ACC 557 Week 11, Quiz - Graded 100% Latest Version.docx

ACC 557 Week 11, Quiz - Graded 100% Latest V 1. Parker Hardware Store had net credit sales of $8,000,000 and cost of goods sold of $5,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The receivables turnover was A). 11.4 times. B). 12.3 times. C). 4.6 times. D). 7.7 times. 2. Which one of the following is not a tool in financial statement analysis? A). Ratio analysis B). Horizontal analysis C). Vertical analysis D). Circular analysis 3. Under IFRS, there is no classification for A). changes in accounting principles. B). changes in accounting estimates. C). discontinued operations. D). extraordinary items 4. ACME Company reports income before income taxes of $2,400,000 and had an extra-ordinary loss of $800,000. If the tax rate is 30%, A). the income before the extraordinary item is $1,680,000. B). the income before the extraordinary item is $1,920,000. C). the extraordinary loss will be reported at $240,000. D). the extraordinary loss would be reported on the income statement at $800,000. 5. Darius, Inc. has the following income statement (in millions): DARIUS, INC. Income Statement For the Year Ended December 31, 2012 Net Sales $300 Cost of Goods Sold 120 Gross Profit 180 Operating Expenses 44 Net Income $136 Using vertical analysis, what percentage is assigned to Net Income? A). 100% B). 75.6% C). 45.3% D). None of these 6. The following amounts were taken from the financial statements of Plant Company: 2013 2012 Total assets $800,000 $1,000,000 Net sales 720,000 650,000 Gross profit 352,000 320,000 Net income 126,000 117,000 Weighted average number of common shares outstanding 90,000 90,000 Market price of common stock $35 $39 The return on assets ratio for 2013 is A). 14% B). 32%. C). 28%. D). 16%. 7. Parrish, Inc. decided on January 1 to discontinue its telescope manufacturing division. On July 1, the division’s assets with a book value of $1,250,000 are sold for $850,000. Operating income from January 1 to June 30 for the division amounted to $125,000. Ignoring income taxes, what total amount should be reported on Parrish’s income statement for the current year under the caption, Discontinued Operations? A). $400,000 loss B). $275,000 loss C). $525,000 D). $125,000 8. Earnings per share is calculated A). only for preferred stock. B). only for treasury stock. C). for common and preferred stock. D). only for common stock. 9. The acid-test ratio is also known as the A). current ratio. B). fast ratio. C). quick ratio. D). times interest earned ratio 10. In performing a vertical analysis, the base for sales revenues on the income statement is A). net income. B). cost of goods available for sale. C). net sales. D). sales. 11. The order of presentation of nontypical items that may appear on the income statement is A). Other revenues and expenses, Extraordinary items, Discontinued operations. B). Extraordinary items, Discontinued operations, Other revenues and expenses. C). Discontinued operations, Extraordinary items, Other revenues and expenses. D). Other revenues and expenses, Discontinued operations, Extraordinary items 12. A measure of the percentage of each dollar of sales that results in net income is A). return on assets. B). earnings per share. C). profit margin. D). return on common stockholders' equity. 13. Which one of the following would be classified as an extraordinary item? A). Expropriation of property by a foreign government. B). Losses attributed to a labor strike. C). Write-down of inventories. D). Gains or losses from sales of equipment. 14. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $ 45,000 Accounts receivable (net) 25,000 Inventory 20,000 Property, plant and equipment 210,000 Total Assets $300,000 Liabilities and Stockholders’ Equity Current liabilities $ 50,000 Long-term liabilities 90,000 Stockholders’ equity—common 160,000 Total Liabilities and Stockholders’ Equity $300,000 Income Statement Sales $ 120,000 Cost of goods sold 66,000 Gross profit 54,000 Operating expenses 30,000 Net income $ 24,000 Number of shares of common stock 6,000 Market price of common stock $20 Dividends per share .50 What is the current ratio for Sampson? A). 0.64 B). 1.80:1 C). 1.30:1 D). 1.40:1 15. What type of ratios best measure the short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash? A). Liquidity B). Solvency C). Profitability D). Leverage