Problem 1: The Tom Smith Corporation has the following items: cash, $5,000; machinery, $50,000; building, $150,000; note payable bank, $10,000; savings, $10,000; long-term debt, $50,000; accounts payable, $30,000; taxes payable, $5,000; accounts receivable, $30,000; inventory, $10,000; depreciation building, $35,000; depreciation machinery, $25,000; and land, $50,000. Total assets for this corporation are:
A. $55,000.
B. $95,000.
C. $155,000.
D. $190,000.
E. $245,000.
Problem 2: Which of the following is not an example of economic capital?
A. a bond issued by IBM.
B. a delivery truck used by Federal Express.
C. a desk in a classroom.
D. an electric plant used by your local utility to generate electricity.
E. all of the above are examples of economic capital.
Problem 3: Liquidity ratios can be obtained from information on the balance sheet, while activity ratios require information obtained from the:
A. balance sheet only.
B. income statement and balance sheet.
C. income statement only.
D. income statement, balance sheet, and statement of cash flows.
E. none of the above.