Hi,I need provide explanations to these only questions (Q19, Q20, Q21, Q25, Q26, Q28, Q29, Q30) ; for calculatio

Hi,I need provide explanations to these only questions (Q19, Q20, Q21, Q25, Q26, Q28, Q29, Q30) ; for calculation questions, please show your work.Questions on file.


Practice Quiz 3
1.
If the owners’ equity at the end of the accounting period is greater than the owners’ equity
at the beginning of the accounting period, the firm’s
a. capital has increased
b. working capital has increased
c. cash has increased
d. capital has been maintained
2.
The ease with which an asset can be converted into cash is termed
a. financial flexibility
b. liquidity
c. operating capability
d. capital maintenance
3.
Which statement is false?
a. The balance sheet of an entity purports to show the true value of the entity.
b. The balance sheet should show a company’s liquidity.
c. The balance sheet reflects the financial capital of a company.
d. The balance sheet summarizes the financial position of an entity at a point in time.
4.
The residual interest in a company’s assets is represented by its
a. net assets
b. stockholders’ equity
c. ownership interest
d. all of the above
5.
Which measurement alternative is in use if an asset is measured by the amount of cash (or
its equivalent) into which it is expected to be converted in due course of business less direct
costs necessary to make that conversion?
a. current exit value
b. current cost/current proceeds
c. present value
d. net realizable value
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6.
The valuation method primarily used in the balance sheets of business entities is
a. current exit value
b. historical cost
c. present value
d. net realizable value
7.
The amount of cash (or equivalent) that would be required to obtain an asset shown on a
balance sheet, on the date of the balance sheet, is called the asset’s
a. historical cost
b. current cost
c. current exit value
d. present value
8.
Information:
Long-term debt
Retained earnings
Current assets
Property, plant, and equipment
Common stock
Current liabilities
$ 40
30
150
60
130
50
Working capital amounts to
a. $150
b. $130
c. $120
d. $100
9.
Current liabilities would include all of the following except
a. wages payable
b. obligations under capital lease contracts
c. current portion of long-term debt
d. unearned rent revenue
10. Cash equivalents are securities that
a. management intends to convert into cash within one year
b. have maturity dates of at least six months
c. management intends to convert into cash within the normal operating cycle
d. have maturity dates of three months or less
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11. FASB has suggested the development of homogenous classes of assets and liabilities. For
assets this can be accomplished by following guidelines that include:
a. reporting assets according to their use outside the activities of the corporation.
b. reporting all assets the same regardless of the implications on a company’s financial
flexibility.
c. reporting the valuation of assets at their net realizable value.
d. reporting assets according to the fair value measurement used in their valuation.
12. Which of the following would not be included in long-term liabilities?
a. obligations for future pension payments
b. capital leases payable
c. liabilities on options to sell stock
d. unearned revenues
13. On the balance sheet, treasury stock is classified as a(n)
a. long-term investment account
b. contra stockholders’ equity account
c. capital stock account
d. other asset account
14. Which of the following would not be classified as contributed capital?
a. additional paid-in capital
b. unrealized capital
c. common stock
d. preferred stock
15. Which of the following is not included in comprehensive income?
a. net income
b. unrealized gains in the fair market value of equipment
c. foreign currency translation adjustments
d. certain pension liability adjustments
16. All of the following are examples of subsequent events that would be disclosed in the
footnotes to the financial statements except
a. fire or flood loss
b. a litigation settlement
c. a bond issuance after the balance sheet date
d. the inability to collect a major customer’s accounts receivable
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17. FASB Statement No. 133 requires that all derivative financial instruments be reported at
their
a. historical cost
b. fair value
c. present value
d. par value
18. The integrated disclosures required by the SEC for all regulated companies include all of
the following except
a. dividends on common stock
b. management’s discussion
c. common stock market prices
d. book value of common shares
19. Given the following information regarding accounts receivable
Accounts receivable, December 31
$ 5,000
Total current assets, January 1
20,000
Sales (40% cash sales)
50,000
Total current assets, December 31
26,000
Accounts receivable, January 1
3,000
What is the accounts receivable turnover?
a.
7.5 times
b.
5.75 times
c.
6 times
d.
12.5 times
20. Given the following information:
Preferred dividends
$ 50
Income taxes
$200
Average number of shares outstanding
250 shares
Market price per common share
$ 10
Net income
$600
What is the price/earnings ratio?
a.
3.3 times
b.
2.9 times
c.
3.8 times
d.
4.5 times
4
21. Given the following information:
Inventory
$500
Short-term marketable securities
100
Current liabilities
400
Cash
200
Prepaid insurance
300
Accounts receivable
400
What is the quick ratio?
a.
0.5 times
b.
3 times
c.
1.75 times
d.
3.75 times
22. The following information was obtained from the records of Tobin Company for 2006:
Net Sales
$2,600,000
Interest Expense
80,000
Income Tax Expense
40,000
Net Income
100,000
How many times was interest earned in 2006?
a.
1.25 times
b.
1.75 times
c.
2.75 times
d.
32.5 times
23. Marley Company reported the following information for the year ended December 31,
2007:
Net Income
$ 400,000
Preferred Dividends Declared and Paid
50,000
Common Dividends Declared and Paid
80,000
Average Common Shares Outstanding
70,000
Ending Market Price per Share
40
Net Sales
4,100,000
Marley’s earnings per share for 2007 was:
a.
$3.86
b.
$5.00
c.
$5.71
d.
$6.43
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24. Hodges Company has a current ratio of 1.6 to 1. Salaries payable accrued last quarter are
paid this quarter. What is the effect of this payment on the current ratio this quarter?
a.
increase
b.
decrease
c.
no effect
d.
cannot determine from information presented
25. The following information was obtained from the accounting records of the Freye
Company for 2008:
Cost of Goods Sold
$3,600,000
Merchandise Inventory:
January 1
400,000
December 31
460,000
Assuming a business year consisting of 365 days, what was Freye’s number of days’ sales in
inventories for 2008?
a.
46.6 days
b.
43.6 days
c.
40.6 days
d.
36.7 days
26. Given the following information for the Smith Company:
Net Sales (all on credit)
$4,800,000
Interest Expense
240,000
Income Tax Expense
180,000
Net Income
420,000
Income Tax Rate
30%
Total Assets:
January 1, 2007
1,800,000
December 31, 2007
2,000,000
Stockholders’ Equity:
January 1, 2007
1,400,000
December 31, 2007
1,500,000
Current Assets, December 31, 2007
680,000
Quick Assets, December 31, 2007
400,000
Current Liabilities, December 31, 2007
410,000
Net Accounts Receivable:
January 1, 2007
260,000
December 31, 2007
200,000
6
Smith’s return on total assets during 2003 was
a.
42.0%
b.
34.7%
c.
30.9%
d.
22.1%
27. Given the following information for the Smith Company:
Net Sales (all on credit)
$4,800,000
Interest Expense
240,000
Income Tax Expense
180,000
Net Income
420,000
Income Tax Rate
30%
Total Assets:
January 1, 2008
1,800,000
December 31, 2008
2,000,000
Stockholders’ Equity:
January 1, 2008
1,400,000
December 31, 2008
1,500,000
Current Assets, December 31, 2008
680,000
Quick Assets, December 31, 2008
400,000
Current Liabilities, December 31, 2008
410,000
Net Accounts Receivable:
January 1, 2008
260,000
December 31, 2008
200,000
Smith’s return on stockholders’ equity for 2008 was
a.
22%
b.
28%
c.
29%
d.
30%
Please use the following information to answer questions 28-30.
On January 1, 2007, Mendez Corporation had the following stockholders’ equity account
balances:
Accumulated other comprehensive income
$ 30,000
Additional paid-in capital on common stock
80,000
Common stock, $5 par (30,000 shares authorized)
50,000
Retained earnings
140,000
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During 2007, the following events occurred in the order listed and were properly recorded:
a.
The company issued 3,000 shares of common stock at $20 per share.
b.
The company earned net income of $26,300.
c.
The company paid a $1.20 per share dividend on its common stock.
d.
The company experienced an unrealized decrease in the value of its investment in
available-for-sale securities of $3,000.
28. How much is the company’s beginning stockholders’ equity?
a. $140,000
b. $130,000
c. $270,000
d. $300,000
29. How much is the company’s ending retained earnings balance?
a.
$140,000
b.
$166,300
c.
$150,700
d.
$124,400
30. How much is the company’s ending stockholders’ equity?
a.
$300,000
b.
$360,000
c.
$370,700
d.
$367,700
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