\ \text { Retained earnings } & \underline { 360 } \\ \text { Total liabilities and stockholders' equity } & \$ 1,124 \end{array}\] If a common-size balance sheet was prepared,what would Jennifer Company report for Cash?

A) 17.8% B) 21.5% C) 25.2% D) 62.3% A) 17.8% B) 21.5% C) 25.2% D) 62.3%

Exam 17: Understanding and Analyzing Consolidated Financial Statements

Zemrowski Company has the following data available: Credit Sales for the year ended December 31,2015 \5 00 Cash Sales for the year ended December 31,2015 \ 400 Cost of Goods Sold for the year ended December 31,2015 \2 90 Total Accounts Receivable, December 31, 2015 \2 00 Total Accounts Receivable, December 31, 2014 \1 00 Total Inventory, December 31, 2015 \2 00 Total Inventory, December 31, 2014 \2 50 What is the average collection period for the fiscal year ending December 31,2015?

(Multiple Choice)

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Question 101

The company that owns 100 percent of another company's stock is called the .The company that is controlled by another company is called the .

(Multiple Choice)

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Question 102

Fast growing companies tend to have ________ price-earnings ratios.

(Multiple Choice)

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Question 103

Maureen 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 110 Depreciation expense 76 Rent expense 36 Miscellaneous expense Total operating expenses Operating income 464 Income tax expense Net income \ 302 If Maureen Company prepares a common size income statement,what will they report for Wage expense?

(Multiple Choice)

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Question 104

Besides financial statements,alternative sources of financial information about a company is(are)________.

(Multiple Choice)

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Question 105

The following information is available for the Novin Company: Net income for the year ended December 31,2014 \1 77.4 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 What is the return on sales for the year ended December 31,2014?

(Multiple Choice)

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Question 106

________ are profitability ratios.

(Multiple Choice)

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Question 107

Return on sales equals gross profit divided by sales.

(True/False)

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Question 108

Wyoming Company has 40,000 shares of its common stock outstanding.Dakota Company owns 35,000 shares of Wyoming Company's stock.Which of the following methods should Dakota Company use to account for its investment in Wyoming Company?

(Multiple Choice)

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Question 109

The debt-to-equity ratio is used to judge a company's ________.

(Multiple Choice)

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Question 110

The Middleton 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 outstanding 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 earnings per share for the year ended December 31,2012?

(Multiple Choice)

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Question 111

When an investing company owns less than 50 percent of another company,the companies must prepare consolidated financial statements.

(True/False)

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Question 112

The following information is available for Potter Company: Total Current Assets \ 356,000 Total Current Liabilities \ 203,000 Total Assets \1 ,000,000 Total Liabilities \ 500,000 Cash \ 100,000 What is the current ratio?

(Multiple Choice)

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Question 113

Presented below is the balance sheet of Holman 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 Beck 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,Beck Company acquired 100 percent of the outstanding common stock of Holman Company for $260 cash.The book value and fair value of Holman's assets and liabilities were equal.Holman Company generated net income of $30 during the year ended December 31,2015.There were no intercompany sales.What is the balance in the Investment in Holman Company account on December 31,2015 before elimination entries are prepared?

(Multiple Choice)

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Question 114

The balance sheet for Jennifer Company is given below: Cash \ 200 Accounts Receivable 236 Inventory 388 Prepaid Insurance 76 Fixed Assets 452 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 Jennifer Company report for Cash?

(Multiple Choice)

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Question 115

Accountants require investors that have control over the decisions of an investee firm to use the ________ method.

(Multiple Choice)

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Question 116

On January 1,2014,Liberty Company purchased common stock in Garcia Company for $1,000,000.During 2014,Garcia Company earned $4,000,000 and paid dividends of $1,000,000.Assume that Liberty Company owns 30% of the outstanding shares of Garcia Company.The market value of the investment at December 31,2014 is $1,100,000.What is the balance in the Investment account at December 31,2014?

(Multiple Choice)

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Question 117

When preparing consolidated financial statements,eliminating entries are made to avoid double-counting ________.

(Multiple Choice)

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Question 118

Rainbow Company acquired 100 percent of the outstanding common stock of Ribbon Company.At the date of acquisition,no goodwill was involved and the book value of the assets and liabilities of Ribbon Company equal their fair values.Immediately after the acquisition,an elimination entry is prepared in order to prepare consolidated financial statements.Which of the following accounts are affected by the elimination entry?

(Multiple Choice)

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Question 119

On January 1,2014,Jonathon Company purchased common stock in Garcia Company for $1,000,000.Jonathon Company treats the investment as trading securities.During 2014,Garcia Company earned $4,000,000 and paid dividends of $1,000,000.Assume that Jonathon Company owns 10% of the outstanding shares of Garcia Company.The market value of the investment at December 31,2014 is $1,100,000.What is the balance in the Investment account at December 31,2014?

(Multiple Choice)

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Question 120

The company that owns 100 percent of another company's stock is called the .The company that is controlled by another company is called the .

Fast growing companies tend to have ________ price-earnings ratios.

Besides financial statements,alternative sources of financial information about a company is(are)________.

________ are profitability ratios.

Return on sales equals gross profit divided by sales.

Wyoming Company has 40,000 shares of its common stock outstanding.Dakota Company owns 35,000 shares of Wyoming Company's stock.Which of the following methods should Dakota Company use to account for its investment in Wyoming Company?

The debt-to-equity ratio is used to judge a company's ________.

When an investing company owns less than 50 percent of another company,the companies must prepare consolidated financial statements.

The following information is available for Potter Company: Total Current Assets \ 356,000 Total Current Liabilities \ 203,000 Total Assets \1 ,000,000 Total Liabilities \ 500,000 Cash \ 100,000 What is the current ratio?

Accountants require investors that have control over the decisions of an investee firm to use the ________ method.

When preparing consolidated financial statements,eliminating entries are made to avoid double-counting ________.

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

The company that owns 100 percent of another company's stock is called the ________.The company that is controlled by another company is called the ________.

Fast growing companies tend to have ________ price-earnings ratios.

Besides financial statements,alternative sources of financial information about a company is(are)________.

________ are profitability ratios.

Return on sales equals gross profit divided by sales.

Wyoming Company has 40,000 shares of its common stock outstanding.Dakota Company owns 35,000 shares of Wyoming Company's stock.Which of the following methods should Dakota Company use to account for its investment in Wyoming Company?

The debt-to-equity ratio is used to judge a company's ________.

When an investing company owns less than 50 percent of another company,the companies must prepare consolidated financial statements.

The following information is available for Potter Company: Total Current Assets \ 356,000 Total Current Liabilities \ 203,000 Total Assets \1 ,000,000 Total Liabilities \ 500,000 Cash \ 100,000 What is the current ratio?

Accountants require investors that have control over the decisions of an investee firm to use the ________ method.

When preparing consolidated financial statements,eliminating entries are made to avoid double-counting ________.

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

The company that owns 100 percent of another company's stock is called the .The company that is controlled by another company is called the .