Finance questions
The December 31, 2009 balance sheet shows net fixed assets of $150,000 and the December 31, 2010 balance sheet
shows net fixed assets of $250,000. Depreciation expense for 2009 is $25,000 and depreciation expense for 2010 is
$35,000. Based on this information, the cost of fixed assets purchased during 2010 is
A)
$100,000.
B)
$110,000.
C)
$135,000.
D)
$160,000.
Given the following financial statements for ACME Corporation, what amount did the
company pay in dividends for 2010?
Income Statement Balance Sheet
Year Ended 12/31/10 12/31/2010 12/31/2009
Sales $1,300,000 Current Assets $50,000 $45,000
Cost of Goods Sold 750,000 Gross Fixed Assets 880,000 650,000
Less Accumulated
Operating Expenses 200,000 Depreciation 450,000 350,000
Depreciation
Expense 100,000 Fixed Assets 430,000 350,000
EBIT 250,000 Total Assets $480,000 $395,000
Interest Expense 50,000
EBT 200,000 Current Liabilities $35,000 $50,000
Taxes 80,000 Long-term Debt 330,000 270,000
Net Income $120,000 Common Stock 5,000 5,000
Retained Earnings 110,000 70,000
Total Liabilities &
Equity $480,000 $395,000
A)
$45,000
B)
$25,000
C)
$100,000
D)
$80,000
,Siskiyou Corp. has cash of $75,000; short-term notes payable of $100,000; accounts receivables of $275,000; accounts
payable of $135,000: inventories of $350,000; and accrued expenses of $75,000. What is the firm's net working
capital?
A)
$390,000
B)
$175,000
C)
$700,000
D)
$210,000
A company borrows $2,000,000 and uses the money to purchase high technology machinery for its operations. These
are examples of
A) cash flow from financing and cash flow from
operations.
B) cash flow from investing and cash flow from
operations
C) cash flow from financing and cash flow from
investing.
D) cash flow from investing and cash flow from
financing
Use the following information to calculate the change in the company's cash balance for
the year.
Credit Sales $800,000
Cash Sales $500,000
Operating Expenses on Credit $200,000
Cash Operating Expenses $700,000
Accounts Receivable (Beg. of
Year) $50,000
Accounts Receivable (End of
Year) $80,000
Accounts Payable (Beg. of Year) $50,000
Accounts Payable (End of Year) $100,000
Income Taxes Paid $160,000
, A)
$145,000
B)
$180,000
C)
$260,000
D)
$365,000
$260,000
Net Income = credit sales + cash sales - operating expenses on credit - cash operating
expenses - income taxes = 800,000 + 500,000 -200,000 -700,000 - 160,000 = 240,000
Increase in account receivable = ending AR - beginning AR = 30,000
Increase in account payable = ending AP - beginning AP = 50,000
Change in cash flow = Net income - increase in AR + increase in AP
A firm paid dividends of $10,000, paid interest of $20,000, reduced debt principal outstanding (paid off debt) in the
amount of $100,000, and sold new stock for $150,000. What was the firm's cash flow from financing activities?
A) +$20,000 ($20,000 flowed into the
firm)
B) -$20,000 ($20,000 flowed out of the
firm)
C) +$280,000 ($280,000 flowed into
the firm)
D) -$280,000 ($280,000 flowed out of
the firm)
Which of the following best describes cash flow from financing activities?
A) Interest income, plus dividend income, minus taxes
B) Interest expense, minus dividends paid
C) Interest paid, plus dividends paid, plus increase (or minus decrease) in stock, plus increase (or minus
decrease) in debt
D) Increase (or minus decrease) in stock, plus increase (or minus decrease) in debt, minus interest paid,
minus dividends paid.
All of the following measure liquidity EXCEPT
A) current ratio.
B) inventory turnover
C) acid-test ratio.
D) operating return on
assets.
Williams Inc. has a current ratio equal to 3, a quick ratio equal to 1.8, and total current assets of $6 million. Williams'
inventory balance is
A)
$2,000,000.
B)
$2,400,000.
C)
$4,000,000.
D)
$4,800,000.
The December 31, 2009 balance sheet shows net fixed assets of $150,000 and the December 31, 2010 balance sheet
shows net fixed assets of $250,000. Depreciation expense for 2009 is $25,000 and depreciation expense for 2010 is
$35,000. Based on this information, the cost of fixed assets purchased during 2010 is
A)
$100,000.
B)
$110,000.
C)
$135,000.
D)
$160,000.
Given the following financial statements for ACME Corporation, what amount did the
company pay in dividends for 2010?
Income Statement Balance Sheet
Year Ended 12/31/10 12/31/2010 12/31/2009
Sales $1,300,000 Current Assets $50,000 $45,000
Cost of Goods Sold 750,000 Gross Fixed Assets 880,000 650,000
Less Accumulated
Operating Expenses 200,000 Depreciation 450,000 350,000
Depreciation
Expense 100,000 Fixed Assets 430,000 350,000
EBIT 250,000 Total Assets $480,000 $395,000
Interest Expense 50,000
EBT 200,000 Current Liabilities $35,000 $50,000
Taxes 80,000 Long-term Debt 330,000 270,000
Net Income $120,000 Common Stock 5,000 5,000
Retained Earnings 110,000 70,000
Total Liabilities &
Equity $480,000 $395,000
A)
$45,000
B)
$25,000
C)
$100,000
D)
$80,000
,Siskiyou Corp. has cash of $75,000; short-term notes payable of $100,000; accounts receivables of $275,000; accounts
payable of $135,000: inventories of $350,000; and accrued expenses of $75,000. What is the firm's net working
capital?
A)
$390,000
B)
$175,000
C)
$700,000
D)
$210,000
A company borrows $2,000,000 and uses the money to purchase high technology machinery for its operations. These
are examples of
A) cash flow from financing and cash flow from
operations.
B) cash flow from investing and cash flow from
operations
C) cash flow from financing and cash flow from
investing.
D) cash flow from investing and cash flow from
financing
Use the following information to calculate the change in the company's cash balance for
the year.
Credit Sales $800,000
Cash Sales $500,000
Operating Expenses on Credit $200,000
Cash Operating Expenses $700,000
Accounts Receivable (Beg. of
Year) $50,000
Accounts Receivable (End of
Year) $80,000
Accounts Payable (Beg. of Year) $50,000
Accounts Payable (End of Year) $100,000
Income Taxes Paid $160,000
, A)
$145,000
B)
$180,000
C)
$260,000
D)
$365,000
$260,000
Net Income = credit sales + cash sales - operating expenses on credit - cash operating
expenses - income taxes = 800,000 + 500,000 -200,000 -700,000 - 160,000 = 240,000
Increase in account receivable = ending AR - beginning AR = 30,000
Increase in account payable = ending AP - beginning AP = 50,000
Change in cash flow = Net income - increase in AR + increase in AP
A firm paid dividends of $10,000, paid interest of $20,000, reduced debt principal outstanding (paid off debt) in the
amount of $100,000, and sold new stock for $150,000. What was the firm's cash flow from financing activities?
A) +$20,000 ($20,000 flowed into the
firm)
B) -$20,000 ($20,000 flowed out of the
firm)
C) +$280,000 ($280,000 flowed into
the firm)
D) -$280,000 ($280,000 flowed out of
the firm)
Which of the following best describes cash flow from financing activities?
A) Interest income, plus dividend income, minus taxes
B) Interest expense, minus dividends paid
C) Interest paid, plus dividends paid, plus increase (or minus decrease) in stock, plus increase (or minus
decrease) in debt
D) Increase (or minus decrease) in stock, plus increase (or minus decrease) in debt, minus interest paid,
minus dividends paid.
All of the following measure liquidity EXCEPT
A) current ratio.
B) inventory turnover
C) acid-test ratio.
D) operating return on
assets.
Williams Inc. has a current ratio equal to 3, a quick ratio equal to 1.8, and total current assets of $6 million. Williams'
inventory balance is
A)
$2,000,000.
B)
$2,400,000.
C)
$4,000,000.
D)
$4,800,000.
