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					       06169200-New Questions


1. In a common-size income statement, selling expenses are 55%. This means that they're 55%


    A. net profit.
    B. net sales.
    C. gross profit.
    D. net income


2. Isaiah Corporation's Accounts Receivable increased by $35,000, and its Accounts Payable
decreased by $18,000. What is the net effect on cash from operations under the indirect method?


    A. +$35,000
    B. −$53,000
    C. −$18,000

    D. +$17,000


3. Tammy Corporation has 350,000 shares of $3 par common stock outstanding. It has declared
a 5% stock dividend. The current market price of the common stock is $7.50/share. The amount
that will be credited to common stock on the date of declaration is


    A. $183,750.
    B. $131,250.
    C. $78,750.
    D. $52,500.


4. Tammy Corporation has 350,000 shares of $3 par common stock outstanding. It has
declared a 5% stock dividend. The current market price of the common stock is $7.50/share.
The amount that will be debited to retained earnings on the date of declaration is


     A. $52,500.
     B. $183,750.
     C. $131,250.
     D. $78,750.




5. Rick Company has declared a $40,000 cash dividend to shareholders. The company has
5,000 shares of $20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The
preferred stock is noncumulative. How much will be distributed to the preferred and common
stockholders on the date of payment?


    A. $40,000 preferred; $0 common
    B. $0 preferred; $40,000 common
    C. $6,000 preferred; $34,000 common
    D. $34,000 preferred; $6,000 common



6. Brandon Company had extraordinary losses of $150,000. If its corporate tax rate is 30%, at
which amount will the losses be shown on the income statement?


    A. $150,000
    B. $45,000
    C. $105,000
    D. Not enough information is given to answer the question



7. Casey Company reported net income of $35,000; depreciation expenses of $20,000; an
increase in accounts payable of $2,000; and an increase in current notes receivable of $3,000.
Net cash flows from operating activities under the indirect method is
    A. $55,000.
    B. $54,000.
    C. $56,000.
    D. $50,000
8. The Isaiah Corporation Stockholders' Equity section includes the following information:

Preferred Stock     $22,000

Paid-in Capital in Excess of Par—Preferred      2,980

Common Stock        48,000

Paid-in Capital in Excess of Par—Common 3,400

Retained Earnings     7,350

Total par value of the preferred and common stock is

A. $83,730.

B. $76,380.

C. $77,350.

D. $70,000.


9. The records of Ashley Boutique showed a net loss of $30,000; depreciation expense of

$25,000; and an increase in supplies on hand of $5,000. The amount of net cash flow from

operating activities using the indirect method is

A. ($10,000).

B. ($15,000).

C. $15,000.

D. $20,000.



10. Ryan Industries has an inventory turnover of 112 days, an accounts payable turnover of 73

days, and an accounts receivable turnover of 82 days. Ryan's cash conversion cycle is _______

days.

A. 121
B. 103

C. 9

D. 43

11. Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77

days, and an accounts payable turnover of 40 days. Casey's cash conversion cycle is _______

day(s).

A. 153

B. 81

C. 73

D. 1


12. Casey Company has 5,000 shares of treasury cost that it purchased for $13 per share. It

later resold 2,000 of those shares for $17 per share. The amount to be credited to Paid-in

Capital—Treasury Stock is

A. $30,000.

B. $34,000.

C. $8,000.

D. $26,000


13. Operating expenses—other than depreciation—for the year were $335,000. Prepaid
expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash
flow statement using the direct method would be
A. $7,000.
B. $328,000.
C. $342,000.
D. $335,000.

14. If Rick's net sales increased from $40,000 to $80,000 and its operating expenses increased
from $30,000 to $50,000, then vertical analysis based on net sales would show which of the
following for operating expenses for the two periods (to the nearest tenth of a percent)?
           A. 160.0% and
133.3%
           B. 133.3% and
160.0%
           C. 75.0% and
62.5%
           D. 62.5% and
75.0%



15. What are the rate of return on stockholders' equity and the rate of return on common

stockholders' equity (rounded to the nearest one-tenth of a percent) given the following

information:

Net Income $350,000

Preferred Dividends 20,000

Common Stock 48,000

Common Stockholders’ Equity 1/1/2011 4,400,000

Total Stockholders’ Equity 1/1/2011 5,300,000

Total Stockholders’ Equity 12/31/2011 5,500,000

A. Return on Stockholders' Equity: 6.5 %; Return on Common Stockholders' Equity: 7.6%

B. Return on Stockholders' Equity: 8.1 %; Return on Common Stockholders' Equity: 9.2%

C. Return on Stockholders' Equity: 5.6 %; Return on Common Stockholders' Equity: 6.7%

D. Return on Stockholders' Equity: 7.8 %; Return on Common Stockholders' Equity: 8.9%


16. The Amanda Corporation Stockholders' Equity section includes the following information:

Preferred Stock $12,000

Paid-in Capital in Excess of Par— Preferred 2,700
Common Stock 15,000

Paid-in Capital in Excess of Par— Common 4,100

Retained Earnings 8,200

What was the total selling price of the preferred stock?

A. $14,700

B. $20,200

C. $16,100

D. $12,000


17. A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in short-term

investments; and $100,000 in merchandise inventory. The company also has $60,000 in current

liabilities. The company's quick ratio is

A. 1.550.

B. 1.133.

C. 3.217.

D. 0.933.

				
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