FINANCE 571 - Which one of the following accounts is included in stockholders' equity
1.Which one of the following accounts is included in stockholders' equity?
a) deferred taxes
b) accumulated retained earnings
c) plant and equipment
d) intangible assets
e) long-term debt
2.Net working capital is defined as:
a) current assets minus current liabilities.
b) total assets minus total liabilities.
c) current assets plus fixed assets.
d) fixed assets minus long-term liabilities.
e) current assets plus stockholders' equity.
3.Which one of the following is a current liability?
a) amount due from a customer in 30 days
b) loan payment due in 13 months
c) debt payable to a mortgage company in nine months
d) estimated taxes just paid
e) amount due to a supplier in 18 months
4.If a firm is currently profitable, then:
a) its current cash inflows must exceed its current cash outflows.
b) the timing of the cash flows on proposed projects is irrelevant.
c) it will always have sufficient cash to pay its bills in a timely manner.
d) its reported sales exceed its costs.
e) its cash flows are known with certainty.
5.Which one of these is a non-cash item?
a) current taxes
b) interest expense
c) dividends
d) depreciation
e) selling expenses
6.
Sankey, Inc., has current assets of $5,760, net fixed assets of $25,500, current liabilities of $5,200, and long-term debt of $12,500. (Do not round intermediate calculations.)
What is the value of the shareholders' equity account for this firm?
Shareholders' equity $
How much is net working capital?
Net working capital $
7.
Shelton, Inc., has sales of $406,000, costs of $194,000, depreciation expense of $59,000, interest expense of $40,000, and a tax rate of 35 percent. (Do not round intermediate calculations.)
What is the net income for the firm?
Net income $
Suppose the company paid out $49,000 in cash dividends. What is the addition to retained earnings?
Addition to retained earnings $
8.
During the year, the Senbet Discount Tire Company had gross sales of $1.07 million. The firm’s cost of goods sold and selling expenses were $526,000 and $216,000, respectively. The firm also had notes payable of $810,000. These notes carried an interest rate of 6 percent. Depreciation was $131,000. The firm’s tax rate was 30 percent.
a.
What was the firm’s net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)
Net income $
b.
What was the firm’s operating cash flow? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)
Operating cash flow $
10.
The debt-equity ratio is measured as:
a) total equity divided by long-term debt.
b) total assets minus total debt, divided by total equity.
c) total debt divided by total equity.
d) long-term debt divided by total equity.
e) total equity divided by total debt.
11.
If a firm produces a return on assets of 15 percent and also a return on equity of 15 percent, then the firm:
a) is using its assets as efficiently as possible.
b) has no net working capital.
c) has no debt of any kind.
d) has an equity multiplier of 2.
e) also has a current ratio of 15.
12.
A firm has total debt of $1,250 and a debt-equity ratio of .35. What is the value of the total assets?
a) $4,385
b) $1,688
c) $3,571
d) $3,500
e) $4,821
13.
Al's Sport Store has sales of $3,070, costs of goods sold of $2,050, inventory of $544, and accounts receivable of $416. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?
a) 114.8
b) 64.7
c) 114.0
d) 95.5
e) 96.9
14.
The current ratio is measured as:
a) current assets minus current liabilities.
b) current liabilities minus inventory, divided by current assets.
c) current liabilities divided by current assets.
d) current assets divided by current liabilities.
e) cash on hand divided by current liabilities.
15.
The higher the inventory turnover, the:
a) greater the amount of inventory held by a firm.
b) longer it takes a firm to sell its inventory.
c) less time inventory items remain on the shelf.
d) higher the inventory as a percentage of total assets.
e) lesser the amount of inventory held by a firm.
16.
The quick ratio is measured as:
a) cash on hand plus current liabilities, divided by current assets.
b) current liabilities divided by current assets, plus inventory.
c) current assets divided by current liabilities.
d) current assets minus inventory, divided by current liabilities.
e) current assets minus inventory minus current liabilities.
17.
The inventory turnover ratio is measured as:
a) inventory times total sales.
b) inventory divided by cost of goods sold.
c) total sales minus inventory.
d) cost of goods sold divided by inventory.
e) inventory divided by sales.
18.
Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _______ ratios.
a) market value
b) asset management
c) short-term solvency
d) profitability
e) long-term solvency
19.
The total asset turnover ratio measures the amount of:
a) total assets needed for every $1 of sales.
b) sales generated by every $1 in total assets.
c) fixed assets required for every $1 of sales.
d) net income generated by every $1 in total assets.
e) net income than can be generated by every $1 of fixed assets.
20.
A firm has a debt-equity ratio of .37. What is the total debt ratio?
a) .59
b) 1.70
c) .41
d) .27
e) 1.37
21.
A firm has a total debt ratio of .47. This means the firm has 47 cents in debt for every:
a) $.53 in total assets.
b) $1 in total equity.
c) $.53 in total equity.
d) $1 in fixed assets.
e) $1 in current assets.
22.
Which statement expresses all accounts as a percentage of total assets?
a) statement of cash flows
b) common-size income statement
c) pro forma balance sheet
d) pro forma income statement
e) common-size balance sheet
23.
|
Galaxy United, Inc. |
|
|
Net sales |
$8,500 |
|
Less: Cost of goods sold |
7,240 |
|
Less: Depreciation |
410 |
|
Earnings before interest and taxes |
850 |
|
Less: Interest paid |
77 |
|
Taxable Income |
773 |
|
Less: Taxes |
270 |
|
Net income |
$ 502 |
|
Galaxy United, Inc. |
||||||
|
|
2008 |
2009 |
|
|
2008 |
2009 |
|
Cash |
$ 120 |
$ 150 |
|
Accounts payable |
$1,120 |
$1,150 |
|
Accounts rec. |
940 |
780 |
|
Long-term debt |
930 |
1,209 |
|
Inventory |
1,480 |
1,510 |
|
Common stock |
$3,180 |
$2,980 |
|
Sub-total |
$2,540 |
$2,440 |
|
Retained earnings |
500 |
701 |
|
Net fixed assets |
3,190 |
3,600 |
|
|
|
|
|
Total assets |
$5,730 |
$6,040 |
|
Total liab. &equity |
$5,730 |
$6,040 |
What is the return
on equity for 2009?
rev: 01_14_2016_QC_CS-37830
a) 9 percent
b) 17 percent
c) 15 percent
d) 12 percent
e) 14 percent
24.
If Wilkinson, Inc., has an equity multiplier of 1.65, total asset turnover of 1.7, and a profit margin of 4.5 percent, what is its ROE? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
ROE __________%
25.
The financial ratio measured as net income divided by sales is known as the firm's:
a) return on assets.
b) earnings before interest and taxes.
c) asset turnover.
d) profit margin.
e) return on equity.
26.
The financial ratio that measures the accounting profit per dollar of book equity is referred to as the:
a) market profit-to-book ratio.
b) equity turnover.
c) profit margin.
d) return on equity.
e) price-earnings ratio.
27.
Puffy's Pastries generates five cents of net income for every $1 in equity. Thus, Puffy's has _______ of 5 percent.
a) a price-earnings ratio
b) an EV multiple
c) a profit margin
d) a return on assets
e) a return on equity
28.
If stockholders want to know how much profit the firm is making on their entire investment in that firm, the stockholders should refer to the:
a) return on assets.
b) earnings per share.
c) return on equity.
d) equity multiplier.
e) profit margin.
29.
The most effective method of directly evaluating the financial performance of a firm is to compare the financial ratios of the firm to:
a) those of other firms located in the same geographic area that are similarly sized.
b) the average ratios of the firm’s international peer group.
c) the firm’s ratios from prior time periods and to the ratios of firms with similar operations.
d) the average ratios of all firms within the same country over a period of time.
e) those of the largest conglomerate that has operations in the same industry as the firm.
30.
Which one of these equations is an accurate expression of the balance sheet?
a) Liabilities? Stockholders’ equity ?Assets
b) Assets? Stockholders’ equity ?Liabilities
c) Stockholders’ equity? Assets + Liabilities
d) Stockholders’ equity? Assets ?Liabilities
e) Assets? Liabilities ?Stockholders’ equity
31.
The financial statement summarizing a firm's accounting performance over a period of time is the:
a) statement of equity.
b) income statement.
c) balance sheet.
d) statement of cash flows.
e) tax reconciliation statement.
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Solution: FINANCE 571 - Which one of the following accounts is included in stockholders' equity