Homework answers / question archive / Louisiana State University, Shreveport ACCT 701 Assessment 3 1)The following data was abstracted from the 2014 December 31, balance sheet of Andrews Company:   •             Cash $136,000 •             Short-term investments 64,000 •             Accounts receivable 184,000 •             Inventory 244,000 •             Prepaid expenses 12,000 •             Accounts payable (all due within one year) 256,000 •             Others short term liabilities 64,000 •             Bonds payable, long term 400,000   The current ratio is: a

Louisiana State University, Shreveport ACCT 701 Assessment 3 1)The following data was abstracted from the 2014 December 31, balance sheet of Andrews Company:   •             Cash $136,000 •             Short-term investments 64,000 •             Accounts receivable 184,000 •             Inventory 244,000 •             Prepaid expenses 12,000 •             Accounts payable (all due within one year) 256,000 •             Others short term liabilities 64,000 •             Bonds payable, long term 400,000   The current ratio is: a

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Louisiana State University, Shreveport

ACCT 701

Assessment 3

1)The following data was abstracted from the 2014 December 31, balance sheet of Andrews Company:

 

•             Cash $136,000

•             Short-term investments 64,000

•             Accounts receivable 184,000

•             Inventory 244,000

•             Prepaid expenses 12,000

•             Accounts payable (all due within one year) 256,000

•             Others short term liabilities 64,000

•             Bonds payable, long term 400,000

 

The current ratio is: a. 1.2:1

b. 3:1

 

c.             1:2

d.   2:1

 

 

 

2.            Use the above data:

 

The quick ratio is:

a.   3:1

b.   1:2

c.             1.2:1

d. 2:1

 

 

 

3.            Benson Company shows the following data on their 2014 financial statements:

 

•             Accounts receivable, January 1 $720,000

•             Accounts receivable, December 31 $960,000

•             Merchandise inventory, January 1 $900,000

•             Merchandise inventory, December 31 $1,020,000

•             Gross sales $4,800,000

•             Sales returns and allowance $180,000

•             Net credit sales $4,620,000

•             Cost of good sols $3,360,000

•             Earnings before interest and taxes (operating income) $720,000

•             Interest on bonds $192,000

•             Net income $384,000

 

The Accounts Receivable Turnover is:

 

a.            5.5 times per year

b.            5.714 times per year

c.             5 times per year

d.            6.667 times per year

 

4.            Use the above data:

 

The Inventory Turnover is:

a. 4.0 times per year b. 3.5 times per year

c.             5.0 times per year

d.            4.8125 times per year

 

 

 

5.            The following information applies to Benson Company 2014:

 

•             Stock Market price, December 31, 2014: $50

•             Common Shares Outstanding, December 31, 2014: 100,000

•             Net Income for year 2014 $400,000

•             Retained Earnings January 1, 2014 $100,000

 

 

USD840,000

 

 

On December 31, 2014 Benson decides to pay the maximum amount it can in dividends to its shareholders. What is the dividend yield ratio?

a.            2%

b.            8%

c.             None of the above d. 10%

 

 

 

 

6.            The working capital of a company is equal to: Select one:

a.            Long term assets less current assets

b.            Stockholders’ equity

c.             Total assets less current assets

d.            Current assets less current liabilities

 

7.            The gross profit percentage decreased from 36.5% in 2014 to 24.8% in 2015. What is the trend in this change?

 

a.            The answer depends upon whether net sales increased or decreased during the period

b.            The change represents a downward, or negative, trend.

c.             The trend cannot be determined unless the dollar amount of the change is also known

d.            This change represents an upward, or favorable trend

 

8.            Below is selected financial information for Pannetone, Inc.

 

BalanceSheet ($inMillions)                                                                          IncomeStatement($inMillions) 

As ets                    LiabilitiesandOwners' Equity                                       Sales      2800

CurrentAs ets                    CurrentLiabilities                                              Cost of Goods Sold          1700

Cash      400         Accounts Payable            200                         Administrative Expenses              200

Accounts Receivable      400         Notes Payable   600                         Depreciation      194

Inventory            600         Total CurrentLiabilities   800                         EarningsBeforeInterestandTaxes             706

Total Current Assets       1400       Long-TermLiabilities                                        Interest Expense             30

                                Long-Term Debt               200                         TaxableIncome 676

FixedAs ets                         Total Long-Term Liabilities            200                         Taxes    90

Property, Plant, and Equipment                900                                                         NetIncome         586

Less Accumulated Depreciation 500         Owners' Equity                                 Dividends            198

Net Fixed Assests            400         Common Stock ($1 Par) 300                         Addition to Retained Earnings    388

                                Capital Surplus  400                                        

                                Retained Earnings            100                         OtherInformation           

                                Total Owners' Equity      800                         Number of Shares Outstanding (Milions)              300

Total As ets         1800       Total Liab.andOwners' Equity     1800                       Price per Share 6.26

 

Select the right answer in the answer box below:

 

Ratio

Gross Profit Ratio

Price-Earnings Ratio

Inventory Turnover

Quick Ratio

Accounts Receivable Turnover

 

               

 

 

 

9.            ABC, Inc. was incorporated two years ago by issuing 1,000 shares of common stock at $200 and borrowing $30,000 from a bank on a long term note. Last year ABC reported net income of

$10,000 and paid a cash dividend of $800. During the year, the company also borrowed an additional $7,600 from the bank. What was the total assets on ABC’s balance sheet at the end of the year last year?

 

a.   $276,800

b.   $240,000

c.             $239,200 d.   $246,800