1. A firm has $1,600 in retained earnings on its 2015 balance sheet. In 2016, it reported a net loss of $400 (i.e., net income was negative $400) and paid a dividend of $200. What will be the amount of retained earnings on its 2016 balance sheet?
a. _____ $1,200
b. _____ $1,000
c. _____ $1,800
d. _____ $1,600
e. _____ $2,200
2. Over the most recent year, a company’s cash increased by $100, accounts receivable increased by $120, inventory decreased by $80, and accounts payable increased by $50. What was the change in net working capital?
a. _____ increase of $90
b. _____ decrease of $90
c. _____ increase of $190
d. _____ decrease of $190
e. _____ decrease of $10
3. In 2016, a company spent $5,000 on new machinery, recorded depreciation expense of $800, sold old machinery valued at $300, and reported net fixed assets of $11,400 on the year-end balance sheet. What was the amount of net fixed assets at the end of 2015?
a. _____ $15,300
b. _____ $16,900
c. _____ $6,900
d. _____ $5,300
e. _____ $7,500
4. A company has sales of $2,000,000. Labor and material expense is $900,000, and depreciation is $300,000. Selling, general, and administrative expense is $200,000. Interest expense is $100,000 and the tax rate is 40%. What is the level of operating income?
a. _____ $300,000
b. _____ $360,000
c. _____ $500,000
d. _____ $600,000
e. _____ $800,000
5. Toronto Technology has sales of $5,000, net income of $600, total liabilities of $800, and equity of $1,200. The firm has $400 in accounts payable. On the common-size statement, what is the value of accounts payable?
a. _____ 8.0 percent
b. _____ 16.7 percent
c. _____ 20.0 percent
d. _____ 50.0 percent
e. _____ 66.7 percent