1. Cotuit Company has a current ratio of 3.3 and an acid-test ratio of 2.6. The company's current assets consist of cash, marketable securities, accounts receivable, and inventories. Inventory equals $28,000. Cotuit Company's current liabilities must be:
o $104,000
o $40,000
o $19,600
o $28,000
2. Data from Fontecchio Corporation's most recent balance sheet appear below:
Cash $39,000
Marketable securities $40,000
Accounts receivable $119,000
Short-term notes receivable $0
Inventory $78,000
Prepaid expenses $34,000
Current liabilities $264,000
The corporation's acid-test ratio is closest to:
o 0.30
o 0.15
o 0.75
o 0.60
3. Gnas Corporation's total current assets are $213,000, its noncurrent assets are $593,000, its total current liabilities are $162,000, its long-term liabilities are $492,000, and its stockholders' equity is $152,000. The current ratio is closest to:
o 1.31
o 0.76
o 1.40
o 1.07
4. Calin Corporation has total current assets of $619,000, total current liabilities of $234,000, total stockholders' equity of $1,187,000, total net plant and equipment of $962,000, total assets of $1,581,000, and total liabilities of $394,000. The company's working capital is:
o $394,000
o $343,000
o $385,000
o $459,000
5. Erastic Corporation has $28,000 in cash, $15,000 in marketable securities, $55,000 in account receivable, $68,000 in inventories, and $56,000 in current liabilities. The corporation's current assets consist of cash, marketable securities, accounts receivable, and inventory. The corporation's acid-test ratio is closest to:
o 1.75
o 0.98
o 2.96
o 1.48
6. Orem Corporation's current liabilities are $410,640, its long-term liabilities are $343,360, and its working capital is $574,900. If the corporation's debt-to-equity ratio is 0.29, total long-term assets must equal:
o $2,600,000
o $2,779,100
o $2,368,460
o $952,460
7. Natcher Corporation's accounts receivable at the end of Year 2 was $137,000 and its accounts receivable at the end of Year 1 was $142,000. The company's inventory at the end of Year 2 was $141,000 and its inventory at the end of Year 1 was $132,000. Sales, all on account, amounted to $1,394,000 in Year 2. Cost of goods sold amounted to $811,000 in Year 2. The company's operating cycle for Year 2 is closest to: (Assume 365 days a year. Do not round your intermediate answers.)
o 46.5 days
o 71.9 days
o 67.8 days
o 98.4 days
8. Granger Corporation had $200,000 in sales on account last year. The beginning accounts receivable balance was $16,000 and the ending accounts receivable balance was $24,000. The corporation's average collection period was closest to: (Assume 365 days a year. Round your intermediate answers to 2 decimal places.)
o 29.2 days
o 36.5 days
o 43.8 days
o 10.0 days
9. During the year just ended, the retailer James Corporation purchased $431,000 of inventory. The inventory balance at the beginning of the year was $182,000. If the cost of goods sold for the year was $456,000, then the inventory turnover for the year was: (Round your Final answers to 2 decimal places.)
o 2.69
o 2.51
o 2.90
o 2.54
10. Pascarelli Corporation's inventory at the end of Year 2 was $139,000 and its inventory at the end of Year 1 was $168,000. Cost of goods sold amounted to $950,000 in Year 2. The company's average sale period (turnover in days) for Year 2 is closest to: (Assume 365 days a year. Round your intermediate answers to 2 decimal places.)
o 52.8 days
o 53.4 days
o 59.0 days
o 65.2 days
11. Deflorio Corporation's inventory at the end of Year 2 was $162,000 and its inventory at the end of Year 1 was $148,000. The company's total assets at the end of Year 2 were $1,456,000 and its total assets at the end of Year 1 were $1,408,000. Sales amounted to $1,400,000 in Year 2. The company's total asset turnover for Year 2 is closest to:
o 0.98
o 1.02
o 9.24
o 9.03
12. Data from Davoren Corporation's most recent balance sheet and income statement appear below:
This Year Last Year
Accounts receivable $125,000 $123,000
Inventory $171,000 $200,000
Sales on account $727,000
Cost of goods sold $591,745
The average sale period for this year is closest to: (Assume 365 days a year. Do not round intermediate calculations and round your answer to 1 decimal place.)
o 60.4 days
o 104.0 days
o 51.7 days
o 114.4 day
13. Hagerman Corporation's most recent income statement appears below:
Sales (all on account) $250,000
Cost of goods sold 115,000
Gross margin 135,000
Selling and administrative expenses 39,000
Net operating income 96,000
Interest expense 21,000
Net income before taxes 75,000
Income taxes (30%) 22,500
Net income $ 52,500
The beginning balance of total assets was $250,000 and the ending balance was $246,400. The return on total assets is closest to: (Round your answer to 1 decimal place.)
o 27.1%
o 38.7%
o 21.2%
o 30.2%
14. Nickolls Corporation has provided the following financial data:
Cash $204,000
Accounts receivable $309,000
Total current assets $749,000
Total current liabilities $199,000
The company's working capital is:
o $1,223,000
o $550,000
o $809,000
o $749,000
15. Nickolls Corporation has provided the following financial data:
Cash $208,000
Accounts receivable $315,000
Total current assets $759,000
Total current liabilities $207,000
The company's current ratio is closest to:
o 0.57
o 0.42
o 0.29
o 3.67
16. Nickolls Corporation has provided the following financial data:
Cash $214,000
Accounts receivable $324,000
Total current assets $774,000
Total current liabilities $219,000
The company's acid-test (quick) ratio is closest to:
o 2.60
o 2.46
o 3.23
o 3.53
17. Mayfield Corporation has provided the following financial data:
Assets
Current assets:
Cash $233,000
Accounts receivable 246,000
Inventory 206,000
Prepaid expenses 12,000
________________________________________
Total current assets 697,000
Plant and equipment, net 675,000
________________________________________
Total assets $1,372,000
________________________________________________________________________________
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $168,000
Accrued liabilities 54,000
Notes payable, short term 47,000
________________________________________
Total current liabilities 269,000
Bonds payable 104,000
________________________________________
Total liabilities 373,000
________________________________________
Stockholders' equity:
Common stock, $4 par value 364,000
Additional paid-in capital--common stock 82,000
Retained earnings 553,000
________________________________________
Total stockholders' equity 999,000
________________________________________
Total liabilities & stockholders' equity $1,372,000
________________________________________________________________________________
The company's acid-test (quick) ratio is closest to:
rev: 02_25_2016_QC_CS-43399
o 1.88
o 1.83
o 2.59
o 1.78
18. Excerpts from Colter Corporation's most recent balance sheet appear below:
Year 2 Year 1
Current assets:
Cash $101 $131
Accounts receivable 122 132
Inventory 203 193
Prepaid expenses 51
________________________________________ 51
________________________________________
Total current assets $477
________________________________________________________________________________ $507
________________________________________________________________________________
Total current liabilities $364
________________________________________________________________________________ $345
________________________________________________________________________________
Sales on account in Year 2 amounted to $1,485 and the cost of goods sold was $885.
The working capital at the end of Year 2 is:
o $477
o $924
o $629
o $113
19. Excerpts from Colter Corporation's most recent balance sheet appear below:
Year 2 Year 1
Current assets:
Cash $100 $130
Accounts receivable 120 130
Inventory 200 190
Prepaid expenses 50
________________________________________ 50
________________________________________
Total current assets $470
________________________________________________________________________________ $500
________________________________________________________________________________
Total current liabilities $360
________________________________________________________________________________ $340
________________________________________________________________________________
Sales on account in Year 2 amounted to $1,460 and the cost of goods sold was $870.
The acid-test ratio at the end of Year 2 is closest to:
o 0.75
o 0.93
o 0.61
o 1.31
20. Freiman Corporation's most recent balance sheet and income statement appear below:
Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
Year 2 Year 1
Assets
Current assets:
Cash $180 $140
Accounts receivable 270 290
Inventory 140 150
Prepaid expenses 50
________________________________________ 50
________________________________________
Total current assets 640 630
Plant and equipment, net 800
________________________________________ 800
________________________________________
Total assets $1,440
________________________________________________________________________________ $1,430
________________________________________________________________________________
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $150 $170
Accrued liabilities 100 100
Notes payable, short term 70
________________________________________ 80
________________________________________
Total current liabilities 320 350
Bonds payable 310
________________________________________ 320
________________________________________
Total liabilities 630
________________________________________ 670
________________________________________
Stockholders' equity:
Common stock, $2 par value 120 120
Additional paid-in capital--common stock 250 250
Retained earnings 440
________________________________________ 390
________________________________________
Total stockholders' equity 810
________________________________________ 760
________________________________________
Total liabilities & stockholders' equity $1,440
________________________________________________________________________________ $1,430
________________________________________________________________________________
Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account) $1,710
Cost of goods sold 980
________________________________________
Gross margin 730
Selling and administrative expenses 409
________________________________________
Net operating income 321
Interest expense 55
________________________________________
Net income before taxes 266
Income taxes (30%) 80
________________________________________
Net income $186
________________________________________________________________________________
The current ratio at the end of Year 2 is closest to:
o 0.55
o 2.00
o 0.54
o 1.14
21. Data from Dunshee Corporation's most recent balance sheet appear below:
Year 2 Year 1
Current assets:
Cash $150 $120
Accounts receivable 310 330
Inventory 150 170
Prepaid expenses 30
________________________________________ 30
________________________________________
Total current assets $640
________________________________________________________________________________ $650
________________________________________________________________________________
Total current liabilities $310
________________________________________________________________________________ $320
________________________________________________________________________________
Sales on account in Year 2 amounted to $1,670 and the cost of goods sold was $1,030.
The working capital at the end of Year 2 is:
o $330
o $640
o $1,050
o $920
22. Data from Dunshee Corporation's most recent balance sheet appear below:
Year 2 Year 1
Current assets:
Cash $142 $112
Accounts receivable 294 314
Inventory 126 146
Prepaid expenses 22
________________________________________ 22
________________________________________
Total current assets $584
________________________________________________________________________________ $594
________________________________________________________________________________
Total current liabilities $278
________________________________________________________________________________ $280
________________________________________________________________________________
Sales on account in Year 2 amounted to $1,470 and the cost of goods sold was $910.
The acid-test ratio at the end of Year 2 is closest to:
o 2.10
o 1.65
o 1.57
o 1.18
23. Excerpts from Sydner Corporation's most recent balance sheet appear below:
Year 2 Year 1
Current assets:
Cash $148 $164
Accounts receivable 218 238
Inventory 256 212
Prepaid expenses 14
________________________________________ 14
________________________________________
Total current assets $636
________________________________________________________________________________ $628
________________________________________________________________________________
Total current liabilities $376
________________________________________________________________________________ $350
________________________________________________________________________________
Sales on account in Year 2 amounted to $1,490 and the cost of goods sold was $960.
The working capital at the end of Year 2 is:
o $636
o $1,068
o $920
o $260
24. Excerpts from Sydner Corporation's most recent balance sheet appear below:
Year 2 Year 1
Current assets:
Cash $176 $178
Accounts receivable 246 266
Inventory 312 254
Prepaid expenses 28
________________________________________ 28
________________________________________
Total current assets $762
________________________________________________________________________________ $726
________________________________________________________________________________
Total current liabilities $432
________________________________________________________________________________ $420
________________________________________________________________________________
Sales on account in Year 2 amounted to $1,840 and the cost of goods sold was $1,170.
The acid-test ratio at the end of Year 2 is closest to:
o 1.76
o 1.04
o 0.98
o 1.43
25. Deacon Corporation has provided the following financial data from its balance sheet and income statement:
Year 2 Year 1
Total assets $1,290,000 $1,223,000
Total liabilities $598,000 $461,900
Total stockholders' equity $734,200 $868,000
Net operating income (income before interest and taxes) $69,612
Interest expense $33,000
The company's debt-to-equity ratio at the end of Year 2 is closest to:
o 0.69
o 0.63
o 0.53
o 0.81
26. Lundberg Corporation's most recent balance sheet and income statement appear below:
Statement of Financial Position
December 31, Year 2 and Year 1
(in thousands of dollars)
Year 2 Year 1
Asset:
Current assets:
Cash $ 190 $ 200
Accounts receivable 300 310
Inventory 200 190
Prepaid expenses 20 20
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total current assets 710 720
Plant and equipment, net 981 961
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total assets $ 1,691 $ 1,681
________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable $ 250 $ 240
Accrued liabilities 140 140
Notes payable, short term 190 200
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total current liabilities 580 580
Bonds payable 280 330
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total liabilities 860 910
________________________________________ ________________________________________ ________________________________________ ________________________________________
Stockholders' equity:
Preferred stock, $100 par value, 10% 290 290
Common stock, $1 par value 100 100
Additional paid-in capital--common stock 110 110
Retained earnings 331 280
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total stockholders' equity 831 780
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total liabilities and stockholders' equity $ 1,691 $ 1,690
________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________
________________________________________
Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account) $ 1,420
Cost of goods sold 859
________________________________________ ________________________________________ ________________________________________
Gross margin 561
Selling and administrative expenses 350
________________________________________ ________________________________________ ________________________________________
Net operating income 211
Interest expense 40
________________________________________ ________________________________________ ________________________________________
Net income before taxes 171
Income taxes (30%) 51
________________________________________ ________________________________________ ________________________________________
Net income $ 120
________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________
________________________________________
Dividends on common stock during Year 2 totaled $40 thousand. The market price of common stock at the end of Year 2 was $9.45 per share.
Required:
a. Compute the gross margin percentage for Year 2.(Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Gross margin percentage %
b. Compute the earnings per share (of common stock) for Year 2.(Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
Earnings per share $
c. Compute the price-earnings ratio for Year 2.(Do not round intermediate calculations. Round your answer to 1 decimal place.)
Price-earnings ratio
d. Compute the dividend payout ratio for Year 2.(Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Dividend payout ratio %
e. Compute the dividend yield ratio for Year 2.(Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Dividend yield ratio %
f. Compute the return on total assets for Year 2.(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Return on total assets %
g. Compute the return on common stockholders' equity for Year 2.(Round your answer to 2 decimal places.Omit the "%" sign in your response.)
Return on common stockholders' equity %
h. Compute the book value per share for Year 2. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
Book value per share $
i. Compute the working capital for Year 2.(Input your answer in thousands of dollars. Omit the "tiny_mce_markerquot; sign in your response.)
Working capital $
j. Compute the current ratio for Year 2. (Round your answer to 2 decimal places.)
Current ratio
k. Compute the acid-test ratio for Year 2.(Round your answer to 1 decimal place.)
Acid-test ratio
l. Compute the accounts receivable turnover for Year 2. (Round your answer to 2 decimal places.)
Accounts receivable turnover
m. Compute the average collection period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.)
Average collection period days
n. Compute the inventory turnover for Year 2. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
Inventory turnover $
o. Compute the average sale period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Average sale period day
p. Compute the times interest earned for Year 2. (Round your answer to 2 decimal places.)
Times interest earned
q. Compute the debt-to-equity ratio for Year 2.(Round your answer to 2 decimal places.)
Debt-to-equity ratio
27. Excerpts from Stepney Corporation's most recent balance sheet (in thousands of dollars) appear below:
Year 2 Year 1
Current assets:
Cash $ 300 $ 160
Accounts receivable 370 380
Inventory 250 180
Prepaid expenses 71 81
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total current assets $ 991 $ 801
________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________
Current liabilities:
Accounts payable $ 300 $ 300
Accrued liabilities 210 99
Notes payable, short term 81 71
________________________________________ ________________________________________ ________________________________________ ________________________________________
Total current liabilities $ 591 $ 470
________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________
________________________________________
Sales on account during the year totaled $1,550 thousand. Cost of goods sold was $945 thousand.
Required:
a. Compute the following working capital for Year 2. (Enter your answer in thousands of dollars, i.e., 100,000 should be entered as 100. Omit the "tiny_mce_markerquot; sign in your response.)
Working capital $
b. Compute the following current ratio for Year 2. (Round your answer to 2 decimal places.)
Current ratio
c. Compute the following acid-test ratio for Year 2. (Round your answer to 2 decimal places.)
Acid-test ratio
d. Compute the following accounts receivable turnover for Year 2. (Round your answer to 2 decimal places.)
Accounts receivable turnover
e. Compute the following average collection period for Year 2. (Use 365 days in a year. Round your intermediate calculations to 2 decimals places and your final answer to 1 decimal place.)
Average collection period days
f. Compute the following inventory turnover for Year 2. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
Inventory turnover $
g. Compute the following average sale period for Year 2.(Use 365 days in a year. Round your intermediate calculations to 2 decimals places and your final answer to 1 decimal place.)
Average sale period days
rev: 03_02_2015_QC_CS-9044
28. Gulick Corporation's most recent income statement appears below:
Sales (all on account) $ 310,000
Cost of goods sold 155,000
________________________________________ ________________________________________
Gross margin 155,000
Selling and administrative expenses 69,000
________________________________________ ________________________________________
Net operating income 86,000
Interest expense 10,000
________________________________________ ________________________________________
Net income before taxes 76,000
Income taxes (30%) 22,800
________________________________________ ________________________________________
Net income $ 53,200
________________________________________________________________________________ ________________________________________________________________________________
________________________________________
The beginning balance of total assets was $310,000 and the ending balance was $270,000.
Required:
Compute the return on total assets. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Return on total assets %