Question 1

If a company converts a short-term note payable into a long-term note payable, this transaction would:

Accepted Answer

A)  decrease working capital and increase the current ratio. 
B)  decrease working capital and decrease the current ratio. 
C)  decrease the current ratio and decrease the acid-test ratio. 
D)  increase working capital and increase the current ratio. 
A)  decrease working capital and increase the current ratio. 
B)  decrease working capital and decrease the current ratio. 
C)  decrease the current ratio and decrease the acid-test ratio. 
D)  increase working capital and increase the current ratio. D

Question 2

Eradicate Company has $16,000 in cash, $8,000 in marketable securities, $29,000 in account receivable, $30,000 in inventories, and $34,000 in current liabilities. The company's current assets consist of cash, marketable securities, accounts receivable, and inventory. The company's acid-test ratio is closest to:

Accepted Answer

A)  0.85 
B)  2.44 
C)  1.56 
D)  1.32 
A)  0.85 
B)  2.44 
C)  1.56 
D)  1.32 C

Question 3

Excerpts from Shelton Corporation's most recent balance sheet appear below:   Sales on account in Year 2 amounted to $1,320 and the cost of goods sold was $890.
-The accounts receivable turnover for Year 2 is closest to:

Accepted Answer

A)  5.50 
B)  0.92 
C)  1.09 
D)  5.28 
A)  5.50 
B)  0.92 
C)  1.09 
D)  5.28 A

Question 4

Financial statements for Larkins Company appear below:

Dividends during Year 2 totaled $135 thousand, of which $12 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $150.

-Larkins Company's book value per share at the end of Year 2 was closest to:

Accepted Answer

A)  $10.00 
B)  $23.33 
C)  $70.00 
D)  $76.67 
A)  $10.00 
B)  $23.33 
C)  $70.00 
D)  $76.67

Question 5

Selected financial data (in thousands of dollars) for Barnstable Company appear below:  
-For Year 2, the net operating income as a percentage of sales was:

Accepted Answer

A)  70% 
B)  8% 
C)  10% 
D)  40% 
A)  70% 
B)  8% 
C)  10% 
D)  40%

Question 6

Selected data from Sheridan Corporation's year-end financial statements are presented below. The difference between average and ending inventory is immaterial.  
Sheridan's sales for the year were:

Accepted Answer

A)  $800,000 
B)  $480,000 
C)  $1,200,000 
D)  $240,000 
A)  $800,000 
B)  $480,000 
C)  $1,200,000 
D)  $240,000

Question 7

Desktop Co. presently has a current ratio of 1.2 and an acid-test ratio of 0.8. Prepaying next year's office rent of $50,000 will:

Accepted Answer

A)  have no effect on either the company's current ratio or its acid-test ratio. 
B)  have no effect on the company's current ratio but will decrease its acid-test ratio. 
C)  decrease the company's current ratio and decrease its acid-test ratio. 
D)  increase the company's current ratio and increase its acid-test ratio. 
A)  have no effect on either the company's current ratio or its acid-test ratio. 
B)  have no effect on the company's current ratio but will decrease its acid-test ratio. 
C)  decrease the company's current ratio and decrease its acid-test ratio. 
D)  increase the company's current ratio and increase its acid-test ratio.

Question 8

Leonhardt Corporation's net income last year was $3,800,000. The dividend on common stock was $2.00 per share and the dividend on preferred stock was $1.80 per share. The market price of common stock at the end of the year was $53.40 per share. Throughout the year, 500,000 shares of common stock and 100,000 shares of preferred stock were outstanding. The price-earnings ratio is closest to:

Accepted Answer

A)  9.54 
B)  7.03 
C)  7.38 
D)  10.19 
A)  9.54 
B)  7.03 
C)  7.38 
D)  10.19

Question 9

Walp Corporation's most recent balance sheet and income statement appear below:   
   
Dividends on common stock during Year 2 totaled $20 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $7.75 per share.
Required:
Compute the following for Year 2:
a. Gross margin percentage.
b. Earnings per share (of common stock).
c. Price-earnings ratio.
d. Dividend payout ratio.
e. Dividend yield ratio.
f. Return on total assets.
g. Return on common stockholders' equity.
h. Book value per share.

Accepted Answer

a. Gross margin percentage = Gross margi

Question 10

Excerpts from Stys Corporation's most recent balance sheet and income statement appear below:   Dividends on common stock during Year 2 totaled $50 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $8.20 per share.
-The dividend yield ratio for Year 2 is closest to:

Accepted Answer

A)  6.10% 
B)  83.33% 
C)  7.32% 
D)  1.22% 
A)  6.10% 
B)  83.33% 
C)  7.32% 
D)  1.22%

Question 11

Excerpts from Deandrade Corporation's most recent balance sheet appear below:   Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $830.
-The accounts receivable turnover for Year 2 is closest to:

Accepted Answer

A)  0.80 
B)  15.11 
C)  17.00 
D)  1.25 
A)  0.80 
B)  15.11 
C)  17.00 
D)  1.25

Question 12

Vasconcelos Corporation's most recent balance sheet and income statement appear below:   
   
Required:
Compute the following for Year 2:
a. Working capital.
b. Current ratio.
c. Acid-test ratio.
d. Accounts receivable turnover.
e. Average collection period.
f. Inventory turnover.
g. Average sale period.

Accepted Answer

a. Working capital = Current assets - Cu

Question 13

Dadisman Corporation's most recent balance sheet and income statement appear below:     Dividends on common stock during Year 2 totaled $30 thousand. Dividends on preferred stock totaled $20 thousand. The market price of common stock at the end of Year 2 was $6.75 per share.
-The return on common stockholders' equity for Year 2 is closest to:

Accepted Answer

A)  7.95% 
B)  4.63% 
C)  6.48% 
D)  5.68% 
A)  7.95% 
B)  4.63% 
C)  6.48% 
D)  5.68%

Question 14

Mccaughey Corporation's most recent balance sheet and income statement appear below:

-What is the company's acid-test ratio?

Accepted Answer

A)  0.68 
B)  1.68 
C)  2.14 
D)  2.31 
A)  0.68 
B)  1.68 
C)  2.14 
D)  2.31

Question 15

Leckbee Corporation's net income for the most recent year was $3,270,000. A total of 500,000 shares of common stock and 200,000 shares of preferred stock were outstanding throughout the year. Dividends on common stock were $2.70 per share and dividends on preferred stock were $1.10 per share.
Required:
Compute the earnings per share of common stock. Show your work!

Accepted Answer

Earnings per share = (Net Inco

Question 16

Excerpts from Stys Corporation's most recent balance sheet and income statement appear below:   Dividends on common stock during Year 2 totaled $50 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $8.20 per share.
-The dividend payout ratio for Year 2 is closest to:

Accepted Answer

A)  60.0% 
B)  1000.0% 
C)  45.5% 
D)  50.0% 
A)  60.0% 
B)  1000.0% 
C)  45.5% 
D)  50.0%

Question 17

Guynn Corporation's most recent balance sheet and income statement appear below:     Dividends on common stock during Year 2 totaled $10 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.05 per share.
-The return on common stockholders' equity for Year 2 is closest to:

Accepted Answer

A)  7.33% 
B)  6.67% 
C)  5.88% 
D)  6.47% 
A)  7.33% 
B)  6.67% 
C)  5.88% 
D)  6.47%

Question 18

Financial statements for Nardella Company appear below:    
-Nardella Company's debt-to-equity ratio at the end of Year 2 was closest to:

Accepted Answer

A)  0.31 
B)  0.23 
C)  0.70 
D)  0.54 
A)  0.31 
B)  0.23 
C)  0.70 
D)  0.54

Question 19

Mccaughey Corporation's most recent balance sheet and income statement appear below:

-The inventory turnover for Year 2 is closest to:

Accepted Answer

A)  1.20 
B)  0.83 
C)  6.64 
D)  7.30 
A)  1.20 
B)  0.83 
C)  6.64 
D)  7.30

Question 20

Lesmerises Corporation's most recent balance sheet and income statement appear below:     Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $2.85 per share.
-The price-earnings ratio for Year 2 is closest to:

Accepted Answer

A)  5.70 
B)  8.14 
C)  4.13 
D)  9.50 
A)  5.70 
B)  8.14 
C)  4.13 
D)  9.50

Exam 16: How Well Am I Doing Financial Statement Analysis

If a company converts a short-term note payable into a long-term note payable, this transaction would:

Excerpts from Shelton Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,320 and the cost of goods sold was $890. -The accounts receivable turnover for Year 2 is closest to:

Selected financial data (in thousands of dollars) for Barnstable Company appear below: -For Year 2, the net operating income as a percentage of sales was:

Selected data from Sheridan Corporation's year-end financial statements are presented below. The difference between average and ending inventory is immaterial. Sheridan's sales for the year were:

Desktop Co. presently has a current ratio of 1.2 and an acid-test ratio of 0.8. Prepaying next year's office rent of $50,000 will:

Excerpts from Deandrade Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $830. -The accounts receivable turnover for Year 2 is closest to:

Vasconcelos Corporation's most recent balance sheet and income statement appear below: Required: Compute the following for Year 2: a. Working capital. b. Current ratio. c. Acid-test ratio. d. Accounts receivable turnover. e. Average collection period. f. Inventory turnover. g. Average sale period.

Mccaughey Corporation's most recent balance sheet and income statement appear below: -What is the company's acid-test ratio?

Financial statements for Nardella Company appear below: -Nardella Company's debt-to-equity ratio at the end of Year 2 was closest to:

Mccaughey Corporation's most recent balance sheet and income statement appear below: -The inventory turnover for Year 2 is closest to:

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Process Costing

Cost Behavior Analysis and Use

Cost-Volume-Profit Relationship

Variable Costing: a Tool for Management

Activity Based Costing: a Tool to Aid Decision-Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Operating Performance Measures

Segment Reporting, Decentralization, and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

Pricing Products and Services

Profitability Analysis

Further Classification of Labor Costs

Cost of Quality

the Predetermined Overhead Rate and Capacity

Fifo Method

Service Department Allocations

Least-Squares Regression Computations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to

Predetermined Overhead Rates and Overhead Analysis

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by

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