ACG 3173 Final Exam with all Correct & 100% Verified
Answers |Latest Version |Already Graded A+
ROA = ✔Correct Answer-NI / Average Total Assets
ROE = ✔Correct Answer-NI / Average SE
Working Capital = ✔Correct Answer-CA - CL
Current Ratio = ✔Correct Answer-CA / CL
Quick Ratio = ✔Correct Answer-(Cash + A/R) / CL
Cash Ratio = ✔Correct Answer-Cash / CL
Debt-to-Equity = ✔Correct Answer-Total Debt / Total Equity
Debt Ratio = ✔Correct Answer-Total Debt / Total Assets
Ending SE = ✔Correct Answer-Beg SE
+NI
-Dividends
Income Statement ✔Correct Answer-Sales
-COGS
=Gross Profit
-Operating Expenses
=OI or EBIT
+Other Rev & Gains
(Interest Income)
-Other Expenses & Losses
(Interest Expense)
=EBT or Taxable Income
-Tax Expense
=NI or EAT
Net Realizable Value of A/R = ✔Correct Answer-A/R
-Allowance for Bad Debt
End Bad Debt Allowance = ✔Correct Answer-Beg Bad Debt Allowance
+Bad Debt Expense
-Write Offs
, Write offs don't affect ratios.
Bad Debt Expense affects? ✔Correct Answer-NI, Assets, and since NI also equity.
Chapter 5 HW #6
ROI = ✔Correct Answer-Amount of Return / Amount Invested
FIFO vs Weighted Avg. vs LIFO ✔Correct Answer-FIFO has the lowest COGS and highest Ending
Inventory
LIFO is opposite
Weighted Avg. is in the middle
LIFO is better for ✔Correct Answer-Minimizing Taxes
Depreciation vs Amortization vs Depletion ✔Correct Answer-Depreciation = Tangible
Amortization = Intangible
Depletion = Natural Resources
Earnings Management ✔Correct Answer-Seeks to smooth out volatility. Less volatile = more
attractive. (When a company manipulates its earnings by accelerating revenues and deferring
expenses)
3 Rules of MACRS ✔Correct Answer-1. Has 0 salvage value.
2. IRS determines useful life.
3. Companies must use Half Year Convention
Reasons it would be a Capital Lease ✔Correct Answer-1. Ownership transferred to lessee at
end of lease.
2. Bargain purchase price
3. Lease term lasts longer than 75% of useful life.
4. PV of lease payments > 90% of assets at FMV.
Placed on BS
APR = ✔Correct Answer-I / Pt
EAR or APY = ✔Correct Answer-Use EFF% on calculator.
How do you determine a company's leverage? ✔Correct Answer-Difference between ROI &
ROE
Coupon Rate > Market Rate = ✔Correct Answer-Premium
Answers |Latest Version |Already Graded A+
ROA = ✔Correct Answer-NI / Average Total Assets
ROE = ✔Correct Answer-NI / Average SE
Working Capital = ✔Correct Answer-CA - CL
Current Ratio = ✔Correct Answer-CA / CL
Quick Ratio = ✔Correct Answer-(Cash + A/R) / CL
Cash Ratio = ✔Correct Answer-Cash / CL
Debt-to-Equity = ✔Correct Answer-Total Debt / Total Equity
Debt Ratio = ✔Correct Answer-Total Debt / Total Assets
Ending SE = ✔Correct Answer-Beg SE
+NI
-Dividends
Income Statement ✔Correct Answer-Sales
-COGS
=Gross Profit
-Operating Expenses
=OI or EBIT
+Other Rev & Gains
(Interest Income)
-Other Expenses & Losses
(Interest Expense)
=EBT or Taxable Income
-Tax Expense
=NI or EAT
Net Realizable Value of A/R = ✔Correct Answer-A/R
-Allowance for Bad Debt
End Bad Debt Allowance = ✔Correct Answer-Beg Bad Debt Allowance
+Bad Debt Expense
-Write Offs
, Write offs don't affect ratios.
Bad Debt Expense affects? ✔Correct Answer-NI, Assets, and since NI also equity.
Chapter 5 HW #6
ROI = ✔Correct Answer-Amount of Return / Amount Invested
FIFO vs Weighted Avg. vs LIFO ✔Correct Answer-FIFO has the lowest COGS and highest Ending
Inventory
LIFO is opposite
Weighted Avg. is in the middle
LIFO is better for ✔Correct Answer-Minimizing Taxes
Depreciation vs Amortization vs Depletion ✔Correct Answer-Depreciation = Tangible
Amortization = Intangible
Depletion = Natural Resources
Earnings Management ✔Correct Answer-Seeks to smooth out volatility. Less volatile = more
attractive. (When a company manipulates its earnings by accelerating revenues and deferring
expenses)
3 Rules of MACRS ✔Correct Answer-1. Has 0 salvage value.
2. IRS determines useful life.
3. Companies must use Half Year Convention
Reasons it would be a Capital Lease ✔Correct Answer-1. Ownership transferred to lessee at
end of lease.
2. Bargain purchase price
3. Lease term lasts longer than 75% of useful life.
4. PV of lease payments > 90% of assets at FMV.
Placed on BS
APR = ✔Correct Answer-I / Pt
EAR or APY = ✔Correct Answer-Use EFF% on calculator.
How do you determine a company's leverage? ✔Correct Answer-Difference between ROI &
ROE
Coupon Rate > Market Rate = ✔Correct Answer-Premium
